Controversial Indiana Bill Would Legalize Sports Betting

Controversial Indiana Bill Would Legalize Sports Betting

The House Committee on Public Policy in Indiana held an almost five-hour-long hearing this week on a gambling expansion package that is the state’s way to legalize sports betting in 2019.

Senate Bill 552 cleared the Senate last month, and the committee discussed provisions on the bill during the meeting. After the lengthy discussion, it became obvious that the bill’s passage is somewhat of a coin flip at this point.

The bill would allow for statewide mobile and online sports wagering. Bettors would need to sign-up in person for mobile accounts at a casino or off-track betting facility. It would also mandate that sportsbook licensees purchase “official” league data for in-game bets.

The bill would legalize betting on both professional and collegiate sports and prohibits it on e-sports as well as high school and amateur sports.

Sports betting in Indiana isn’t the focal point of the bill. A lot of other controversial aspects are apart of the bill that may prevent the bill from passing, and in turn, cause Indiana to miss out on the opportunity of legalizing sports betting this year. Other aspects of the bill include casino license relocations and moving up the date of legalizing table games from 2021 to this year.

The bill would require the casino industry to use data from the leagues’ third-party suppliers in order to determine the outcome of in-game wagers. Despite many sportsbooks already using certain suppliers that are partnered with the leagues, there are concerns of data monopolies that would result in price gouging.

Caesars Entertainment, which has casino property in Indiana, has a partnership with the NFL and the Indianapolis Colts. The Colts testified in support of the bill at the hearing. Dan Emerson, Chief Legal Officer for the Colts said, “we firmly believe that the sports betting framework represents quality legislation. There is no greater priority than protecting our games.”

Emerson believes that Indiana’s sports betting provisions could be a “model” for other states. Representatives for the PGA Tour, MLB, NBA and IndyCar racing also testified in favor of requiring official league data.

Matt Bell, President and CEO of the Casino Association of Indiana, says the Association is in support of some aspects of the bill. He says that mobile sports betting is the best way to go in order to get bettors away from black market sites. However, the Association has serious concerns with the in-game data mandate.

“One area where we struggle and cannot support is on the issue of official data,” Bell said. “You’re being asked as a body to be the first jurisdiction to create a monopoly-data situation for a league. Leagues have said that they have to do this because the market is exploding. Globally, it is estimated that sports betting is about a $104.3 billion enterprise. 60 to 70% of that is mobile. At that level of wagering today, if there were integrity problems that had ensued, we would read about them all over the place.”

“As operators, we have a profound interest in making sure that any data that we use is accurate and reliable. We don’t simply sit people in garages and call them to ask them what the score was,” added Bell. “Remember, you have a world-renowned Indiana Gaming Commission to regulate this activity. In Nevada, the [sports betting] statute is thin and they left a lot of the work of defining and regulating this to the regulator. I encourage you to consider that model.”

A sports betting study from Oxford Economics in 2017 projected that an Indiana sports betting market that includes mobile betting could see more than $5 billion in wagering each year while generating more than $370 million in taxable gaming revenue.

It is still uncertain what tax rate would be imposed on casinos for sports betting, but is expected to be between six and 10 percent, which would be lower than the rate they pay on other forms of gambling.

Co-sponsor of the bill, State Senator Mark Messmer, said there was “good discussion on amendments.” With the session ending in a little over a month, it may be tough for the 130-page bill to be reworked in enough time to satisfy stakeholders.

“Watching our state’s gaming market decline for a period of years and remain flat recently was my impetus to look at a comprehensive bill that can help revitalize our gaming industry and have a positive impact on our budgets,” Messmer said about the legislation. “The budget impact from SB 552 will be in excess of $100 mm.”

Senator Jon Ford, another co-sponsor of the bill, said that Indiana residents spend $300 million on illegal sports betting and that the bill would provide a safe and legal framework.

The Public Policy Committee is planning to have a vote on the measure after Messmer’s changes, which could be as soon as next week. This is the only chance Indiana has to see legal sports betting in 2019.

Related Articles