(Photo Credit: Richard F. Ebert)
Indiana has become the 10th state to legalize sports gambling.
On Wednesday, Governor Eric Holcomb signed the bill paving the way for unprecedented changes to the state’s current gambling landscape. The bill passed the state Senate and would have gone into effect anyway, but Holcomb signed to put his stamp of approval on the changes.
So, what does this really mean?
There are two main components to the bill that are most influential to sports fans.
- Sports gambling will be in effect soon, before the end of the year.
- Sports gambling will also be available on mobile devices.
This second point is crucially important, as early versions of the bill limited gambling to casinos. The state House did not vote in favor of mobile gambling and took it out of the proposals. However, despite the House of Cards-style drama of politics, the state Senate eventually was able to reinsert the mobile gambling component.
Mobile gambling is a big win for both gamblers and the state. Firstly, mobile gambling is obviously more convenient for Indiana gamblers, who will not have to travel to a casino to place a bet. Likewise, the mobile gambling provision is also going to substantially benefit the state. In New Jersey, approximately 80% of all sports gambling is done online.
Thus, if this provision was not included in the bill, Indiana would have lost out on a major potential revenue stream. In total, the AP projects that sports gambling could bring in around $12 million per year for the state.
Gov. Holcomb noted, “Gambling is a highly regulated industry that once had little competition, but now does from surrounding states and new technology. By modernizing our laws, this legislation will spur positive economic growth for our state and for an industry that employs over 11,000 Hoosiers.
Additionally, it will bring in new revenue and create hundreds of new jobs – both permanent and construction. I will direct the Indiana Gaming Commission to monitor for potential effects of this bill so that we can make necessary changes in future legislative sessions.”
The Indiana Gaming Commission will begin to accept sports betting applications on July 1, 2019. Some state Senators who supported the bill have stated their hopes for sports gambling to be available at the beginning of fall; however, others believe this timeline might be a little too aggressive. Thus, these changes may not be in effect for the start of the college football season but very well could be up and running for the start of college basketball.
Sometime in September is reportedly the target.
The bill also includes approval for the construction of a few new casinos. The proposed sites for the new casinos are Terre Haute and Indianapolis along I-80-94. Similarly, two horse track casinos with table games have reportedly also been approved.
Sports betting operators will have to pay $100,000 as an application fee, with their vendors paying $10,000. In order to renew this license each year, casinos will have to pay a $50,000 license fee. Sports wagering revenue will be taxed at a 9.5% rate, which is considered relatively “industry-friendly.” Under the bill, casinos can contract with up to three brands for online betting. Revenues collected will go into the state’s “general fund.”
Effect on College Sports
The bill doesn’t appear to include any prohibitions on where college games are played. For example, in Illinois, legislators are considering preventing gambling on college events that take place within the state’s boundaries. In other words, if Northwestern was playing in Ann Arbor, Illinois citizens could bet on the game but, if the event took place in Evanston, residents could not bet on the event.
This idea is meant to soothe university administrators concerned about point shaving and other potential effects. New Jersey, Delaware, and Rhode Island have similar provisions. Indiana’s bill does not appear to have these restrictions.
While point shaving is certainly a concern, it is a rare occurrence. According to a 2006 study, economist Justin Wolfers examined over 44,000 college basketball games over 16 years and found that the strong favorites “failed to cover the point spread more often than could be attributed to chance.” He concluded around 1% of all games involved gambling related corruption.
However, many challenge these findings. The question largely revolves around the definition of “attributed to chance.” Many point to other factors that the study may have overlooked, such as a coach who milks the clock or doesn’t run up the score on an opponent. There is also the possibility the sports book could have posted artificially large point spreads in hopes of increasing business.
Either way, this issue is likely not going away anytime soon. Many schools located in states where gambling is legal have begun to implement anti-point shaving and gambling awareness training seminars for incoming student-athletes.
It’s also worth noting that the NCAA recently announced last week that it will rescind its ban that prevented championship competitions from being held in the states that allow legalized sports gambling. This ruling likely was a major contributor to Indiana fully committing to sports gambling. Now, Indiana doesn’t have to worry about losing the Final Four or conference championship football and basketball games.