- The Coronavirus pandemic has been leaving states with major gaps in their budget because shutdowns have halted incoming tax revenue.
- People in the sports betting industry think that states may begin to legalize sports betting quickly to gain a new source of revenue that will help with the losses.
NEW YORK – Jay Snowden, CEO of Penn National Gaming, believes that the U.S. will see more states legalize sports betting as a result of the Coronavirus pandemic.
When talking to CNBC on their show “Power Lunch” on Thursday, he said that he and his company have the idea that the country will be looking for extra revenue streams to help cover the losses created by COVID-19 and legal sports betting could be one of those revenue sources.
“We think that this legalization process that is happening at the state level stands to accelerate, and we really think we’ll benefit from that because we operate in more states than any gaming company in the world,” said Snowden.
Although, Snowden is not the first in the industry to speak on this topic amid the outbreak.
The Thought Process
It’s true that states across the nation are enduring big financial losses because COVID-19 is forcing businesses to shut down to keep the virus from spreading. While legalizing the gambling on sporting events could help, a few lawmakers with pending legislation have told Legalsportsbetting that it’s all up to how the positives seen will outweigh any negatives.
States without legal sports betting that are currently trying to pass legislation do not see the industry as a pure cash cow. But they do believe the pandemic could work in their favor if others see that it’s legalization would create a revenue stream they didn’t have before. Even if it only creates $1 million a year, that’s $1 million the state didn’t have that they can now put toward their deficit.
Others within the industry also think COVID-19 will have states move more swiftly toward legalizing the pastime.
DraftKings CEO Jason Robins shared similar thoughts last month with the CNBC Network.
“I think once the pandemic is under control, and maybe some of the economic impacts that result from it become problematic for state budgets, you could see more focus on things that will generate tax revenues,” said Robins.
“That’s not now. There’s a time and place for that later, but I do think there might be an opportunity to engage with states that previously have been on the fence about passing legislation.”
States are facing huge deficits with California reporting an estimate of almost $54 billion lost because of the virus. Other states are trying to find ways to conserve by making budget cuts so that their final totals do not get higher than they need to be.
Yet since the losses are so big, this could also sway legislation in states to still keep their stance on not legalizing sports betting.
Tax revenue from the industry would not put a dent in the amount of money they would need. Given the shortened legislative sessions in 2020, states like Missouri may not have enough time to even consider something that doesn’t generate a lot of revenue at the moment.
However, some states may very well speed up legislation with the mindset that every little bit helps.
The idea by those in the sports betting industry makes sense but it’s a gamble as to which way the states will see the issue of legal sports betting. With so much for lawmakers to consider in such short amounts of time, bills to legalize sports wagering could go either way.
Christina has been writing for as long as she can remember and does dedicated research on the newly regulated sports betting market. She comes from a family of sports lovers that engage in friendly bets from time to time. During the winter months, you can find Christina baking cookies and beating the entire staff at Mario Kart…the N64 version of course.