Bill Miller Discusses The 5th Anniversary of PASPA, Illegal Gambling, And Future Growth
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The repeal of PASPA has transformed the U.S. gambling industry. As part of our ongoing coverage of the five-year anniversary of the repeal, we sat down with Bill Miller, the President and CEO of the American Gaming Association (AGA), to get his thoughts on the historic ruling, what has changed in the last five years, and what the next five years might have in store.
The AGA also released the results of a survey today that found 85% of Americans agreed with the Supreme Court decision to overturn PASPA, and 77% support legal sports betting in their state. The full survey can be found here.
The Big Picture
Steve Ruddock: What are some of the major changes the industry has seen since the repeal of PASPA?
Bill Miller: The invalidation of PASPA paved the way for the most significant expansion in the gaming industry’s history. Before the PASPA decision, we had one legal sports betting site in Nevada, now we've got 33 states live plus the District of Columbia in less than five years. More than half of American adults now have the opportunity to bet legally. And I think, importantly, the overwhelming majority of Americans, 85%, believe that the Supreme Court did the right thing. That's up from 63% in 2019.
The industry has also been able to move consumers away from the illegal market into the safe, regulated market. That's good for consumers, but it’s also really important for state and local governments who have collected $3 billion in tax revenue. That’s something that we're proud of and couldn’t have happened without the Supreme Court decision.
Responsible Gambling
Steve Ruddock: You mentioned 85% of Americans agree with the Supreme Court decision. One of the big topics has been the responsible gaming front, so it sounds like the messaging has been working, and people feel pretty good about where it's at. Where is the industry when it comes to responsible gambling?
Bill Miller: RG is not new to the gaming industry. We took our commitments from the broader gaming industry and evolved them for the sports betting market. And there's always a conversation about advertising. Is it too much? Is it not enough? I mean, it is important to remember advertising is a primary method to move people from the illegal market into the legal market. So, we try not to get caught up in the day-to-day headlines and focus on really moving the needle to protect consumers and build a sustainable marketplace.
And 8-in-10 sports bettors feel the industry is doing a good job providing resources to encourage responsible wagering. I know there are always detractors and people that may think we're not doing enough. But when you get 8-in-10 sports bettors believing we are doing right by them, and we know that one hundred percent of the illegal market is doing absolutely nothing to encourage responsibility, we're on the right track.
I'm very proud of what the industry's done in and around RG. At the end of the day, it's core to the long-term success of the industry. Whether we’re talking about brick-and-mortar properties or online verticals, this is one of the main reasons why our industry has become increasingly more mainstream in the eyes of the public and policymakers.
When we decided to create Have A Game Plan, it was with an eye towards ensuring this whole new group of business partners, if you will — teams, leagues, arenas, broadcasters — that they recognize they have a responsibility along with us to make sports betting successful. And to learn from some of the other markets like the UK or Australia or Spain or Italy where sports betting went wrong since we only get one opportunity to get this right.
Gambling.com is doing a multi-part series on the fifth anniversary of the repeal of PASPA, which opened the door for each state to consider online gaming. Today, Bill Miller discusses The fifth anniversary of the PASPA repeal.
Gambling.com is doing a multi-part series on the fifth anniversary of the repeal of PASPA, which opened the door for each state to consider online gaming. Today, we look at responsible gambling.
- Today: NCPG Head Keith Whyte Discusses 5 Years Of Responsible Gambling In A Post-PASPA World
- Wednesday: States Lose the Fear of Gambling
- Thursday: How the Repeal of PASPA Came to Be
- Friday: Las Vegas' Demise Was Greatly Exaggerated
- Sunday: 10 Years of Legal Online Gambling and Five Years of Legal Sports Betting
- Sunday: What’s Next For Gaming in the U.S.?
Curbing the Illegal Market
Steve Ruddock: You’re drawing a very clear distinction between regulated and offshore markets. One of your top priorities has been urging law enforcement to crack down on illegal gambling. Where is that right now, and what are the difficulties in accomplishing that?
Bill Miller: There are a number of challenges in trying to eradicate the pervasive illegal market, but we’re making impressive headway. And the illegal market I define as two distinct pieces. There are offshore, illegal websites that might be legal in Curacao or Costa Rica, but they don't hold licenses in the United States. So, by definition, they are illegal in states that have legal online sports betting.
It's a challenge … trying to put a higher priority among law enforcement, particularly at the U.S. Attorney General, Department of Justice, and FBI levels…but we're making progress, and we continue to gain traction.
The other piece of the illegal market we are spending a great deal of time on is these skill-based machines that are nothing more than slot machines and are popping up in states like Virginia and Pennsylvania and elsewhere.
So, it’s a dual-track approach in terms of getting law enforcement to prioritize protecting our industry. And pre-PASPA, you might give these folks a pass because if you didn't live in Nevada, you couldn't actually bet on sports legally. It would have been naive to think that people weren't betting on sports pre-PASPA. So the fact that law enforcement kind of turned a blind eye to it. You know what? You might give them a pass, but now that there is a live, legal sports betting market in 33 states and DC, it's no longer appropriate for law enforcement not to help and support a legal industry any more than they would support any other legal industry.
