A quiet year on the U.S. legislative front, with no new igaming or online sports betting (OSB) states expected, was forecast in a February 9 summary made by B Global founder Brendan Bussmann to Truist Securities gaming analysts. He also predicted “a quieter year” with regard to tax increases.
Bussman noted that the controversy over prediction markets will inevitably head to the United States Supreme Court and not see a clear outcome for at least two years. Individual states are taking a wait-and-see attitude, pending action by the Third Circuit Court of Appeals. Kalshi has received a preliminary injunction from the appellate court.
Should the Third Circuit Court prove unfriendly to Kalshi, Bussmann contended, states might move to strip legacy operators of their gaming licenses if they have dabbled in event contracts. The downside, he contended, would be the loss of OSB-derived tax dollars. However, “A clear counterargument is that customers will just switch apps without a real loss of tax dollars in such a scenario.”
Bussmann laid out the opposing arguments as prediction markets believing they can be regulated only at the federal level, while the states contend that “this is a states-rights issue, as there is no current federal framework for licensing and regulating gaming.”
Although Bussmann felt SCOTUS would take the matter on board, he felt a ruling was a year and a half to three years distant. With tariff powers pending before the high court, prediction markets would not be deemed a priority issue.
Truist analysts wrote that the pundit “agreed with our previously stated view that prediction markets should either be a net neutral to positive development for data companies,” such as Sportradar and Genius Sports. He also felt that major-league sports would wait to see how the courts adjudicated prediction markets before embracing them fully, with the NFL having proven the most skeptical.
Virginia was deemed “a little noisy” with regard to gaming expansion, due to the election of Gov. Abigail Spanberger. Bussmann thought a northern Virginia casino was inevitable, possibly an investment on the order of $1 billion, a competitive threat to MGM National Harbor and Churchill Downs’s The Rose.
Gray-market “skill” games were another potential issue, but Bussmann was less confident they would pass out of the Virginia Legislature. He was most skittish, however, on igaming legalization, noting that the Cavalier State’s budget is “healthy,” with no deficit.
By contrast, Pennsylvania is looking to raise $2 billion and Gov. Josh Shapiro has targeted gray-market games and legal marijuana as potential sources of revenue. Under Shapiro’s proposal, skill games would be swapped out with video gaming terminals, taxed at 52 percent.
In addition to slot-operator Accel Entertainment, “It could be a significant opportunity if it proceeds … to slot manufacturers like Light & Wonder.” Although the Keystone State budget must be settled by June, Bussmann thought the VGT debate could persist well into the year.
“While the proposal lessens the chance for an OSB/igaming tax increase,” Bussmann “does not view such a scenario as ‘completely off the table,’ especially as the state still has holes to plug in its deficit,” read Truist’s summary.
The pundit felt the impact of legitimization of gray-market machines would be “less material” to casinos. He added that new video-lottery terminals would likely displace the existing skill games.
Events in Maine, he continued, would not have a domino effect elsewhere. Although the Pine Tree State recently legalized igaming, Bussmann felt there was a chance for a repeal at the ballot box, should opponents gain 65,000 signatures.
Bussmann also told stock analysts to keep their eyes on Maryland (potential tax increases) and Arizona (ditto), “but Mr. Bussmann is less concerned given local tribal interests.” Although a tax boost has been discussed in West Virginia, he thought it unlikely, while igaming legalization or tax hikes were off the table in North Carolina for at least another month.
With labor unions in New York state against igaming and Gov. Kathy Hochul needing their support, Bussmann argued, the issue was unlikely to gain steam this year, but might see movement in 2027.
Igaming in Indiana was deemed unlikely in Indiana and uncertain in Massachusetts, despite “strong legislative activity” in the latter state. South Dakota, meanwhile, will weigh in on mobile sports betting in November.
In closing, Bussmann turned to overseas markets. He said, “Macau will continue to be a strong regional market supported by Chinese customers and will continue to see incremental growth.” However, he felt that when concessions come up for renewal, new terms may be extracted by China. “While that is still several years away, it still should be on the minds of those market players,” Bussmann opined.
Singapore was still a duopoly, with Las Vegas Sands “excelling and preparing for a significant expansion, while [Genting Berhad] continues to try and improve its operation with a more modest expansion. While no near-term changes are expected, the tone of recent license treatment suggests the government is willing to apply pressure if certain standards aren’t met.”
Finally, the United Arab Emirates were addressed. Bussmann felt the new market would be “extremely robust.” The emirates have a national lottery and have been dabbling in igaming, he noted, so “this market continues to be a growth story for the industry.”