Which States are Likely to Legalize Sports Betting in 2023?

By Shmuel Segal, Co-Founder and CEO of MediaTroopers

It was a momentous 2022 for the sports betting industry, with New York, Louisiana, Kansas, and Maryland joining 29 other US jurisdictions in launching legal and safe sports betting. New York’s launch was hotly anticipated, and the Empire State quickly became the largest betting market in the country, posting a betting handle of well over $1 billion per month for most of the year. Its 51% tax rate for sports betting operators has seen nearly $600 million of revenue flow into the New York State Treasury. 

In addition to Ohio going live in January 2023, three more states, Maine, Massachusetts, and Nebraska, have already passed sports betting legislation and are expected to launch in 2023. Maine legalized sportsbooks in May 2022, with the state’s Gambling Control Unit Executive Director expecting a launch in mid-to-late 2023. The Massachusetts General Court needed a conference committee to pass a sports betting law. Still, thanks to a last-minute deal, in-person betting is expected to begin at the end of January, with a digital launch in March. It is still unclear exactly when Nebraska will go live with its retail-only sports betting market. Still, estimates from the Nebraska Gaming Commission suggest a launch is possible in late 2023. 

Going into 2023, only 16 states continue to prohibit sports betting, and 12 of those considered bills or ballot initiatives to regulate sportsbooks in the last year. Some states, California most notably, will be unable to consider sports betting in 2023 due to the need for a constitutional amendment. Following the defeat of the two sports betting propositions in November 2022, the next opportunity for a ballot initiative will be in 2024. 

Additionally, a ballot initiative in Florida, backed by DraftKings and FanDuel, also failed to gather enough support in 2022. With the court case on the new gaming compact between the Seminole Tribe and the State of Florida still ongoing, it is unclear when sports betting will become available in the Sunshine State. Kentucky is also unlikely to consider sports betting in 2023 due to the defeat of its most prominent advocate, Representative Adam Koenig, in the primaries.

However, I believe several states could pass sports betting legislation in 2023. Jurisdictions like Minnesota, Missouri, Vermont, Georgia, and even long-time holdout Texas are primed for a renewed push for sports betting bills from lawmakers. 

In my opinion, the state with the best chance of passing legislation is Minnesota. In 2022, a Minnesota sports betting bill passed the House, but the majority of lawmakers in the upper house voted against the bill. During last year’s election, the Democratic-Farmer-Labor Party took control of the Senate and is much more open to sports betting. Not only will Representative Zack Stephenson propose a new bill regarding legalization, he said, ”I do think we have a great chance to get it across the finish line this year,” when speaking to KMSP late last year.

With the support of the tribal casinos, lawmakers, and broader stakeholders, the odds are in our favor. 

In Missouri, pressure has been building for lawmakers to pass sports betting legislation. An attempt last year was filibustered after Senator Denny Hoskins added laws to allow VGTs to provide sports betting. Support for legal sports betting has come from the state’s sports teams, consumer groups, and lawmakers. Sen. Hoskins said in April 2022 that the “legislative landscape could change to open a pathway to legalization.” Several bills have been submitted for the new legislative session, and with many jurisdictions surrounding Missouri having already launched sports betting, the tide may turn in 2023.

Vermont also looks set to legalize sports betting in 2023. A committee of legislators and state officials released a report in late 2022 unanimously recommending VT launch sports betting with a state-controlled market overseen by the state Department of Liquor & Lottery. For me, Vermont legalization seems a done deal. Governor Phil Scott is a supporter, and while lawmakers have taken some time to come on board, there is strong momentum behind any legislation.

While these three states seem the most likely to legalize sports betting, lawmakers in Georgia and Texas are readying themselves for another debate on sports betting–with Texas being the most interesting potential sports betting case this year.

Home to 11 professional sports teams, the Lone Star State considered five sports betting bills in 2021, the last legislative session. Home to nearly 30 million people, not to mention Mattress Mack, Texas would be a large market for sportsbooks if legalization happens. Sports teams also support legalization, with Dallas Mavericks owner Mark Cuban stating he wants a new “Vegas-like” Resort & Casino to form part of a new arena. Several major league teams have signed partnerships with sportsbooks to increase the pressure, as have tribes. The Chickasaw Nation in Oklahoma has donated over $15 million to politicians to support gambling lobbying.

Overall, I think 2023 will see progress in at least two states with regards to sports betting. However, it is possible up to five states could pass legislation. 

What about online casinos?

While we welcome any new states to legalize sports betting – the real growth of the industry remains with online casinos. In 2022, online casinos and poker operators earned a total of $5.32 billion in pre-tax revenue across the US. This amount is 38% higher than the amount of revenue earned in 2021, and is expected to continue to increase in 2023.

Looking at the success of the states where online casinos are currently legal–Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia–the revenue generated by online casinos is up to 4x that of sports betting.  At present, the only state with the potential of legalizing online casinos is New York, given its success rate since regulating sports betting in January of 2022. However, lawmakers in Indiana have also conducted a feasibility study on online casinos, with all indicators suggesting it\’s a move in the right direction.

The numbers speak for themselves and if the trend continues I think it will encourage more states to go live with online casinos.

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