Overview of PointsBet and Legal Markets
PointsBet is a relatively young player in the daily fantasy sports and sports betting world. The Australian company was founded in 1987 as an entertainment and wagering company that specializes in online and mobile betting software. In the U.S., PointsBet emerged as an online sports betting provider in New Jersey in January 2019, before it began operating in Illinois and Indiana in March. Soon after, PointsBet expanded operations to Mississippi, Missouri, and Ohio. PointsBet currently has its U.S. headquarters in Chicago, Illinois, where it has also struck partnerships with the Chicago Cubs, the United Center (home of the Chicago Bulls and Blackhawks), and NBC Sports Chicago .
Given its recent emergence on the U.S. scene, PointsBet is not yet available in most states but is growingly becoming one of the more popular betting sites among U.S. sports bettors. But like with all legalized daily fantasy sports and sports betting sites, PointsBet is only available to residents in areas where the company is licensed to operate, which is not in all 50 states. The states where PointsBet is legally operational are an important consideration for players and punters to understand when signing up.
Current States Where PointsBet Is Legal
In 2023, PointsBet is legal and operational in several states across the United States. In these states, PointsBet fulfills all licensing and regulatory requirements implemented by state gaming commissions. Each of the current PointsBet states has legislation in place allowing for online sports betting and has opted to partner with gaming operators for connected wagering platforms.
New York: Online sportsbooks opened for business on snow 8, 2022 after New York passed its legislation on April 28, 2021. The minimum age to participate in gambling in New York is 21.
Virginia: Sports betting in Virginia became effective in January 2021. The minimum age to participate in gambling in Virginia is 21.
Iowa: Iowa’s law to legalize sports betting passed in May 2019. The minimum age to participate in gambling in Iowa is 21.
Kansas: Sports betting in Kansas started in September 2022 after legalization legislation was passed on March 31, 2022. The minimum age to participate in gambling in Kansas is 21.
Arizona: Arizona legalized sports betting in April 2021. Sports betting began in Arizona in September 2021. The minimum age to participate in gambling in Arizona is 21.
Louisiana: Louisiana’s law to legalize sports betting passed in June 2021. Sports betting started in Louisiana in October 2021. The minimum age to participate in gambling in Louisiana is 21.
West Virginia: West Virginia’s law to legalize sports betting passed in March 2018. Sports betting started in West Virginia in December 2018. The minimum age to participate in gambling in West Virginia is 21.
Tennessee: Tennessee’s law to legalize sports betting passed in April 202 Betting started in Tennessee in November 2020. The minimum age to participate in gambling in Tennessee is 21.
Wyoming: Wyoming’s law to legalize sports betting passed in April 2021. Sports betting started in Wyoming in September 2021. The minimum age to participate in gambling in Wyoming is 18.
Illinois: Illinois’s law to legalize sports betting passed in June 2019. Sports betting started in Illinois in March 2020. The minimum age to participate in gambling in Illinois is 21.
Mississippi: Mississippi’s law to legalize sports betting passed in June 2018. Sports betting started in Mississippi in August 2018. The minimum age to participate in gambling in Mississippi is 21.
Colorado: Colorado’s law to legalize sports betting passed in May 2019. Sports betting started in Colorado in May 2020. The minimum age to participate in gambling in Colorado is 21.
Michigan: Michigan’s law to legalize sports betting passed in December 2019. Sports betting started in Michigan in January 2021. The minimum age to participate in gambling in Michigan is 21.
How the State Laws Are Made
PointsBet enters markets strictly in compliance with the laws those states implement. Each state has a gambling commission that issues regulations pursuant to which citizens legally place wagers with operators like PointsBet. Most of the states where PointsBet operates do so under the auspices of the United States Supreme Court decision Murphy v. National Collegiate Athletic Association, 138 S.Ct. 1461, 200 L.Ed.2d 854 (2018). In that ruling, the Supreme Court concluded that provisions of the Professional and Amateur Sports Protection Act unconstitutionally discriminated against specific states. The decision gave states the authority to authorize or prohibit gambling. In response, many states have passed lawful legislation in accordance with the decision. In doing so, the legislatures have assigned regulatory oversight to government commissions to monitor and administer the entire regulatory process. These commissions issue licenses, enforce state and local rules and regulations, and cooperate with law enforcement agencies throughout the state to prevent and prosecute illegal gambling activity. Legislative initiatives continue to proliferate across the United States. There have been instances where sports betting hits the legislative floor, but fails to muster support and dies a quick death. For example, the state of Maine watched as legislators debated sports betting in 2019, only to come to no agreement before the legislative session ended. Legislators are expected to take up the issue again in the next legislative session. Legislators from both parties have shown interest in the issuance of sports betting licenses. The overall appetite for the expansion of legalized gambling appears to be increasing.
How PointsBet Decides Which States to Operate In
PointsBet considers a multitude of factors when determining which states to enter the sports betting market. Like a number of the new platforms, PointsBet looks to enter markets that brand well. This means that PointsBet wants to enter a market where its potential revenues are maximized and competition is minimal.
One major factor of interest to PointsBet is the size of the market. Sports betting companies look closely at the population of a state, particularly the amount of disposable income per resident of a state. The more disposable income in an area, the more popular the prediction that punters will be in a position to spend money on points betting. The size of the market refers to how many potential punters there are in a state and how much money they will likely spend on sports betting.
