More details on Indiana sports betting bills
News on 25 Jan 2018
News on 25 Jan 2018
The Indiana Legislature bills filed recently in anticipation of a positive Supreme Court judgement against the Professional and Amateur Sports Protection Act (see previous reports) are clearer following more detail on the content this week.
Indiana is one of at least ten US states that have been preparing legislation enabling early regulatory involvement in what is expected to be a wider and very significant sports betting market should PASPA be overturned, with three states – Connecticut, Mississippi, and Pennsylvania – successfully approving bills so far, albeit contingent on a favourable Supreme Court decision.
The relevant bills in Indiana are H.1325 introduced to the state House by Rep. Alan Morrison, and S.405 in the Senate, authored by Senator John Ford. Interestingly, neither proposal bans betting on college sports, which has the potential to bring them into conflict with the NCAA.
Another interesting twist already reported is in the House proposal, which suggests a quarterly “integrity fee” of 1 percent of wagers made on sports events to go to the governing bodies of the sports (read MLB and the NBA, who are reportedly behind this recommendation).
This fee will be levied on operators, who also would face initial licensing and annual administrative fees and an existing federal excise tax of 0.25 percent on sports betting handle.
The American Gaming Association has opposed the idea, pointing out that “….handing sports leagues 20 percent of what’s left over after winnings are paid out, undercuts its economic viability. Doing so will ensure the illegal market continues to thrive in the state, and gut the tax revenues available to fund essential public services. We believe Indiana taxpayers deserve better.
“We encourage Indiana to reject this short-sighted, misinformed idea, which simply replaces a failed federal prohibition with bad state policy. Our goal is to eliminate the illegal market, protect consumers and strengthen the integrity of the game. We invite all stakeholders to join us in working together in a thoughtful and transparent fashion.”
The integrity fee provision is not included in the state Senate bill, and interestingly has been at the centre of discussions at a New York Senate sports informational hearing recently (see previous report).
More positive content in the Morrison bill includes provision for online and mobile wagering.
There are differences between the two bills on fees, too.
Morrison’s H1325 proposes an initial application fee of $75,000, with a $10,000 online wagering fee and a $5,000 annual licence renewal fee.
Ford’s Senate bill suggests an initial fee of one percent of the operator’s adjusted GGR from gambling activity in the most recently concluded state fiscal year or $500,000 for operators wishing to offer sports betting, whichever amount is larger. There is also a $75,000 application fee, and if operators want to go online a $10,000 licence fee with a $5,000 annual renewal charge.
Where the NFL stands on the bills is not yet clear; it has been one of the main critics and litigants against New Jersey’s attempt to upend the PASPA which has led to the Supreme Court case, and it seems unlikely that it will change its posture.
That said, a favourable Supreme Court decision is likely to trigger an explosion of regulated, licensed and taxed sports betting activity in a number of states, which may lead to change.
