Gaming expansion a 2021 topic as states repair budget holes caused by COVID-19 By Howard Stutz, Executive Editor, CDC Gaming Reports January 5, 2021 at 7:30 pm An integrated resort casino in New York City. Las Vegas-style gambling properties in several of Texas’ major metropolitan markets. Legal sports betting in California. These aren’t predictions for 2021. But they could happen. Expansion of legal gaming is on the docket in several state legislatures, as governors and lawmakers deal with billions of dollars in budget shortfalls brought on by COVID-19. Could New York City soon be home to a resort casino? State lawmakers may be asked that question in 2021/Shutterstock Photo The meter on the pandemic’s economic toll continues to tick away. Texas is reportedly facing a budget shortage of some $4.6 billion. The figure seems relatively small compared to California’s $54 billion budget deficit and New York’s four-year budget gap, estimated at between $70 billion to $75 billion. Gaming – expanding existing legal markets or legalization in new jurisdictions – is often considered, given the potential tax dollars. According to the American Gaming Association, gaming accounted for $10.2 billion in taxes for state and local governments in 2019. That was before COVID-19 shut down the entire commercial and tribal casino industry for several months starting last March and curtailed business operations through December. The 2020 revenue and tax figures will tell a much different story. But states still view gaming as an economic instrument. Just look at the results from the election in November. Gaming referendums passed overwhelmingly in six states. Voters in Maryland, Louisiana, and South Dakota approved sports betting; Colorado approved expanded gaming options at its casinos; Virginia will be home to casinos in four cities, and Nebraska will allow its racetracks to add casinos. “Gaming is a good economic engine for communities, and expansion of the industry will be a positive for these areas,” Global Market Advisors Director of Government Affairs Brendan Bussmann said at the time. But he supplied a 2021 addendum to the comment. “The balance is making sure you don’t kill the golden goose,” Bussmann said. That notion will be put to the test around the country. For example, ultra-conservative Alabama released a 900-page study in December showing legalized gambling creating 19,000 jobs and $700 million in tax revenues. The governor, long considered a gaming adversary, didn’t dismiss the report, which will fuel a legislative debate. Sports betting legalization will continue to drive the gaming-expansion story. Six states where the activity has been approved – Washington, North Carolina, Virginia, Maryland, Louisiana, and South Dakota – should all be live in time for the fall football season once regulations and processes are adopted. Those launches would mean half of the U.S. states and Washington, D.C., will have legal sports betting following on or after May 14, the third anniversary of the Supreme Court’s landmark decision to kill the Professional and Amateur Sports Protection Act. Sports betting legislation is expected to be considered in a handful of states, notably Ohio, Georgia, and Connecticut. But the wildcard is California. Tribal gaming interests gathered enough signatures to qualify a sports betting ballot question that will go in front of voters in 2022. State lawmakers are expected to bring up their own sports betting bill, the same measure that tribes fought to kill in each of the past three legislative sessions. A compromise is required. In New York, Gov. Andrew Cuomo’s stance against mobile sports betting may be softening, but Deutsche Bank gaming analyst Carlo Santarelli said last month that a New York City destination resort casino would be a much stronger tax-revenue enhancement. Las Vegas Sands has actively sought to move up a voter-mandated 2023 timeline for when New York lawmakers can authorize an integrated resort in the nation’s most populous U.S. city. The hefty budget deficit may refuel that issue. Las Vegas Sands is also in the middle of Texas casino discussions. Gaming legalization dies a quick death every two years when state lawmakers get together. But 2021 has a different feel. Las Vegas Sands hired a slew of lobbyists for the upcoming session. Meanwhile, according to the Texas Tribune, CEO Sheldon Adelson and his wife, Miriam, donated $4.5 million to a Texas account affiliated with the Republican State Leadership Committee, the top national GOP group involved in state legislative races. “We view Texas as a worldwide destination and one of the top potential markets in the entire world,” Andy Abboud, Las Vegas Sands’ chief lobbyist said during a 30-minute talk last fall to a conference hosted by the Texas Taxpayers and Research Association. “Texas is considered the biggest plum still waiting out there in the history of hospitality and gaming.” It’s going to be an interesting year. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.