What Happened in the US Online Gambling Industry in 2019?

By Gary Mills in Laws and Regulation
| February 14, 2020 5:55 am PST

The US online gambling industry launched like a rocket the last decade.

This is in part thanks to the few US states that passed legislation to regulate online poker and casino games. Online gambling would not be this far along if it weren’t for Nevada, Delaware, and New Jersey paving the way.

Then, the Supreme Court of the United States (SCOTUS) repealed PASPA, allowing each state to legalize sports betting. This was like adding even more boosters to the online gambling rocket ship.

Since then, most states have at least discussed regulating sports betting. We saw the results of this in 2019. More than 20% of US states passed or introduced (online) gambling legislation.

There have been even more developments already in 2020, but let’s look back at what happened in 2019. In the next section, I’ll show you the 11 states that legalized online gambling in the past year. And you’ll see which of those 11 states managed to launch their first gambling site, too.

Was your state one of them?

Which States Legalized or Launched Online Gambling in 2019?

More than ten states passed online gambling legislation in 2019. A couple of states beat the buzzer with only days to spare, and even a few states managed to pass legislation and launch their gambling sites.

Let’s look at those states now.

Michigan

Michigan governor Gretchen Whitmer signed bills 4311, 4916, and 4308 on December 20th, beating the buzzer by 11 days. These bills legalize online sports betting, casinos, poker, and fantasy sports.

The three bills are allowing three commercial and 23 tribal casinos to apply for a license. Each operator can have one platform for each vertical they want to launch. At the time of writing, there’s no exact date for Michigan to launch their first gambling site.

Operators must wait for the Michigan Gaming Control Board to establish the rules and regulations first, and multiple sources say this could take up to a year. Local bookies will be able to take sports bets this year, but gamblers looking to use state-regulated online betting sites may have to wait until 2021.

Indiana

Indiana struggled to pass their online gambling legislation this past year.

The biggest hurdle was the integrity fee in bill H 1325. This is a 1% fee on every bet that operators must pay every quarter.

The fee is a hurdle for operators because it cuts into their margins. This makes it harder to run a profitable business once they pay customers and taxes.

The House finally came to terms and passed bill S 552 in April. The governor signed the bill in May 2019 and the state’s first gambling site launched in September.

Indiana has had a stellar 4th quarter too. They earned $147.3 million from bets in October, and $96.2 million of that came from mobile bets. The state received $11.5 million in revenue that month.

Their revenue comes from three operators: BetRivers, DraftKings, and FanDuel. Judging from the numbers above, I think it’s safe to assume that Indiana will have a crazy-profitable 2020.

Oregon

Oregon became the eighth state to offer online betting when the Oregon Lottery launched their app, Scoreboard, in October.

This was easy for Oregon to do because they already had betting laws on the books. So, they were in a great position to capitalize on the SCOTUS’ decision to repeal PASPA.

Scoreboard did great its first month too, taking in $5.6 million in bets in its first two weeks.

The Scoreboard app is phase one of the Oregon Lottery’s three-phase gambling plan. They plan to kick of the second phase in early 2020 which will include adding self-serving kiosks to retailers throughout the state.

Iowa

Governor Kim Reynolds legalized sports betting in Iowa when she signed bill SF617 on May 13th. This bill allows residents and visitors to bet on sports and fantasy sports.

Operators were able to launch as soon as July 4th, though no one was ready by then. The first eight casinos and sportsbooks didn’t launch until August 15th.

What’s interesting …and inconvenient about gambling online in Iowa is that you must register for a mobile betting account in person. This rule is in effect until January 2021.

Tennessee

Tennessee legalized online sports betting in April. Operators could accept bets as early as July 1st, but no one was ready to by then. The state also missed the 2020 Super Bowl, which is the biggest sports betting event in the US.

What’s interesting about sports betting in Tennessee is that the state won’t have a physical sportsbook. You’ll make all your bets online using your computer or smartphone.

Another interesting fact is that the law states that the operator’s aggregated annual payout cannot exceed 85%. Experts believe this pricing isn’t competitive enough, and that it might push bettors to continue to use offshore betting sites.

We’ll have to see what happens when the first site aims to launch sometime in 2020. I suspect DraftKings or FanDuel will launch their betting sites first, but it looks like state legislators are currently at a standstill. Apart from the lottery commission, Tennessee does not have a gambling board to help move things along.

Illinois

Illinois passed SB 690 in June of 2019. This law allows the state to expand gaming in several ways. That includes building new casinos, increasing the number of video machines, and turning existing racetracks into racinos.

