Sports betting legalization could be closer in Texas than it is in California, at least in the eyes of BetMGM and its chief executive officer.
Texas and California remain the two great untapped markets for legal online sports betting sites in the United States, and it looks like neither state is poised for any major changes to gambling policy in 2024.
However, for one major sportsbook and online casino operator, BetMGM, the odds of legalization look better for Texas than they do for California.
“California is not in our near-term model, Texas is,” BetMGM CEO Adam Greenblatt said Wednesday at the NEXT Summit New York 2024 in Manhattan.
I have made it to NEXT Summit New York 2024 in Manhattan. First panel of the day is about predictions for 2025. Betr CEO Joey Levy (whose company just announced a $15M fundraise at a $375M valuation) says the distribution model for operators will have to change. pic.twitter.com/RUGIbBTRYy
— Geoff Zochodne (@GeoffZochodne) March 6, 2024
BetMGM was part of the coalition of operators that tried and failed to legalize online sports betting in California in 2022, so those scars and lessons are still relatively fresh.
In Texas, however, the legalization lobby might have gained another ally with the recent multibillion-dollar purchase of a controlling stake in the NBA’s Dallas Mavericks by the families behind casino operator Las Vegas Sands Corp.
The Texas legislature will not have another regular session until 2025, which means any sports betting bills will have to wait until then, barring intervention from the governor. Nevertheless, Greenblatt was asked by CNBC’s Contessa Brewer on Wednesday if the Mavericks acquisition would make a difference with lawmakers.
“The team owners in Texas are very influential, and so the answer to that is yes,” Greenblatt said.
A not-so-golden opportunity
But California remains further off, according to the BetMGM CEO.
“California has unfortunately snatched defeat from the jaws of victory too many times before,” Greenblatt said. “Sharing is hard in California. There are too many incumbent, very strong, influential groupings.”
First and foremost among those influential groups are the Native American tribes involved in casino gambling in California. It was the tribes who led the opposition to online sports betting in 2022, and it was the tribes who shut down an effort to get another question on the ballot this year.
“And so the passage to sports wagering in California is a deal which includes the tribes as partners,” Greenblatt said.
Behind the scenes
The comments made Wednesday suggest legalization of sports betting in California or Texas remains years away. Even so, the debate is important for the industry, as legalization in either state would unlock the largest state-level market in the U.S. for sportsbook operators, with millions of new customers there to be acquired.
Sports betting legislation also made some headway in the Texas legislature last year before ultimately falling short. Furthermore, “interested parties are working behind the scenes to get online sports betting legalized in 2025,” JMP Securities analyst Jordan Bender wrote in a March 5 note to clients.
“Texas would represent the largest sports betting jurisdiction in North America by revenue, in our view, and the failed 2023 bill offered two notable catalysts: 1) legalization and 2) a near industry low 10% tax rate,” Bender added.
