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 and 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 Summerhauser did a deep dive into online
sports betting, and he joins us now, and 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 pulled?
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 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 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 rate.
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.
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 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 bets.
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, you know, prior to this 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 happened.
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,
you know, we've had legal sports betting.
And so it's only 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, you know, 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 have 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
sort of 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 courts?
I would expect that the discussion is far from finished.
I would expect 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 you know, I would not dare to make a prediction as to how it's going to turn out.
But what we see is that our neighboring states have legalized this in some form.
So many other states across the country.
And so I think it's just going to continue to be a really hot topic going forward.
All right.
Work some our houses.
Thanks very much.
Thank you.
At the end of the day, I would not at all be shocked if something is legalized.
The interesting dynamic.