SB 690 also legalized in-person and mobile sports betting.

The state planned to have regulated betting ready for the 2019-2020 NFL season, but it wasn’t. Thankfully, this year, the state is inches away from having sportsbooks ready by the time March Madness rolls around.

As for online betting options in Illinois, these in-person sports betting locations will have the ability to offer online wagers as well.

Colorado

Colorado legalized sports betting in November. There are more than 30 casinos in the state, and at least 12 of them will have sportsbooks.

That includes sites like FanDuel and PointsBet, where you can bet using your computer or smartphone. That is, when these sites go live.

There’s no confirmed launch date yet, but the state estimates that online sports betting will go live in Colorado on May 1st, 2020.

You won’t be able to bet on high school or college sports. Esports isn’t an option either. But if you’re within state lines, you will be able to bet on professional sports.

New Hampshire

New Hampshire lawmakers passed online sports betting legislation in July. The law allows bettors to place their wagers in person or online using the DraftKings app exclusively.

The state auctioned off the right to operate in the state to just one operator, and DraftKings won.

They started taking bets in time for the NFL playoffs and the 2020 Super Bowl. As the biggest betting event in the US, Super Bowl Sunday brought in $2.31 million for the state this past February 2nd.

Other than the Super Bowl, NH residents over 18 years old can also bet on professional and collegiate sports. The one exception to collegiate sports is the in-state college games. Everything else is fair game.

Montana

Governor Steve Bullock signed bill H 725 on May 3rd. This legalizes (online) sports betting in Montana.

What’s interesting about Montana is how long they took to pass their sports betting laws. They were one of the few states protected from PASPA (along with Oregon, Nevada, and Delaware).

But maybe they weren’t in a rush to pass their laws. Or maybe they wanted to see how well other states did with online gambling before they joined the bandwagon. Who knows.

When they do launch, you will be able to place bets from your mobile phone, but only when you’re on the casino’s property.

We’ll see how this works for them when Montana launches their kiosks. There’s no firm launch date yet, but they’re expected to begin operating in the spring of this year.

Rhode Island

Rhode Island passed their sports betting legislation in 2018 then went live by the end of the year. But their bill didn’t include online and mobile betting.

Lawmakers decided to expand the law to include online and mobile betting in early 2019. They launched their mobile apps (from IGT and William Hill) in September, in time for the start of the NFL season.

Unfortunately, the state didn’t see the traction they were hoping for. Their law states that you need to open your account in person at one of the two casinos in the state.

This creates a lot of friction. So much friction that of the 12,000 users who downloaded the apps, only 45% of them completed their registration.

This might explain the state’s lackluster gambling revenue from both 2018 and 2019. Hopefully, they find a solution in 2020.

Pennsylvania

Pennsylvania passed their sports betting law in 2017. They were ready to strike hard and fast when the SCOTUS repealed PASPA.

And strike they did.

Pennsylvania launched their first retail sportsbook in late 2018. The mobile side took longer, though, as the Pennsylvania Gaming Control Board wanted to test the website and app before signing off on it.

They did, and now residents and in-state visitors can look forward to downloading apps from the following operators.

  • SugarHouse
  • FanDuel
  • Rivers
  • Parx
  • Fox
  • DraftKings
  • Unibet

You can download any of these apps to start betting in PA now. In fact, they’ve already generated a significant amount of money for the state, with FanDuel being the top operator.

In December of 2019 alone, FanDuel took in over $154 million worth of online bets. But DraftKings isn’t too far behind. Pennsylvania also legalized online poker and casino games, too. The state’s poker room launched at the end of 2019.

And that’s the last state in our list to pass legislation and/or launch regulated online gambling in 2019. Other states passed legislation too, such as North Carolina, but their laws don’t include online betting.

This is a disadvantage to them, since states like New Jersey have shown how profitable mobile sports betting is. NJ punters use their computers and smartphones to make 80% or more of their wagers.

I anticipate that many of these sites will soon see the error of their ways and, like Rhode Island, will change their laws to accommodate online and mobile gamblers.

After all, they didn’t decide to regulate online gambling to lose money.

US States on the Path to Legalizing Online Gambling

Not every state who tried to pass online gambling legislation in 2019 succeeded. There were several states who tried but failed for one reason or another.

That’s okay. Sometimes, we need take a step back before we can take two more steps forward.

Plus, even though the following states failed to get traction in 2019, we now know they want to regulate online gambling. There’s still plenty to get excited about.

