Hope Is A Waking Dream
Hope Is A Waking Dream
There was a lot of optimism around Texas casinos and California sports betting at G2E, but is that hope misplaced?
The Bulletin Board
NEWS: Gaming lobbyists are optimistic about Texas’s chances to legalize casino gambling (and, by extension, sports betting).
LEGAL and REGULATORY UPDATES: Online poker update: PA to Join MSIGA; RI Officials Blame Neighbors for Lottery Rev Decline.
VIEWS: The UK considers doubling the tax rate on online gambling operators.
VIEWS: California sports betting is possible in 2026, but 2028 is more likely.
AROUND the WATERCOOLER: Don’t mess with poker history.
STRAY THOUGHTS: Aristotle’s thoughts on hope.
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Go Home TX (Lobbyists) You’re Drunk
I’ve been to plenty of conference panel discussions that were overly optimistic, but few compare to the session at G2E on Texas casino/gambling legalization efforts. Or I should say, the reporting on the discussion, as everyone seems to be grabbing hold of the talking points made by people selling hopes and dreams.
David Rittvo, principal at Tailored Hospitality Advisors, moderated the panel that featured:
Andy Abboud, SVP Government Affairs Las Vegas Sands
Rick Limardo, SVP Government Affairs MGM Resorts
Caesar Fernandez, Senior Director, Head of State Government Relations FanDuel
Abboud was widely quoted as saying Texas casinos were “inevitable.” But caveated that by saying inevitable didn’t mean 2025 before once again pumping up the crowd by saying legalization in 2025 is “greater than 50%.”
That is slightly out of tune with comments from Mavericks’ owner and LVS President and CFO Patrick Dumont, who called Texas casinos a long-term commitment in July. “We’re patient. We think long-term. We’re not people who think in the short term,” Dumont said.
Resort casinos are the real prize, but the Texas House of Representatives passed a sports betting bill in 2023. The main hurdle (for both expansions) continues to be Lt. Gov. Dan Patrick and Senate opposition.
The G2E panel believes Patrick’s opposition isn’t intractable and that he will sign off on legislation if a majority of Senate Republicans are for gambling expansions.
However, there was also another caveat. “We have to show this is viable in the senate and get the votes there,” Limardo said. “We’ve been told directly we don’t have the votes.”
And those votes are going to be hard to come by. As I wrote in my July newsletter entry:
“Despite the progress it made in 2023, the House is putting the ball in the Senate’s court. According to State Rep. Jeff Leach, any gambling expansion efforts in 2025 will have to start in the Senate.
“[…]
“If that wasn’t bad enough, the Texas Republican Party released its new party platform that includes the following statement, “We oppose any expansion of gambling, including legalized casino gambling,” and calls on GOP politicians to refuse donations from gambling organizations.”
STTP Forecast: Texas 2025? Possible, but unlikely.
Legal and Regulatory Updates: PA to Join MSIGA; RI Officials Blame Neighbors for Lottery Rev Decline
Pennsylvania is finally ready to enter the MSIGA: Online poker is about to get a considerable boost as Pennsylvania has begun the process of joining the MSIGA. With Pennsylvania, some licensed US operators will draw from a player pool of 35-40 million. “We did receive correspondence from Governor Josh Shapiro directing us to begin the process of negotiating the Commonwealth’s entrance into the Multi-State Internet Gaming Agreement (MSIGA) for poker,” PGCB Director of Communications Doug Harbach told Play Pennsylvania. The news comes on the heels of BetRivers Poker’s soft launch.
Five Things We Know About BetRivers Poker from PokerFuse.com
STTP coverage of the changing (for the positive) online poker landscape
Rhode Island lottery revenue declines year-over-year: Citing increased competition from neighboring states, “A new report by the Rhode Island Office of the Auditor General shows that the Rhode Island Lottery transferred $426.4 million to the General Fund in the fiscal year ending June 30, 2024 — down $8.2 million or 1.8% compared to fiscal 2023,” the Rhode Island Current reports. Perhaps more worrying, land-based revenue is declining faster than online games, which may prevent Rhode Island lawmakers from passing further gaming expansions — presently, the state only allows online live dealer table games.
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UK Considers Following Illinois et al. Lead on iGaming Taxes
Editor’s note: This entry has been adjusted to reflect Derek Webb as a gambling-reform advocate and not anti-gambling.
The US isn’t the only jurisdiction considering heavier tax burdens on online gambling operators.
According to The Guardian, the Labour Party is considering doubling the current tax rate on sports betting and online casino operators (what UK think tanks call “higher harm” products) to raise an additional £3 billion annually in its first budget proposal in 14 years. The budget is expected at the end of the month.
“Sources familiar with the discussions said the Treasury had yet to make a decision but appeared receptive to tweaking the UK’s complex regime of betting and gaming duties to raise extra funds of between £900m and £3bn, despite opposition from industry lobbyists.”
As the team at Regulus Partners noted, the government is in a tough spot:
“Increases in most larger taxes that automatically fall ‘on working people’ have been ruled out, making any and all smaller taxes far more attractive to raise – but by default, small taxes must be raised significantly to generate revenues noticeable to Treasury spending (which is seeking to urgently fund a £22bn ‘black hole’ including c. £10bn of public sector pay increases agreed in July).”
