Eight Predictions for U.S. Sports Betting and Online Gambling in 2022

Eight Predictions for U.S. Sports Betting and Online Gambling in 2022

It’s the most wonderful time of the year — predictions season. Before we gaze into the crystal ball to see what 2022 has in store for the online gaming industry, let’s look at what we got right, or not-so-right, in 2021:

DOJ Backs Down on Wire Act

I correctly predicted that the Department of Justice would back away from the previous administration’s suspect interpretation of the Wire Act as applicable to all forms of interstate gaming.

After getting smacked down by the courts, and again on appeal, the DOJ sat quietly while the deadline for a Supreme Court case came and went. Hopefully, this manufactured controversy will remain settled for good this time.

Six New Sports Betting States

I predicted that at least six new states would pass online sports betting laws, including Maryland and Louisiana. This turned out to be true, as seven new states (New York, Florida, Connecticut, Maryland, Arizona, Louisiana and Wyoming) started taking bets, or at least paved the way to start taking bets, in 2022.

Arkansas online sports betting can still slide in before the new year if the Racing Commission approves regulations on Dec. 30.

Oddly enough, Massachusetts and Ohio, two states that looked like a lock to get it done, still haven’t acted.

More Online Casinos Coming

I overzealously predicted that online casinos would find a home in three new states, but only Connecticut, in a somewhat surprising move, crossed the finish line in 2021.

I am renewing my prediction for 2022. Stay tuned for my top candidates.

Work To Do in Texas

I predicted that Texas would steal the stage as the most interesting state for industry news in 2021. While Texas did grab its share of headlines, the bill quickly fizzled over a handful of ill-timed political controversies.

Unfortunately for sports fans in the Lone Star State, it will be 2023 before legislators get another chance.

Success in Pennsylvania, Michigan

I predicted that Pennsylvania could challenge New Jersey for first place in terms of online gaming revenue, unless New York failed to legalize sports betting and continued to send tens of millions in bets to their neighbors.

Legal mobile sports betting in New York still hasn’t rolled out, which will continue to play into New Jersey’s hands and keep Pennsylvania in the rearview until at least early 2022.

I also predicted Michigan would see tremendous success from the combination of iGaming and sports betting and they haven’t disappointed, gaining revenue steadily each month.

Canada Gets in Sports Betting Game

I correctly predicted that Canada would legalize single-game sports betting, which Parliament signed-off in August 2021.

Now, it’s up to each province to determine the finer points of regulation. So far, betting revenues in early adopter provinces have been somewhat of a mixed bag.

Sports Betting in the South

I predicted 2021 would be a breakthrough year for Southern states to adopt online sports betting, but only Florida got the job done … and only temporarily at that.

The party was over shortly after it started when the courts invalidated the Seminoles' gaming compact.

Dismal D.C. Performance

I will never go wrong underestimating the DC Lottery, which continues to be the disgrace of the legal sports betting world.

Each month, they continue to collect minuscule revenue — even as other states are positively flourishing — while rolling out a string of increasingly comical excuses for their lack of performance.

Things don’t move quickly at the D.C. City Council, but even they could be getting to the point of pulling the plug on the Lottery’s failed venture and opening up the District to private online operators, something they should have done to begin with.

Betting Beyond Sports

Finally, I predicted that sports betting would expand in scope to include all kinds of predictions, which would enable wagering on outcomes like Academy Awards, elections, weather, or — close to my heart — how many states will authorize online gaming in 2022.

This market hasn’t yet gathered as much interest as I would have thought, and gaming regulators have had their hands too full with their current duties to make this a priority.

The public is still enamored with sports betting, as increasing revenues continually show, but it’s only a matter of time before we see regulated wagering on future events beyond the sports world.

As for what’s ahead, here are my predictions for 2022:

Prediction 1: State Attorneys General Will Impose Restrictions on Gambling Advertisements

State regulators have already taken notice and voiced displeasure with the torrent of advertising in states with legal sports betting.

Customers face a bombardment much like the daily fantasy sports ad blitz of 2015-16, as companies fight tooth and nail in the all-important battle for customer acquisition.

