NFL kicks off big-time today...and so does sports betting in the Midwest

As the NFL season kicks off full-force today, many states are having their first full season of legalized sports betting. This includes the Midwest, where Iowa and Indiana have already opened up the betting windows at some of their casinos, with Illinois soon to follow.

So what about Wisconsin? Barry Adams of the Wisconsin State Journal does a deep dive into the subject today, and it doesn't seem like anything would happen soon in this state. It would require either:

1. A change in the state constitution, which requires a bill that passes two houses of the Legislature and then is approved by voters in a statewide election. Or;
2. A change with the state's compacts with various Indian tribes regarding gambling that already exists.

Adams notes that the gaming compacts with the tribes aren't likely to change any time soon, but sports betting could become a negotiating tool in regards to how much the tribes give to the state.

No efforts have been made by the tribes to offer sports betting. But if the state were to allow sports gambling at non-tribal nation entities, it could also bring to an end payments to the state from the tribes that in fiscal year 2017-18 amounted to $53 million for the right to exclusively offer gaming, the [Legislative] Reference Bureau reported.

On the flip side, would allowing sports betting at Indian casinos be linked to the tribes sending more money to the state? It's an interesting sidelight.

But what about the Legislature? Adams' article quotes prior comments from Assembly Speaker Robin Vos and now-Wisconsin Revenue Secretary Peter Barca being open to the idea, if noncommittal. And he gets one current legislator of the majority party on the record saying we should have sports betting in Wisconsin.

Rep. Tyler Vorpagel, R-Plymouth, believes it’s time to bring sports gambling into the fold in Wisconsin, which legalized its lottery in 1988. Vorpagel told the State Journal last week that he is in favor of sports gambling and is researching the possibility. He does not have a time frame as to when legislation would be introduced.

"I'm all for it. I don’t see a problem with it,” Vorpagel said. “I would much rather keep that revenue in the state.”

Coming to America's Dairyland any time soon?

However, how much revenue are we talking about? Adams notes that even in Nevada, there isn't all that much money that directly flows into government from the sports books, and the states that recently legalized sports betting aren't getting what they thought they would.

But the addition of sports gambling may not be a panacea of tax revenue. In Nevada, for example, just $20 million in tax revenue was raised in 2018 from $300 million in revenue (the "win total" of the casino) generated from $5 billion in bets, the Reference Bureau report stated. Mississippi and Pennsylvania have brought in half of what they expected, while Rhode Island and West Virginia have brought in even less, according to the report.

So far, I have not seen Vorpagel or any other legislator formally introduce a bill that would legalize sports betting in the state, and likewise, there has not been a public hearing on the various details that would go into legalizing it. I'd like to see a report that quantifies how much sports betting would raise for the state, and how much of the casino win and/or casino's revenues would have to be sent to the state.

As part of that report, I'd also be interested in seeing what other spending is expected to be induced as a result of the sports books, which would likely fall in tourism-related items such as lodging and food and drink. The related spending is what Vegas counts on, and the jobs that come as a result of that is likely a larger impact on the state's economy than having the betting itself - even if the betting is why people might go there.

Likewise, would there be a "displacement" concern where other state businesses might lose revenue because people choose to hit the sports books instead? And does the fact that other Midwestern states also are getting sports betting water down how much extra business Wisconsin might get if they allowed sports betting, because why would tourists go here for sports betting if they can do so in their own state?

Back to the present, the article focuses in on the new sports betting facilities in Dubuque, Iowa, located right across the river from Wisconsin (you could go and lay money down on games today if you want!) Adams presents an argument from a Dubuque legislator where she claims legalizing sports betting merely puts it above ground.

Iowa taxes sports gaming revenues at its 19 casinos at 6.75%. Iowa state Sen. Pam Jochum, D-Dubuque, was instrumental in pushing to change state law to allow sports betting, which took affect Aug. 15. Her district includes both the Diamond Jo and Q Casino, which is also in Dubuque and adjacent to the Iowa Greyhound Park.

“What we were finding is that an awful lot of people have been doing (illegal) sports betting and fantasy sports betting online for sometime with very little regulation,” Jochum said. “So we decided that it would be better to actually regulate it through the Iowa Gaming Association to actually provide some regulations and safeguards.

So plenty to unpack here, and I'm not counting on seeing Wisconsin get formal sports books any time soon. That might not be a bad thing, because the newly legal industries in Iowa, Illinois and Indiana will give us a good indication as to how much money comes into the state from sports betting, and how should those books operate and be overseen.

And it'll let us know whether it does anything at all for economies in our part of the country, which can guide us as to whether we'd want to deal with it at all, or let other states deal with it.