MS, MI take action against sweeps, illegal online casino

Welcome to iGB’s State of the Union, your premier source for the latest developments in North American sports betting. This week, we dive into significant regulatory updates, industry insights, and market trends shaping the gambling landscape.

Mississippi Senate Passes Landmark Digital Sweepstakes Ban

On February 11, Mississippi marked a pivotal moment in gambling legislation as its state senate overwhelmingly approved Bill SB 2510, with a vote tally of 44-1. This groundbreaking legislation positions Mississippi as the first state to outright prohibit online sweepstakes and digital casino-style games. Under this bill, operators face severe penalties of up to $100,000 (£79,000/€95,000) for each violation, alongside potential prison sentences of up to a decade, effectively elevating these infractions from misdemeanors to felonies.

The legislation not only targets online sweepstakes but also bans digital racebooks and online sports pools. While Mississippi retains legal brick-and-mortar casinos and sportsbooks, it has yet to legalize any form of digital gambling, including online casinos.

Earlier this legislative session, House Bill 1302, aimed at establishing statewide digital sports betting, successfully passed the House and awaits further review by the Senate. However, another sports betting proposal recently succumbed in the committee, indicating ongoing complexities in Mississippi’s gambling evolution.

Michigan Cracks Down on Illegal Online Casinos

In a decisive move on February 12, the Michigan Gaming Control Board (MGCB) issued cease-and-desist orders to nine online casino operators identified as illegally operating within state lines. This includes notorious platforms such as BetAnySports and CoolCat Casino, among others.

The cease-and-desist letters highlight violations of three specific state laws, granting these unlicensed operators just 14 days to cease their operations in Michigan. Failure to comply will lead MGCB to collaborate with the Attorney General’s office to instigate further legal actions.

Historically, the MGCB has effectively utilized cease-and-desist orders to eliminate illegal sportsbooks, reinforcing its position as a proactive authority in safeguarding Michigan’s gambling landscape.

South Dakota Advances Digital Sports Betting Legislation

On February 13, South Dakota’s Senate Commerce and Energy Committee voted unanimously (8-0) to advance a significant digital sports betting bill. This legislation follows the state’s legalization of retail sports betting in September 2021 and proposes statewide digital betting, contingent on server locations in Deadwood. Notably, the bill earmarks a substantial 90% of state tax revenue for property tax relief, although a specific tax rate remains unaddressed in SJR 507.

Google Implements Major Changes to Gambling Advertising Policies

On February 10, Google announced a significant shift in its advertising guidelines, which will restrict aggregators and affiliates from promoting social casino games starting in April. This update emphasizes that only licensed entities can advertise legal gambling, necessitating compliance with rigorous certifications. Non-compliance could lead to restrictions on advertising capabilities.

Google classifies social casinos as “simulated gambling-style games without any real opportunity to win material value.” Certified entities in the United States will be permitted to advertise legal horse racing, lotteries, online casinos, and sports betting; however, all advertisements must include warnings about the risks of gambling addiction, and marketing initiatives must not target those under 21 years of age.

The revisions reflect a growing recognition of responsible gambling practices, as evidenced by Google’s assertion that there are currently 55 legal gambling jurisdictions worldwide, with differentiated advertising rules for each.

Resurgence of GRIT Act Initiative in U.S. Congress

In a timely reintroduction, Connecticut Senator Richard Blumenthal and Oregon Representative Andrea Salinas have brought back the GRIT Act, ahead of the Super Bowl on February 9. If passed, this federal legislation would allocate a portion of federal gambling excise tax revenues towards establishing a national framework prioritizing problem and responsible gambling.

The proposed act mandates that the Secretary of Health and Human Services submit a performance report after three years, evaluating its effectiveness. Notably, the legislation aims to distribute 75% of federal gambling tax revenues to state programs focused on responsible gambling, with 25% directed toward research initiatives through the National Institute of Drug Abuse.

Baby Boomers Driving Growth in Betting Participation

TransUnion’s annual “U.S. Betting Report,” released on February 10, reveals intriguing demographics regarding betting participation. It highlights a notable uptick in bettors among Baby Boomers and Generation X, contrasting with a 5% decline in Millennial participation. According to the report, 25% of respondents engaged in betting during Q4 2024, indicating a slight increase from 24% in Q4 2023.

Although overall betting participation appears robust, there is a recorded decrease in the frequency of high-stakes bettors, with those wagering over $500 per month showing volatility in financial behavior. While the industry’s expansion presents opportunities, TransUnion underscores the persistent concern regarding problem gambling, emphasizing the need for proactive measures.

Launch of the National Association Against iGaming

On February 11, the National Association Against iGaming (NAAiG) announced its inception alongside an Innovation Group study questioning the lucrative myths surrounding iGaming. The study reveals that states often experience an average 16% decline in land-based casino revenues following the introduction of online gaming. Additionally, it points out correlations between iGaming and local job losses as well as a marked decrease in economic output.

While NAAiG’s press release refrains from disclosing its membership details, notable figures from Churchill Downs Inc, The Cordish Companies, and Monarch Casino are quoted, all of whom have expressed concerns regarding iGaming’s impact on local economies. Shannon McCracken of CDI stated, “iGaming is eroding our communities… We must act now to protect our local economies.”

NorthStar Gaming Reports Q4 Growth in Canada

On February 11, NorthStar Gaming unveiled preliminary results for the fourth quarter, indicating a remarkable 42% surge in handle compared to Q4 2023, alongside a 31.6% increase in gross gaming revenue (GGR). Furthermore, projections for the full year anticipate a 51% growth in both handle and GGR compared to 2023, bolstered by a $30 million financing acquisition aimed at driving profitability. CEO Michael Moskowitz emphasized confidence in their trajectory towards profitability based on the current operational strategies, with audited results forthcoming in late April.

Georgians Favor Legal Sports Betting, Poll Reveals

A recent survey conducted by the University of Georgia School of Public Affairs reveals that a resounding 63% of Georgian voters support legalizing sports betting. This figure rises dramatically to 79.8% if potential revenue from wagering is allocated to state educational programs such as HOPE and pre-K initiatives. Notably, 77.9% of respondents believe that the decision to legalize should rest with voters.

Despite ongoing efforts over the past five years to bring legal sports betting to Georgia, legislative challenges have thwarted progress. While no bills are currently filed for this session, several lawmakers are poised to reintroduce the topic in upcoming discussions.

Featured Article of Interest

Last week, Ippei Mizuhara, the former interpreter for Shohei Ohtani, was sentenced to 57 months in prison for embezzling funds to facilitate illegal gambling. Forbes journalist Matt Rybaltowski offers an in-depth analysis of Mizuhara’s journey and explores prominent wagering scandals that have surfaced across the United States. Read the full article here.

https://twitter.com/MattRybaltowski/status/1887634709225578984