All eyes are on the Supreme Court to await the decision on the suit regarding PASPA (the Professional and Amateur Sports Protection Act). This case will undoubtedly affect the future expansion of sports betting in the US. The expected outcomes are for PASPA: 1) to be upheld; 2) to be ruled unconstitutional; or 3) for there to be a very narrowly focused decision that would only affect the State of New Jersey.

In the meantime, over 20 states have begun exploring legislation that will legalise sports betting should the Act be overturned. And the industry has kicked in to high gear in their own explorations and preparations should things open up.

SBC Americas asked Sue Schneider of, one of the foremost igaming experts in the business, to prepare a SWOT analysis to see how things may move forward.


What is clear now is that the landscape has clearly shifted in terms of the professional sports Leagues in the US. They have fought this expansion for years citing concerns about “integrity of the game.” But, now, several (most notably the baseball and basketball leagues) are actively lobbying for legalisation, even to the point of seeking a piece of the financial pie. And even the NFL (football) discussed this at their recent owners’ meetings. So, while the NCAA (National Collegiate Athletic Association) is still a hold-out, others are beginning to see the light and lend support to the legalisation efforts.

In addition, there is now a critical mass of states seriously poised to pass legalisation measures. West Virginia has already done so. This means that a constituency of states has been created which are clamoring for additional revenues, jobs, etc. So, they are now in the plus column on this issue. Those two developments alone have moved me from the “never in my lifetime” mode to “This may just happen.”


The most critical issue is making this lucrative enough for the established land-based gaming industry to want to get into the business.  (Yes, sorry, folks but the only way that strictly online operators will be getting in on this will be to partner with the terrestrial folks on a state by state basis. That’s just the way it is in the US.)

It’s become crystal clear that the typical sportsbook profit margin is in the 5% range. So, if it begins to get “nickeled and dimed” with other fees, that will be problematic. That’s why the American Gaming Association (AGA) is fighting the Leagues’ proposal of a 1% integrity fee so hard. According to those in the business, the 1% of gross gaming revenue (GGR) fee translates to a dwindling of 20-25% of profit.

The reason this is critical is because one of the purposes of legalisation is to migrate players away from illegal bookmakers, either offshore operators or local bookies. But, if players can continue to get a better deal (meaning lower price for the vig or commission) elsewhere, then that migration is in question. That is the big unknown.

The first question is, will state legislators even allow internet and/or mobile betting?  If so, can US operators compete with offshore operators?  For example, offshore operators (which already have a higher profit margin) often pay the fees for player’s payment processing.  In the US, it’s expected that these fees may be passed along to the players. And offshore operators, who run a very competitive business, typically offer bonusing (rebates) which at least appear to the player to offer perceived value.  (The “play through” restrictions may negate that value, in reality.)  And lastly, winnings would be taxed, more funds out of the players’ pockets.

So the question of whether players will actually migrate from illegal options to these remains to be seen. The immediate gratification that a quick cash-out of a legal gaming operation will offer over an offshore operator may be seen as an offsetting incentive.


It’s also clear that, in the US, the main opportunity is for the land-based gaming industry in those states that have a regulatory structure. This includes casinos, tracks, or even tribal casinos (if their compacts will allow it) as well as state lotteries. Some will be able to gear up quickly to allocate space for sportsbooks in their casinos.

And, again, it will be a state-by-state decision on whether they’ll allow the sports betting to extend to the internet and/or mobile devices. It will also be a state legislative decision if they expand the types of wagers beyond single game bets to those options that have proven very popular globally in more mature markets. Products like in-play betting or exchange wagering are very popular around the world. But, those types of products are not well-known, for the most part, in the US so it will take some education to get a buy-in and acceptance from state legislatures.

But, beyond gaming operators, there are clearly other possible winners if sports betting is expanded.  Sports data companies and media outlets which offer up a lot of eyeballs are easy ones that come to mind. But gearing up for sportsbooks whether terrestrial or online will certainly help small businesses in those locales that authorize them.


Clearly, if the Supreme Court decides to uphold PASPA and keep sports betting restricted, things will remain status quo for the short term. However, given the momentum mentioned before, it’s expected that the efforts will shift toward trying to repeal and/or amend PASPA via congressional action. Given the logjam in Congress at the moment, that may well be an uphill battle which will delay progress for a few more years.

If this path is necessitated, one of the biggest threats is the inability of this industry to come together for any sort of advocacy. We have a long history of not getting it together enough to offer a single voice. Perhaps this issue will be different. The AGA seems to have achieved enough consensus on the topic to move forward and commit resources to this effort. But, they’ve also stayed away from advocating for internet gambling in recent years due to an impasse among the members. Recently, however, other companies like Paddy Power Betfair, GVC Holdings and Stars Group have joined AGA and been added to the Board of Directors. This signals a possible change in the balance of votes on the Board and a prospective softening of the position on iGaming.

So, is there a Plan B if the court decision doesn’t go as some have hoped?  We don’t know.  But, clearly, things are different today than they were two to three years ago and that does give some hope for change.

Sue Schneider is one of the world’s foremost experts on the internet gaming industry which she began monitoring in 1995.  Starting as an owner of a leading gaming consumer portal from ’95-‘99, she then launched River City Group, which produced the largest i-gaming events in the world (GIGSE and EiG) as well as key industry trade publications, such as and the Internet Gambling Report.

She remains the principal of and consults on a variety of other independent projects in the industry. She is a frequent speaker at international gaming conferences and has testified to the US Senate, the US House of Representatives as well as the National Gambling Impact Study Commission in that country.