Another factor that PointsBet looks at is the regulatory environment of a state. PointsBet arrives at this from two perspectives. The first is the practicality of launching in a new jurisdiction. For example, a state with extremely complicated tax and regulatory requirements will demand more resources and time that might not translate to a large enough market for PointsBet to justify the time and effort . The second perspective PointsBet considers is regulatory environment vis-à-vis its competitors. If all other things are equal, PointsBet will choose an easier environment over one that is more difficult. This works both ways.
Further, the company closely considers the history surrounding sports betting in a state. A state that has had sports betting historically is generally a place that will receive first consideration when a new company like PointsBet is running its analysis. This is particularly true if the state has some history of sports betting itself. The company also will assess the political situation in a state. The politics of an area may tilt one way or another which may impact how a company like PointsBet approaches a state.
PointsBet also examines the availability of other sports betting options in a state compared with a host of other considerations. For example, PointsBet will often seek to enter a state where its competitors have not. If PointsBet can be the only show in town, it may have the ability to establish itself as the front-runner in the state.
Future Expansion of PointsBet across the U.S
While operating in the largest North American markets of New Jersey and Pennsylvania offer a strong foundation, such a limited regional scope cannot ensure long-term success. Expanding into additional states is crucial to the PointsBet business model, and its methods of doing so show that a strong strategy is already in place. First and foremost, PointsBet has been proactive at courting legislators in areas that have yet to legalize sports betting. Not only has it partnered with the Chicago Bears for a sports betting lounge at Soldier Field, but it has put out feelers for potential legislation on the expanded state level. Tennessee, for example, which recently became the first state to legalize online-only sports betting, has also seen its Senate and House Committee on State Government sponsor relatively similar legislative proposals for 2021. Following the successful passage of the 2018 federal law on sports betting in Murphy v. NCAA that gave states the right to legalize and regulate sports wagering, such a land grab is not highly unusual to expect. Both of the proposed bills called for formal regulations through the establishment of a Division of Sports Wagering (as well as a regulatory commission) and for the eventual tax revenues to be distributed to both the Tennessee Lottery and a new agency in charge of regulating gambling programs in the state. For PointsBet, the challenge will be to secure licensing, which will be contingent on demonstrating financial responsibility and the ability to meet certain consumer protection standards, including responsible gaming and data security measures. But it does not stop there: similarly, PointsBet boasts sponsorship deals with the Detroit Pistons and media partnerships with media giants NBC Sports and The Ringer to promote its betting products… and these efforts will likely pay off dividends in the coming months. In addition to open legislative efforts and increased marketing, PointsBet has yet to take on any other full-fledged partnerships with professional teams. For the sake of comparison, in the years following the original Supreme Court decision on sports betting, Ohio has been the site of six different sports-betting-themed deals. The Cleveland Browns reached a sports betting lounge deal with BetMGM, while the Cincinnati Bengals have done the same with Caesars. This year, the Cincinnati Reds signed a multi-year deal to make BetMGM their official sports-betting partner, while the Columbus Blue Jackets, Cleveland Cavaliers, and Atlanta Hawks have opted for deals with Caesars, BetMGM, and FanDuel Sportsbook, respectively. It is worth noting that PointsBet also signed a deal with the Denver Nuggets earlier this year. With active efforts in other states beyond their two anchor markets, along with down payments in the form of sponsorship deals, strong partnerships with media organizations, and a well-staffed legal and government affairs division, PointsBet is looking well positioned for near-future growth.
Analyzing What It Means for Bettors and the Economy
PointsBet is an online, mobile and retail gaming platform. While it may not have a direct impact on the local economy in the traditional sense, its entry into a new market certainly does. The creation of a regulated online sports betting platform provides local bettors the ability to register remotely and place wagers from anywhere in that state. For example, one could be an Indiana resident and drive to Illinois to go to the casino to place a wager. Or, one could be an Indiana resident and place that same wager the tick of a few buttons, all while in the comfort of their own home. From a purely economic perspective, PointsBet is big business. While they don’t publicly disclose the number of jobs created in each state, they likely employ a local staff to handle customer service, underage gambling and responsible gaming corroboration via telephone and the internet. Staff is likely based in the area or in some cases certain services may be outsourced to third parties, but the net impact is still more jobs for the community. From a fiscal perspective , regulated sports betting suggests a corresponding increase in taxation. Legalization in a new market generally falls into two categories: land-based operators and online/mobile operators. The land-based operators are taxed based on gross gaming revenue. The online/mobile operators are taxed by the state based on what is a sliding scale ranging from 10% to 20% (or more) of a state’s adjusted gaming revenue. These rates also vary from state to state. In states where there is only one operator (such as in Washington D.C.), unless that operator is paying the minimum (which is likely a government-affiliated entity), it is paying 20% or more of its profits to the state. While there is no available data on the net state impact, based on just the D.C. example, we can reasonably estimate that just one sports betting operator is providing at least $1M annually to the District’s coffers. The annual impact in Indiana, Illinois and other states should be considerably higher than this, considering each one has at least a dozen (and expect more) online/mobile sportsbooks.