While this marketing barrage will naturally slow down over time, it’s hard to see the industry successfully self-regulating the frequency of advertising until at least one state regulator or AG steps in.

Hopefully, this provides the wake-up call for the industry to get serious about right-sizing advertising before more drastic measures, like those seen in Ireland and the United Kingdom, are considered.

Prediction 2: Tribal Online Gaming Will Advance in New States, Despite Uncertainty

The Florida legal debacle has proven that the question of tribes being able to offer statewide online sports betting is far from settled, and that the federal Indian Gaming Regulatory Act (IGRA), as written, is not a green light for online betting that occurs off tribal lands.

Tribes in other states will have some important decisions to make — will they stick to offering online sports betting and iGaming on their lands, or look for statewide access even though it means regulation by state entities?

I predict that the uncertainty of IGRA, combined with the allure of a statewide audience, will be enough for tribes in states like Oklahoma, Minnesota, and Washington to consider working with state regulators and legislators to operate online gaming across their respective states in 2022.

Prediction 3: Three More States will Authorize iGaming

Now that online sports betting has been established, several additional states will be looking to level up to full online casino offerings.

I predict that Indiana, Iowa, and perhaps Colorado or Rhode Island, will pass legislation in 2022 to join the seven other states that already offer online casino games.

Prediction 4: The South Will Finally Get on Board With Sports Betting

States like North Carolina and Georgia made great progress in socializing the issue of sports betting in 2021.

Even Southern Baptist strongholds like Alabama came tantalizingly close to passing sports betting last year.

Despite conservative opposition to gambling generally, it’s hard to argue against the success of regulated sports betting in the 30+ states that have already legalized it.

If the Atlanta Braves make it to another World Series, expect North Carolina and Georgia sports fans to have the ability to bet on it this time.

Prediction 5: New York’s Sports Betting Market Will Undergo Significant Changes

Despite not even being up and running yet, the flaws in the State’s law have already been laid bare. Expect operators to push for legislation to lower the tax rate from the currently unpalatable 51% to something more in line with Pennsylvania’s 34%.

Meanwhile, those operators who didn’t make the initial cut, including household names and global gaming powerhouses, will continue to press for a license, which also incidentally reduces the state tax rate to about the same level.

Either way, New York should eventually become a more hospitable online gaming environment with (former Gov. Andrew) Cuomo out of the picture.

Prediction 6: Federal Legislation to Remove the Sports Betting Excise Tax Will Finally Get a Shot

After years of grumbling, mainly from representatives from Nevada and New Jersey, the time is right for the online gaming industry to mount a serious push to remove this arbitrary and antiquated tax that puts legal operators at a clear disadvantage to illegal offshore operators who pay no taxes.

At the very least, the .25% excise tax on legal sports betting should be used for a related purpose, such as a fund to allow law enforcement to finally go after egregious offshore operators that undermine the legal system.

Prediction 7: November ‘22 Ballots Will Bring More High Stakes for Sports Betting Expansion

In 2020, sports betting proved to be popular with voters in many states. But the stakes are even higher for two of the largest markets in the United States.

Right now, industry-leading companies are taking steps to get online sports betting on the ballot in Florida and California.

Of course, the tribes in these states have their own designs on sports betting, especially in Florida, where the Seminoles have already launched and shut down the state’s only online sports betting product.

Expect the tribes to open up their war chests in what could be an unprecedented and outrageously expensive battle leading up to the November ballot question.

Prediction 8: More States Will Join the Billion Dollar Handle Club Next Football Season

New Jersey shattered records in September 2021 with the first $1 billion sports betting month in the United States, a milestone Nevada matched in October.

Now that the high-water mark has been set, expect this to become something of a regular occurrence.

As soon as Illinois’ restriction on in-person registration officially expires in March, they could find themselves nipping at New Jersey’s heels for total handle. And could New York’s market reach the same heights in 2022?

Based on the sheer number of people in the state, it’s possible that both New Jersey and New York will do $1 billion handle next September.

Three other states to keep an eye on are Pennsylvania, Michigan and Colorado, although the latter two might be considered a stretch despite much of the U.S. sports betting market going gangbusters so far.