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 the electoral referendum or the statute of the state legislature. If all states voted yes, this would double the number of states that have been legalized, making 2021 a pivotal year for the financial prospects of industry leaders.
“This is a great year,” Jason Robins, CEO of DraftKings, said in an interview. “We have about 20 states to vote on legalization. What percentage of those decide they do? That will make things go positive or negative.”
Investors are planning a lot of approvals, causing an increase in value for DraftKings and Flutter, owner of FanDuel. States can tax legalized sports betting and generate revenue from what has historically been an illegal activity.
“It’s hard to say which states will vote to legalize and which won’t,” Robins said. Still, some seem more likely than others. Massachusetts and New York have been working for several years on legalizing sports betting. Maryland and Wyoming have passed mobile law laws in their state homes this week and are now awaiting Senate approval.
Other states, such as Kentucky, may have more chances in 2022, when the state legislature meets for more than 30 days. California, the biggest sports betting prize, will also wait until next year, when state Sen. Bill Dodd has promised to put a measure on the 2022 vote.
Referendum or state legislature
States have two paths to legalization: a state referendum, which is usually done as a November vote or a law passed by the state legislature. Most 19 states will not have to put measures in the polls to legalize themselves, said Matt King, CEO of FanDuel.
Of the states that will decide this year, Texas and New York are the most important, Robins said. Either would become the largest state legalizing loved ones. Illinois became DraftKings ’largest revenue generator in 2020 after the state changed its laws during the pandemic, allowing people to register online instead of a face-to-face casino. It is unclear whether Illinois will continue to expand the mobile registry once most of its citizens are vaccinated against coronavirus.
The main determining factor for legalization may be a state’s desperation to earn additional tax revenue, King said.
Still, King said that while 2021 would definitely be a pivotal year in the sports gaming industry, he warned that bills usually take three years to pass since they are filed.
“I’ve talked to a lot of government affairs officials and they say that in the first year, a bill may or may not come out,” King said. “In the second year, the same people who sponsored the bill try it again. And the third year, it happens. So if some of those states don’t approve it in 2021, there will be at least a greater probability that pass a bill the following year. “
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