Key Gambling Takeaways from the Midterms

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Everyone with a microphone or a laptop called them the most important midterm elections in modern US history; the political event that would shape the remaining two years of Donald Trump’s Presidency by either weakening his power or further expanding it. But even though the future of one of the most controversial political figures of our time takes center stage in post-election comments and discussions, it should also be noted that the midterms will have a shaping and lasting effect on the nation’s casino and sports betting landscape.

The legal sports betting market has been expanding rapidly in the wake of the mid-May landmark ruling of the US Supreme Court that struck down a federal ban on wagering on professional and amateur sports. It is now up to individual states to decide whether they should legalize sports betting, but in some states the legalization process cannot happen without the approval of a majority of its voters.

Tuesday’s midterms saw Arkansas voters take to the polls to cast a vote on whether they wanted legal sports gambling, among other things. But aside from Arkansas, a few more states had casino- and/or betting-related measures on the ballot. In addition, the choice of a Governor in a few other states is poised to have a direct impact on gambling in those in the coming few years.

Here are several gambling-tinged takeaways from the 2018 midterm elections and what the results mean for the US gambling industry.

Florida Hands Gambling Decision to Its Residents

Amendment 3 was one of the most controversial and widely discussed measures on the 2018 Florida ballot. Titled Voter Control of Gambling in Florida, the initiative aimed to ensure that state residents were given the “exclusive right to decide whether to authorize” any proposals for gambling expansion on the territory of the state.

The measure was overwhelmingly approved with 5,572,528 ‘Yes’ votes cast to just 2,227,226 ‘No’ votes. This means that any proposed changes in the state’s gambling landscape will first have to be approved by a 60% majority of Florida’s electorate.

The initiative was spearheaded by the Voters in Charge ballot measure committee. The organization managed to collect the required number of signatures early this year after a long lobbying campaign. Lobbying efforts continued throughout the year and those included several big corporations pouring significant amounts of money in support of the measure.

Here it is important to note that Amendment 3 was promoted as an initiative that aimed to restore voters’ control over casino gambling and gambling as a whole. That control had belonged namely to voters for decades after gambling had originally been legalized on the territory of Florida. It was only a few years ago when state lawmakers assumed control over gambling-related decisions.

Amendment 3 could not have succeeded without its major donors, which most notably included Disney Worldwide Services Inc. and the Seminole Tribe of Florida, which owns and operates casinos across the state. Each of the two gave in excess of $20 million ahead of the midterm elections to lobby for the passage of the proposed amendment.

And each of them have interest in having voters decide on the future of gambling in the state. The Florida Legislature has been trying to expand the local gambling industry, a move that would impact negatively both Disney and the Seminoles’ operations.

Now, as it is up to voters to decide on such matters, the two corporations will be able to lobby against expansion efforts – Disney in a bid to keep its tourism dominance across the state and the Seminole Tribe to keep its casino preeminence. The Seminoles are currently the exclusive operator of table games in the state, generally known to be among the most popular and highest grossing gambling activities not just in Florida but globally.

The Amendment 3 opposing camp was prominently backed by the Miami Dolphins. The NFL franchise got a little bit political in the months ahead of the November 6 elections, quietly spending money on lobbying against the initiative. The Dolphins eventually got a bit vocal on the matter on Monday. In a Tweet from that day, the team urged Florida residents to vote ‘No’ as the amendment’s passage would effectively put an end to sports betting legalization hopes.

Arkansas Voters Approve Casino, Sports Betting Expansion

In Arkansas, residents voted on and passed Issue 4, a constitutional amendment that authorizes the state Racing Commission to issue four casino licenses in four different counties. The initiative could also see the state soon join the ranks of those that offer legal sports betting. The proposed amendment passed by a significant 54.1% to 45.9% margin.

Here it is important to note that with Arkansas being among the nation’s horse racing hotbeds, the legalization of wagering could create a very promising market.

In addition, Issue 4 was promoted as an initiative that aimed to prevent Arkansas from losing gambling money to neighboring states, most prominently from Mississippi. According to statistics from the latter state’s gambling regulator, residents of Arkansas made more than 1.14 million visits to casinos across Mississippi in 2017. In addition, the latter legalized sports betting following the Supreme Court’s ruling and several of its casinos now operate sports books.

A study conducted by the Arkansas Economic Development Institute at the University of Arkansas at Little Rock claimed that the approval of Issue 4 could result in an economic impact of $5.8 billion for the state over a ten-year period and would create more than 6,000 jobs. As mentioned earlier, the measure now enables the Racing Commission to grant four casino licenses for the provision of full-scale gaming options as well as of sports betting services.

The Oaklawn Racing & Gaming and Southland Gaming and Racing already hold licenses for electronic games, but as Issue 4 was passed, they will be able to obtain casino licenses, as well.

The ballot measure was proposed by the Driving Arkansas Forward initiative. The group had quite some challenges in its bid to put Issue 4 on the November 6 ballot. The measure was rejected by state Attorney General Leslie Rutledge several times due to its wording and other issues spotted by the official. It eventually received the necessary approval in May. Driving Arkansas Forward then had to gather 84,859 valid signatures in order to have its proposal added on the ballot.

Louisiana Could Soon Offer Legal Daily Fantasy Sports

Daily fantasy sports contests have gained quite some popularity over the years, with DraftKings and FanDuel being the absolute rulers of that nascent market. Among other things, Louisiana voters were given the opportunity to voice their opinion on DFS at the midterm elections.

Unlike in other states, the Louisiana DFS initiative had one major complication. Instead of a statewide approval, DFS contests will only be legal in those of the state’s 64 parishes that voted ‘Yes’ on Tuesday. The measure was passed in 47 parishes.

However, it will be a little while before DFS services go live in the state. Lawmakers will have to draft and approve a legislation that will set out the regulations under which the nascent industry will operate.

While the DFS vote does not have any direct impact on the potential legalization of sports betting in Louisiana, analysts believe that it can be indicative of how residents feel about legal wagering. State lawmakers failed to act on sports betting this year but have promised that at least one bill on the matter would be tabled during next year’s legislative session.

What Do Illinois, Ohio, and Georgia’s New Governors Think of Expanded Gambling?

Democrat J.B. Pritzker toppled first-term Republican Governor Bruce Rauner in the Illinois gubernatorial race. Gambling expansion has long been a topic broadly discussed by state lawmakers, but efforts for the addition of more gambling options to Illinois’ existing market have traditionally failed in the Legislature.

While sports betting was not a main issue in Governor-elect Pritzker’s campaign, he has indicated earlier this year that he would support its legalization. Mr. Pritzker has told local media that betting has proved to be “a revenue generator” and that it should be regulated with the right laws in place.

Ohio also elected a Governor who has shown support for sports betting. Republican Mike DeWine, who has served as the state’s Attorney General since 2011, won the elections Tuesday. Commenting on the mid-May SCOTUS ruling, Mr. DeWine said earlier this year that while he was not a fan of gambling, he would support the creation of a well-regulated sports betting industry in Ohio.

In Georgia, efforts for the legalization of casino gambling have been launched on multiple occasions. But those have all failed, despite promises of major economic impact from the construction of destination resorts with casino floors in the state, including a mega-resort in Atlanta.

Republican candidate Brian Kemp will take over as the state’s new top official early next year. Mr. Kemp has previously said in comments during his campaign that he would oppose any casino legalization proposals if he won the race. State lawmakers have revealed plans to table casino bills next year, so it is yet to be seen whether any future efforts will succeed with Mr. Kemp heading the Legislature.

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