Educating Consumers
Steve Ruddock: Consumer confusion was another interesting part of your survey. That seems to be one of the more overlooked aspects of the regulated-unregulated discussion. Offshore sites have done a really good job, especially in states where it's not technically legal, of confusing consumers into thinking they're betting legally. I know one of the things we see a lot on the affiliate side is the minute a state legalizes, months before launch, there are sites that say, bet legally in Kentucky, and they're sending you offshore. Is this just an education thing? After five years, you would hope to put a pretty good dent in this. Have you seen any movement on that front?
Bill Miller: We've seen a lot of movement on that front, but it’s important to remember that even though it's been five years since the decision passed, it hasn’t been five years since all 38 jurisdictions legalized sports betting. Each state went through a process to create legalization. And certainly, Delaware and New Jersey were up quick and early. But, many states are still nascent markets, and consumers are still figuring out the legal sports betting landscape.
It's clear from our research that sports bettors overwhelmingly want to bet legally, with 78% of bettors placing all or majority of bets through regulated operators. But there are still a significant number of consumers that are confused by what is legal and what isn’t. Our research shows that 70% of the bettors who placed the majority of their bets illegally actually thought they were betting legally. That confusion exists, and we're working with the platform providers and the search engines so that they do not facilitate that.
From our research, the top reasons people point to when asked what they take into account when judging if a sportsbook is legal or not are, first and foremost, an affiliation with a casino company. But when you look further down the list, the second biggest factor that people say they consider is just a statement on the site's website that it's legal. And, of course, all the offshore books say that. Finally, the third biggest factor was being mentioned by the media. When people see an offshore site cited in a media report, they take that to heart and if not an endorsement of the site, at least an endorsement of the site's legality.
The Health of the Gambling Industry
Steve Ruddock: I’d like to shift gears and discuss the general industry over the last five years. So obviously, we had the PASPA repeal, but right after that, we also had a pandemic that hit a lot of land-based casino operators hard. I was curious how they're rebounding in terms of revenue and jobs and where you see that going.
Bill Miller: In terms of revenue, the gaming industry has never been stronger. If we look at 2022, it was the first year the industry has ever reached 100 billion dollars in gaming revenue.
We know $60 billion in revenue has come from the commercial space. And while all the tribal numbers haven't been made public, we think it's very likely that for the first time in the history of the industry, it will be over a hundred billion dollars in total gaming revenue.
And as the industry continues to grow, it continues to provide strong jobs in communities across the country. When you think about it, going from almost a thousand casinos in America shut down for months during COVID to where we are today with hiring is pretty remarkable.
The Amusements, Gaming, and Recreations sector is just about 3% below where it was in February 2020, right before the pandemic. So, in terms of jobs, the overall sector is not quite back but is pretty close to where it was before the pandemic.
Legalization Prospects
Steve Ruddock: Sports betting is legal in 38 states (give or take a state or two), but the three most populous states are still without legal sports betting. I was wondering where you see sports betting five years from now.
Bill Miller: Looking backward, it’s pretty remarkable to think we went from one state in America where you could legally bet on sports to 37 plus D.C. I've spent most of my life lobbying government, advising government, and that is a really fast uptake for anything.
We now have 57% of American adults who have the ability to bet legally on sports in their home state. But as you point out, we've still got some pretty big ones out there that haven't crossed the finish line.
Now, we’ve always recognized that each state will have different timelines for legalization, if at all, and each state has its own stakeholders and political environment to navigate. And, certainly, California, Florida, and Texas all have unique dynamics.
But in five years from now, do I think that one or all of them will all have sports betting? I think it's more likely than not. In Florida, it's all about the disposition of the courts. Texas must work its way through a legislature that meets every other year. And in California, they've gone through a battle over sports betting in the last election. Now the question is can the tribes and the commercial sports betting operators come to an agreement??
Steve Ruddock: And, and if we look at what happens after that, we're kind of running out of jurisdictions that can legalize sports betting because of the success.
Bill Miller: Unless we start adding states, you're getting pretty close to a place where it stalls. We certainly don't believe that Utah and Hawaii are going to change their posture around gaming, and that's fine. The whole intent of the state's rights in and around gaming is intentional; let the constituents of a particular jurisdiction decide what level, if any, of gaming they want.
I imagine that some states will never address or offer sports betting or iGaming or even brick-and-mortar casinos. That's how the system was designed, and we're supportive of that system.
This cycle, Vermont is pretty close to legalizing, and I think that North Carolina has a legitimate chance, and Minnesota probably as well.
Is iGaming the Next Frontier?
Steve Ruddock: One of the things I believe sports betting has done is it has familiarized lawmakers and regulators with the guardrails that are in place around the industry, whether it's geolocation, tech, KYC, or payment processing. That was always one of the big hangups for iGaming legalization. With that handcuff removed, do you expect to see iGaming legalization spreading across the country?
Bill Miller: iGaming offers some interesting opportunities. It clearly was a lifeline for brick-and-mortar brands during COVID in places where it was an option. Now, the question with iGaming is how it interacts with brick and mortar. Every jurisdiction will approach that differently. And that's appropriate, and probably why you haven't seen it kind of move with the same rapidity as you have with sports betting. The other observation I would make is that many of the brick-and-mortar properties that had digital gaming utilized it well during covid and have continued to use those channels to reach their customers. Many companies have begun to believe that there is an omnichannel dynamic that allows for iGaming, sports betting, and brick-and-mortar to coexist and view one another as not harmful but actually additive.
We've seen the industry become less fearful or evolve in their views around iGaming because of the experience that they've had during Covid and post covid.
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