2021 is a crucial year for sports betting sites like DraftKings and FanDuel.
Nineteen states will decide whether to legalize sports betting this year, either through an electoral referendum or the statute of the state legislature. If all states vote yes, it will more than double the number of states that have legalized – making 2021 a crucial year for the financial prospects of industry leaders.
“This is a great year,” said DraftKings CEO Jason Robins in an interview. “We have about 20 states set to vote on legalization. What percentage of those do decide – it will change things in a positive or negative direction for us.”
Investors are planning many approvals, leading to an increase in the value of DraftKings and Flutter, which owns FanDuel. States can tax legalized sports betting and generate revenue from what has historically been an illegal activity.
“It is difficult to say which states will vote for legalization and which will not,” said Robins. Still, some seem more likely than others. Massachusetts and New York have been working on legalizing sports betting for several years. Maryland and Wyoming passed bills on mobile devices in their state homes this week and are now awaiting Senate approval.
Other states, such as Kentucky, may have a better chance in 2022, when the state legislature meets for more than 30 days. California – the biggest sports betting prize – is also likely to wait until next year, when Senator Bill Dodd promised to put a measure to the 2022 vote.
State Referendum or Legislature
States have two avenues for legalization – a statewide referendum, which normally takes place as a vote in November, or a law passed by the state legislature. Most of the 19 states will not have to put a vote to legalize, said FanDuel CEO Matt King.
Of the states that are due to decide this year, Texas and New York are the most important, said Robins. Either would become the largest state to be legalized by esteemed users. Illinois became DraftKings’ biggest revenue generator in 2020 after the state changed its laws during the pandemic, allowing people to register online instead of at a personal casino. It is not clear whether Illinois will continue to extend the mobile registry after the majority of its citizens are vaccinated against the coronavirus.
The biggest determining factor for legalization may be a state’s desperation for additional tax revenue, King said.
Still, King said that while 2021 is definitely a seminal year in the gambling industry, he cautioned that bills usually take three years to pass from the time they are presented.
“I spoke to many public relations officials and they say that in the first year, a bill may or may not come out,” said King. “Year two, the same people who sponsored the bill try again. And in year three, it passes. So, if some of these states do not pass in 2021, there is at least a greater chance that a project will pass the following year. “
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