Before I get too deep into this entry, let me be clear that I don’t foresee a doubling (or more) of the tax rate. It could happen (for the reasons outlined below), but a more likely outcome is a smaller bump. Still, nothing would surprise me anymore.
As the team at Regulus Partners noted, the government is in a tough spot:
“Increases in most larger taxes that automatically fall ‘on working people’ have been ruled out, making any and all smaller taxes far more attractive to raise – but by default, small taxes must be raised significantly to generate revenues noticeable to Treasury spending (which is seeking to urgently fund a £22bn ‘black hole’ including c. £10bn of public sector pay increases agreed in July).”
The £900 million and £3 billion range comes from two separate proposals:
The first would double some tax rates, such as the 15% tax on retail bookmakers while leaving lottery and bingo rates untouched. It would also bump the online tax rate from 21% to 50%, which gets it to £3 billion.
The second, yet-to-be-submitted proposal calls for doubling the online tax rate to 42%, which would raise £900 million.
The group behind the first proposal, the IPPR, suggested, “This is the best application of the ‘polluter pays’ principle, and it will create incentives for companies to focus on lower-harm products.”
Regulus believes there is room for a slight tax increase on online gambling (to 25%) but scoffed at the polluter argument, saying, “Reducing the scale and capability of a regulated sector does not reduce ‘pollution.’”
The second proposal, from the Social Market Foundation (which receives funding from gambling-reform crusader Derek Webb, who has been the fifth largest donor to the Labour Party since 2023), uses US tax rates to bolster its case and points to the recent tax increase in Illinois. Although this is becoming an international trend, as Regulus highlighted, the UK has a low, by evolving standards, online gambling tax rate:
“The UK gambling sector is not alone in facing fiscal pressures; this year alone, Sweden has increased GGR taxes by 22% from 18% to 22%; The Netherlands is increasing GGR taxes by 24% from 30.5% to 37.8% over the next two years; and France just drew back from a blatantly self-defeating c. 60% GGR tax increase to over 60% GGR.”
If these proposals are officially introduced, I suspect other US talking points will enter the discussion, as a tax increase of this magnitude will have numerous knock-on effects. Operators will call the burdens a gift to the black market, which will eliminate jobs as the UK sector becomes unprofitable and the government gets a bigger cut of a much smaller pie.
California Sports Betting: 2026 or 2028?
“There was a lot of exhaustion,” James Siva, chairman of the California Nations Indian Gaming Association, said of the failed 2022 ballot initiatives during a G2E panel discussion, per reporting from CDC Gaming Report’s Buck Wargo.
“I was exhausted, and a lot of California leaders in this room were exhausted, but we never stopped talking about sports betting,” Siva said. “At every CNIGA meeting, we were laying out a game plan. Everyone said maybe we should take a pause. We will take (off) an election cycle (in 2024) and keep working on this.”
Siva went on to say that CNIGA has reformed its sports betting workgroup to formulate a tribal strategy for sports betting.
Commercial operators and California tribes are trying to mend fences. Still, tribes will hang a no-trespassing sign on that fence unless they agree that, as Siva said at G2E, “Any entry of new gaming into California will be controlled by tribes. Period. Tribes are the operators in California. Period. The future of sports betting belongs to tribes in California. Period.”
That said, I remain convinced that the major commercial operators will be included when California legalizes online sports betting.
Bringing in the major operators will save the tribes on the front end and possibly the back end of sports betting legalization.
“Some suggest that tribes can do it alone and partner with B2B companies. However, I’m having trouble envisioning a world where the major online operators sit on the sidelines while tribes and B2B suppliers push through a mobile betting initiative in California. They would have to oppose such a measure, which could very well lead to another failed (and costly) ballot initiative, costing California tribes hundreds of millions of dollars and eating up several more years of precious time."
“Yes, tribes hold the keys to the market, but they will need the expertise of commercial operators to get peak performance out of the car. Tribes are not mobile sports betting experts, and in a world where they partner with B2B suppliers, they would be in the driver's seat or have to pay someone to chauffeur them around (too many car analogies?). The suppliers aren’t going to supply that expertise for free, nor will they do the marketing for the tribes, as the major operators would.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Much of poker’s history has been lost to time, with poker historians relying mainly on oral tradition. Well, it looks like enough is enough, as the poker community has raised hell about more history getting erased, and in this case, they won:
As always, Pokerfuse has a terrific write-up on the kerfuffle.
For anyone looking for more poker history, I recommend Harry Lang's recently concluded 8-part LinkedIn series on an early online poker site, Goal Poker.
For something even older, I spoke with one of the people at the 1969 Gaming Fraternity Convention (the World Series of Poker before it was ever called the WSOP), Carl McKelvey, in this now decade-old article.
Stray Thoughts
The title of today’s newsletter is a quote attributed to Aristotle. It’s a fun quote to think about, and I’ve never really worked out a “Steve’s take on this quote” for it.