The following are the states you should keep your eyes peeled for in 2020.

California

This past January, Native American tribes expressed interest in passing sports betting legislation, but only if they retain control over what happens.

The state gave approval to 18 tribes to begin petitioning for a statewide initiative. The initiative aims to get sports betting on the November 2020 ballot.

If passed, California sports betting is projected to earn over $2 billion in revenue.

Maine

Lawmakers tried to pass bill LD 553, which would legalize sports betting, in time for the start of the 2019-2020 NFL season.

The bill passed the House in June, but Governor Janet Mills vetoed the bill. Just this month, local Senators fired off and voted to override her veto, but the House of Representatives were able to sustain Mill’s decision.

With significant proponents on both sides, it’s clear that the issue of legalized sports betting will reemerge as the year goes on.

Louisiana

The Louisiana Senate approved SB 153 but failed to pass the House before it expired on the last day of their session.

Had it passed, they would’ve created a ballot asking voters to approve or disapprove a limited sports betting law that would have restricted betting to casinos and racetracks.

It didn’t get traction, so we’ll have to wait until March 2020 to see if Louisiana lawmakers decide to try again.

And those are the three noteworthy states that tried to pass (online) gambling legislation in 2019 but failed to gain enough traction. Several other states made small attempts at gambling legislation, too.

Hawaii and Arizona also introduced bills, though nothing has come of them. For South Dakota, sports betting is taking a step toward legalization and will show up on the November 2020 ballot.

Missouri tried to make progress this year with two different bills, both of which died early in 2019. They have two new bills on the table, but lawmakers need to iron out the details before they get traction.

And Kentucky will have to try again after their 2019 attempts at bills failed to make it out of the committee. Kentucky lawmakers are positive 2020 is their year.

The bottom line — there’s more gambling regulation still to come. Keep your eyes peeled for online gambling bills from these states in 2020.

How Regulated Online Gambling States Performed in 2019

So far, the focus has been on states that passed online gambling legislation or attempted to this year. But I don’t want to forget the states that have already passed gambling laws.

Many of them had incredible, profitable years. The following is a short update for each of the four states that offered online gambling prior to 2019.

West Virginia

West Virginia started offering online gambling in fall 2018. That season, the state did $7.1 million in total sports betting revenue. A little more than $100,000 of that came from mobile sports betting.

Fast forward to the end of 2019, and West Virginia recorded $4.86 million in online (mobile) revenue and $12.84 million in retail revenue.

West Virginia hasn’t slowed down yet. Their numbers are still increasing month over month, so I expect they will continue to hit record numbers in 2020.

Delaware

Delaware has had their share of ups and downs in 2019. For example, they generated only $240,092 in October which was their lowest take of the year. This is nuts, considering they earned $384,830 the previous month.

Experts think that Delaware’s gambling revenue may continue to decline. They suspect it’s due to gamblers who used to go to Delaware Park to play but are now traveling to Pennsylvania, Maryland, or New Jersey instead for better game selection and betting odds.

Delaware still doesn’t have a mobile app, which could also explain why their revenue is declining.

Nevada

Nevada online gambling revenue is not separated from their retail gambling revenue, so it’s hard to tell how well they’re doing.

Overall, though, it sounds like they had a record-breaking 2019.

The state’s sportsbooks took in $31 million in winnings off a record $614.1 in handle. This is a massive year-over-year increase. For contrast, they collected $27.1 million from a then-record $581.1 million in handle.

New Jersey

The Garden State had a great year. New Jersey broke records in November. Their casinos generated $47.6 million. Poker brought in almost $1.5 million.

Their total take for the month was $49,137,906, a 12% month-over-month increase where they flirted with another record too, hitting $50 million in monthly revenue.

What’s even more impressive is the 82.3% increase over the same month in 2018. New Jersey has seen some significant growth in the past, but nothing like the growth they experienced in 2019.

Here’s hoping that growth continues across the board for all regulated states in 2020.

10 Major Gambling Partnerships and Acquisitions From 2019

In other news, several partnerships and mergers happened in 2019. The following 10 are the biggest to come across my news feed this year.

Philadelphia 76ers Partners With FOX Bet and Parx

FOX Bet (a gaming partnership between FOX Sports and The Stars Group) announced their partnership with the Philadelphia 76ers right before Thanksgiving.

The deal includes Fox Bet branding everywhere you can find the 76ers, like social media, courtside signage, and home game promotions.

