Gambling research firm recommends that Indiana legislators act on sports betting during 2019 legislative session
Legal sports betting in Indiana could annually generate $466 million in economic impact by the first five years, if the State General Assembly legalizes the activity, according to a report by gambling research firm Eilers and Krejcik Gaming.
The market research specialist was enlisted by the Indiana Gaming Commission earlier this year to compile detailed study on the impact from the potential legalization of sports betting. The results of the study were presented on Friday during a hearing of the Committee on Public Policy.
The hearing revolved around the presented report and two sports betting bills that had been tabled before the committee earlier this year.
According to Eilers and Krejcik, the legalization of both retail and mobile betting in the state could generate $56.2 million in direct economic impact in year one. By the fifth year, mobile and retail could bring in $256 million in direct economic impact. In addition, the research firm believes the legalization of sports betting could create 729 full-time jobs by the fifth year.
The study further reveals that mobile betting could turn into the main driver of growth of the state’s betting market. According to Eilers and Krejcik, if only retail betting is legalized, the revenue projected would be much lower, starting at around $30 million in year one and rising to around $102 million by year five.
On the other hand, mobile betting is expected to account for more than a half of the market (around 57%) during the first year and to grow its market share to 68% by the fifth year. The authors of the study said that the absence of mobile betting could “cut roughly in half” Indiana’s sports betting market, and the “deficit would accelerate over time as more and more demand shifts toward mobile.”
The estimates presented in the report were based on other sports betting markets, the performance of the state’s existing gambling market, economic conditions, and the provisions featured in HB 1325, a sports wagering piece of legislation introduced by Rep. Alan Morrison early this year. The bill never advanced in the Legislature.
Under the provisions of the bill, the state’s 13 operational casinos would have been allowed to apply for a sports betting license. They would have all been able to offer sports betting in physical sportsbook and through mobile devices. Operators would have been required to pay a $75,000 license fee and $5,000 in annual administrative fees. Sports betting would have been taxed at 9.25% on annual gross gaming revenue.
Friday’s Hearing
As mentioned earlier, the Public Policy Committee held a hearing this past Friday, during which lawmakers heard input from betting technology providers, professional sports leagues, which were represented by NBA counsel Dan Spillane, an anti-gambling group, and other stakeholders.
Lawmakers were briefed on the efficacy and importance of geo-location to ensure that sports betting is only limited to the state’s borders. ID and age verification technology solutions were also among the issues discussed during the Friday hearing. While it is easier to verify a bettor’s age in the case of in-person betting at designated facilities, committee members were told Friday that in the case of online betting, a customer account should be tied into a credit account so that the bettor’s age is verified.
The highly contentious integrity fee issue was also brought up for discussion on Friday. This time, NBA’s Dan Spillane was asking lawmakers to consider the introduction of an updated royalty fee of a quarter of a percent of all bets made that would be contributed to professional sports leagues. Here it is important to note that HB 1325 contained a provision for a 1% integrity fee. Said fee has been discussed broadly across the nation, but has not been implemented in any of the states that have legalized and launched sports betting after the SCOTUS ruling from May 14 that struck down a long-standing federal ban on wagering.
What’s Next for Indiana’s Sports Betting Legalization Push?
Eilers and Krejcik’s report recommended that the Indiana General Assembly legalize sports betting during the 2019 legislative session as the the risks of delaying the process “outweigh the rewards.” The risks include a further growth of the black market, competitive disadvantage for the state’s casinos as neighboring states are expected to move forward with wagering legislations soon, and economic loss for the state, among others.
Yet, the report outlines certain rewards of delaying the legalization process, including Indiana being able to take time and study the impact of sports betting in other states, launching a better product from the very beginning, and securing more time for clarifying important policy details.
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