Two analysts believe the gaming industry could see a clean sweep in six states where ballot referendums covering sports betting legalization and casino expansion are in the hands of voters Tuesday.
However, Nebraska, which has a trifecta of casino gaming issues covering the racetrack industry, is the only state where passage is considered a toss-up.
Truist Securities gaming analyst Barry Jonas and Global Markets Advisors Director of Government Affairs Brendan Bussmann discussed the gaming ballot landscape with investors last month, just as early and mail voting was getting underway in much of the U.S.
In a research note covering the ballot question, Jonas said sports betting expansion into Maryland, Louisiana, and South Dakota seems certain to pass, as does the legalization of four casinos in four Virginia communities. A Colorado measure would allow the state’s three casino communities to expand certain offerings and remove a limit on single wagers.
Nebraska’s three initiatives – 429, 430, and 431 – would amend the state’s constitution to allow casino games – defined as “games of chance” – at licensed racetracks, create a gaming regulatory agency, and authorize a 20% gaming tax on new casinos’ revenues. Bussmann said the definition of “games of chance” could mean the racetracks will be allowed to add sports betting as part of their offerings.
Nebraska Gov. Pete Ricketts opposes passage of the measures, as does billionaire Warren Buffet, who is from Omaha.
Bussmann believes the measures will be narrowly approved by voters, but that “complex issues should not be handled through the initiative process.” Current polling is mixed. He called the referendums “the most flawed policy proposals ever put forward. It’s generally more efficient to take up the issue within the legislature.”
Jonas said Caesars Entertainment and Penn National Gaming, which draw customers just across the Missouri River from Omaha to their casinos in Council Bluffs, Iowa, could lose business if the referendums are approved.
Barry Jonas, Truist Securities
Only South Dakota’s sports betting referendum could also be a close call, according to Bussmann and Jonas. Support for the measure got a late start due to COVID-19 issues. Plus, the state’s casinos in Deadwood were closed due to the pandemic. Bussmann said the South Dakota issue will have the closest race of the sports betting referendums.
With Tennessee’s sports betting launch on Sunday, there are now 19 states and Washington, D.C., with legal and regulated sports betting. Three more states – North Carolina, Washington, and Virginia – have legalized the activity and are expected to launch next year.
Meanwhile, if South Dakota, Maryland, and Louisiana pass the sports betting referendums, half the U.S. states will have approved legalization of sports betting in less than three years since the Supreme Court’s landmark ruling in favor of the activity.
In addition to the Nebraska issue, here are gaming votes of interest for election day:
Louisiana – sports betting
The vote is parish by parish and Jonas and Bussmann said they will be watching to see if more than 47 parishes – the number that approved daily fantasy sports two years ago – vote in favor.
“The second challenge will be how fast the state legislature can work to set rules for taxing, licensing, and regulation in 2021,” Jonas said.
Maryland – sports betting
State lawmakers put the issue in front of voters when COVID-19 forced a government shutdown. The issue is basically an advisory question. FanDuel and DraftKings are financially backing the measure, which would also benefit MGM Resorts International, Caesars Entertainment, and Penn National Gaming.
Brendan Bussmann, Global Market Advisors
“The challenge for voters is that it does not spell out enough and leaves much of the issue up to the legislature,” Jonas said.
Bussmann said the measure was “flawed from a policy perspective,” but the legislature views the ballot question as the best way for Maryland to add the activity since the state “is now surrounded by sports betting jurisdictions.”
South Dakota – sports betting
The measure is backed by the Deadwood Gaming Association and would allow the city’s casinos – the only gaming market in the state – to add retail sports betting locations. Analysts expect South Dakota lawmakers will eventually add mobile sports wagering.
Virginia – new casinos
Voters in four Virginia cities have up-or-down ballot questions over a single casino being built in each community. All four cities have lined up casino operating partners: Bristol with Hard Rock International, Danville with Caesars, Portsmouth with Rush Street Gaming, and Norfolk with the Pamunkey Indian Tribe.
Both Jonas and Bussmann expect voters in all four cities to approve the measures.
“Norfolk may be an interesting conundrum out of the four cities, as the Pamunkey Tribe has taken a laissez-faire attitude of assumption until recent weeks,” Jonas wrote.
The city of Richmond, Virginia, was also approved by state lawmakers, though the city has yet to select an operating partner, which has delayed the process.
Colorado – gaming expansion
If approved, Amendment 77 would allow casinos in Central City, Black Hawk, and Cripple Creek to remove wagering limits ($100 on a single wager) and to offer other game types, such as roulette and craps.
Bussmann said he believes the initiative will pass, which will allow “these Rocky Mountain locations to see growth after removing the existing limits that have only hindered the marketplace.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
