3 Years on From the End of PAPSA – How Does Sports Betting Look in the US?

Posted by Harry Kane on Wednesday, June 9, 2021

May 14th, 2018 will forever be etched in the memory of sports betting fans in the US, as this was the date that the nation’s Supreme Court overturned the controversial Professional and Amateur Sports Protection Act (PAPSA) from 1992.

This legislation had historically prohibited sports betting at federal level, so the decision to strike it from the statute books essentially enabled state and local authorities to legalise sports betting and monetise this as a source of tax revenue.

We’ll look at what has happened over the course of the last three years following this landmark ruling, while asking what the future could hold for the burgeoning US marketplace.

A Look Back at PAPSA and the Impact of the Supreme Court Ruling

When the PAPSA legislation was officially bought in back in 1992, sports betting became prohibited in every single jurisdiction apart from Nevada.

This effectively handed the state and ‘Sin City’ a de facto monopoly on broader sports gambling, although three other states were subsequently allowed to maintain small iterations of sports betting that had been in place prior to the ruling.

This stringent ruling-maintained a vice like grip on sports betting in the UK, so the decision of the Supreme Court to loosen this stranglehold obviously had a seismic impact on the US iGaming marketplace. It also triggered a relative rush to market, as states pushed to legalise sports wagering and create lucrative revenue streams in the form of taxation.

By the end of 2018 and just seven months after the Supreme Court ruling, a total of eight states had legalised sports wagering. This number included Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania and New York’s Rhode Island, who joined Nevada in offering sports betting through both corporeal and mobile locations within their state boundaries.

Since then, a further 14 states have fully legalised sports betting for punters, including prized and lucrative markets in New York and Michigan.

The first legal sports bet in the Big Apple was placed on July 16th, 2019 at the Rivers Casino in Schenectady, while New York also remains at the forefront of driving mobile sports betting and developing the underlying technology to support this.

A further five US states have detailed legislation in place and are poised to implement a sports betting bill, including the capital city of Washington and Maryland. In the case of the latter, there’s also a pending referendum for both in-person and mobile betting throughout the state, while the Maryland voters are also set to unveil a comprehensive regulatory framework to help safeguard players and operators alike.

Overall, this means that up to 27 states could have fully legalised and regulated sports betting by the end of 2021, while Oklahoma, Maine and Nebraska also moving towards introducing legislation at some point in the coming months.

This is more than half of the total number of state authorities in the US, and there’s no doubt that governors are developing unique sports betting bills for the primary purpose of raising public funds through subsequent transaction.

In the case of Maryland and similar states, there’s an overriding desire to raise revenue specifically for the funding of statewide education, which has become a major issue for authorities and governors throughout North America.

A Wider Look at Sports Betting in the US and the Future for This Vertical

Interestingly, there has been no uniform approach to legalising sports betting in the US, with some restricted to wagering at tribal venues and others pushing ahead with mobile and online sports betting across an array of markets.

In this respect, the decision to strike down the PAPSA legislation hasn’t fully realised the full potential of sports betting in every single state, with additional technological and cultural restrictions that have been in place for years having continued to weigh heavily on the process of legalisation.

However, the approach of New Jersey has blazed a trail for others to follow in some respects, just as it did when aggressively pursuing the legalisation of online casino gameplay. More specifically, it has adopted a largely free-market approach tied to the state’s existing casinos and racetracks, which has helped to optimise revenues and drive growth within a stringent regulatory framework.

This has helped NJ to deliver exceptional results, particularly through 2020. More specifically, last year was a record-breaking one for sports betting in New Jersey, with the state accepting a staggering $6 billion in sports bets according to figures from PlayNJ. This number alone is larger than the £5.7 billion generated by the iGaming market as a whole in the UK in the year-ending March 2020, while it was also delivered during a challenging year for sports betting across the globe.

This also included a little over $1 billion-worth of wagers in December alone, highlighting the immense potential of the sports betting market in the US and North America’s possible future as the world’s leader within the space.

To put this into further context, the percentage of the US population that retains access to mobile sports betting is estimated at just 27%. So, there’s clearly tremendous scope for growth in the US, with the most recent regulatory efforts still only enough to reach less than a third of the total population.

The Last Word – Could This Benefit UK Operators?

Clearly, the continued legalisation of sports betting in the US is creating a vast and burgeoning marketplace, and one that’s being constructed piece-by-piece over a relatively short period of time.

Interestingly, this is also creating significant opportunities for operators in more developed and mature markets across the globe, with the UK offering a relevant case in point.

We’ve already seen established brands such as William Hill and Paddy Power make significant moves into the US marketplace, for example, through focused partnerships and the delivery of advanced technology and responsible gambling tools. These are helping to deliver a secure and immersive iGaming experience stateside, while also fortifying offline sports betting operations nationwide.

Such partnerships are mutually beneficial, as they allow the US market to mature at a quicker rate while helping UK brands to forge new and increasingly lucrative revenue streams.