At the State Capitol, a bipartisan
legislative bill to allow online
sports betting in Wisconsin that
was on the fast track for a vote
was pulled from this week's
calendar.
Its future is uncertain, but the
legislation would have allowed the
online betting if it originated
from servers in tribal casinos
in the state, because under
the Wisconsin constitution, most
gambling is only legal on tribal
property.
The idea was for the state to
regulate and cash in on
the revenue generated from the
explosion of online sports betting
as other states have done.
Researcher at the Wisconsin Policy
Forum, Mark Sommerhauser, did a deep
dive into online sports bedding and
he joins us now. Thanks very much
for being here.
It's good to be with you.
So how surprised were you that
this otherwise fast-tracked bill
just got
Yeah, so it was an interesting
development.
It was also interesting to see how
the legislation had been
fast-tracked fairly quickly in the
weeks leading up to this last week.
And so perhaps the
speed with which the bill had come
forward, there may have been a
desire among some lawmakers and some
stakeholders to kind of take a step
back and
consider some of these issues more
fully.
So what kind of revenue could the
state realize if it legalized and
regulated online sports betting?
So that's a great question.
I have actually not seen any
projections as of yet,
probably in part because the
legislation would just be the first
in sort of a two-step process here
in Wisconsin. So even if this
legislation were to pass, be signed
into law by the governor, there
would still be an additional step
where the state would need to
renegotiate its compacts with the
tribal nations here in the
Wisconsin. So that would kind of
actually be the final threshold
to cross before you could have legal
online sports betting.
What we know from our research
is that we have looked at some other
states that have legalized
online sports betting.
As you alluded, there's been dozens
and dozens of states that have done
that just in the last few years.
And they have in some cases seen
quite large infusions
of revenue.
Of course, a lot of it depends on
how, the extent to which it's taxed.
And we see from state to state,
there are huge variations in that
from 5% to
50%.
Taxes.
So the rate differs hugely.
In states that have a high tax rate
and in larger states, it can be on
the order of hundreds of millions of
dollars in tax revenue a year.
Again, that's on the very high end
and that's with a very high tax
rates. So that's not necessarily
something that could be extrapolated
to Wisconsin, but it does give you a
sense of what some
states can see.
As we described, right now
people in Wisconsin can only place
bets online legally while physically
on site at a tribal casino.
How unusual is this across the
country, that kind of restriction?
It's fairly unusual.
I think there's only one or two
other states presently that have a
setup quite like that, in part
because so many states have,
that have some form of
legal gambling, have taken the
step already of legalizing the
online sports betting.
And so Wisconsin is fairly unusual
in that we permit it
legally, but only in this in-person
setting right now at the tribal
casinos.
So stepping back to your larger
research, describe kind of the
explosion of online betting
that we've seen.
Yeah, so the really big
trigger point for that was the US
Supreme Court ruling in 2018.
And what that did is it essentially
paved the way for states to,
it struck down a
law that previously had
barred most states outside of Nevada
from legalizing sports
gambling.
And what we saw was a very,
you know, swift reaction to
that Supreme Court Ruling.
And we are now at last
count. I believe at 39 states
that have some form of legalized
sports betting.
Nearly all of them permit online
sports betting, and
so that has brought about a really
rapid shift in this whole landscape
just since 2018.
And what do the numbers look like,
you know, from maybe five years
ago or ten years ago or something to
today in terms of the amount of
money being spent on these pets?
Right.
So, yeah, we've seen hundreds of
millions of dollars in revenue
increases in terms of the total
amount being gambled.
And, you know, again, prior to
the Supreme Court ruling, Nevada was
really the only state at a statewide
level that was permitting this.
Now we're up to almost 40 states
that are permitting it.
And there are more, as
in here in Wisconsin, that are
considering it.
So it's pretty staggering
the scale of how quickly that's
So people, I understand, are betting
not just kind of on the outcome of
the games, but on like individual
plays within the games and
so it's super popular and there's
always something to kind of bet
on, but what are the downsides to
this according to your research?
Yeah, so it's interesting, because
outside of, again, Nevada,
it's only recently that we've
had legal sports betting.
And so in
these 49 other states, only fairly
recent development that researchers
have been able to study at a large
scale.
So we're actually seeing a lot of
really interesting research coming
in just over the past couple of
years, where they started
studying this maybe three or four or
five years ago and are just starting
to get to the point where they can
draw some conclusions.
And those conclusions are mixed,
but I would say definitely contain
some areas of concern.
We have seen higher rates
of bankruptcy, of delinquency
in car loans and other forms of
loans and debt,
and in states that have legalized
sports betting relative to states
that had not.
And interestingly, at least one
paper that we read that
I think came out last year was even
able to take that a step further and
find a higher rates of some of
these.
Financial stressors within
households within states that have
legalized specifically online sports
betting.
So that's just one study again, but
there's more of this research coming
in kind of by the month here.
And it does raise some areas of
concern in terms of the
impact to households and
household finances that
sort of large scale legal
sports betting can potentially be
associated with.
And not even speaking of kind
of the gambling addiction that
it could potentially trigger
in some.
Do you expect this move to
legalize it in Wisconsin will die or
be revived somehow possibly
through the court?
I would expect that the discussion
is far from finished.
I would except that there's going to
be a lot more discussion both among
the stakeholders, the tribes, and
some of the other stakeholders,
because everybody kind of sees
where the national landscape is
going.
But I would not
dare to make a prediction as to how
it's going turn out.
But what we see is that our
neighboring states have legalized
this in some form, from so many
other states across the country.
And so I think it's
just gonna continue to be a really
hot topic going forward.
All right, Mark Sommerhauser, thanks
very much.
I mean, at the end of the day,
I would not at all be shocked if
something is legalized.
Yeah. The interesting dynamic is
that, you know, it's a very, very interesting dynamic.