That’s not the only deal the 76ers made in 2019 either. They also formed a partnership with Parx Casino.

This deal includes mutual advertising. For example, Parx will offer a free play “Win for All” promotion for whenever the 76ers win a regular season game. And the 76ers will have Parx-branded signage throughout their arena.

Philadelphia Eagles Forms a Partnership With UniBet and Harrah’s

The 76ers isn’t the only Philadelphia sports team getting in on the action. The NFL team, the Philadelphia Eagles, is too.

The first deal they made is a multiyear partnership with Unibet. The deal includes mutual advertising, such as Unibet’s logo on the Lincoln Financial Field digital billboard. And Unibet will promote the Eagles in their digital and print outlets.

The other partnership the Eagles formed this year is with Harrah’s Philadelphia. This deal includes co-branded merchandise, Harrah’s branding at Lincoln Financial Field, and Eagles-branded gaming tables and rewards cards at the casino.

The casino will also host “Eagles Legends” events, which will give casino goers and fans a chance to meet former Eagles players.

Roar Digital LLC Partners With MLS and Yahoo Sports

Roar Digital LLC (a partnership between MGM and GVC Holdings PLC) formed a couple of partnerships this year. They made their first deal with Major League Soccer (MLS) in March 2019.

This agreement includes visibility for the sportsbook.  For example, MLS will post signage at more than 100 broadcast MLS matches.

Roar Digital LLC will also get access to the MLS’ data which they will make available to fans and sports bettors. This information will help you make more educated soccer bets in 2020 and beyond.

The other deal Roar Digital made was with Yahoo Sports. They announced their partnership in October 2019. Their deal includes the Yahoo Sports app integrating with the BetMGM platform.

The two companies also plan to collaborate in other ways too, such as creating content, hosting live events, mutual marketing, and content distribution at MGM Resorts properties.

Red Sox and MGM Resorts International Form a Partnership

The MGM formed a partnership outside of the Roar Digital brand. Their partnership is with the Major League Baseball team, the Boston Red Sox. This deal replaces the previous deal the Red Sox had with Foxwoods Casino.

The baseball team will have MGM signage throughout the park. One that you won’t miss is the MGM lion logo on Fenway Park’s Green Monster. They’ll also have MGM signage behind home plate and on other media outlets the Red Sox control.

San Francisco 49ers Partners With Cache Creek Casino Resort

The 49ers signed a multiyear partnership with the Cache Creek Casino Resort in Brooks, California.

The agreement includes co-branded media campaigns you’ll see on TV, online, and on signage at Levi’s Stadium.

Cache Creek will also sponsor the Faithful Appreciation game where casino VIP guests will receive perks such as 49ers alumni appearances.

Pechanga Resort Casino Partners With SoFi Stadium and Hollywood Park

The Pechanga Resort Casino formed a partnership with the SoFi Stadium and Hollywood Park. The $5 billion stadium is the home of the LA Rams and San Diego Chargers.

This deal includes the Pechanga Founders Club, which will be a 14,000 square-foot premium club space on field level. Pechanga will also have rights to branding throughout the stadium including a 11,500 square foot activation zone where Pechanga employees can interact with customers.

Paddy Power Merges With PokerStars

Flutter Entertainment, which owns the Irish gambling site, Paddy Power, bought The Stars Group. The Stars Group owns PokerStars, the world’s largest online poker site.

They came to an agreement in October 2019 to merge which would make them the world’s largest betting and gaming company. They’re worth $12 billion combined.

Between PokerStars, Paddy Power, and Paddy Power-owned FanDuel, the company will have more than 13 million customers in more than 100 markets.

This is easily the biggest acquisition/merger that took place in online gambling during 2019. What a way to cap off my recap of everything that happened in our industry this year, right?

Conclusion

2019 was an eventful year for the online gambling industry.

We saw several states pass legislation regulating online gambling. Many others introduced legislation this year, putting them on the path to pass their gambling laws in 2020-2021. And most of the existing regulated states had record-breaking years.

The industry also witnessed several partnerships, acquisitions, and mergers take place between publicly traded companies and sports teams.

You know what this tells me? It tells me that the United States is finally embracing online gambling, which is surprising considering how many people demonized it (and continue to do so).

Now, the country is on a path to safe, fair, regulated online gambling. It’s only a matter of time before most, if not all, of the country is on board.

I predict we’ll see even more progress in 2020. What about you? What do you think will happen in the US online gambling industry in 2020? Leave your predictions in the comments below.

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