Did you know that it has been nearly two years since the Supreme Court cleared the way for state legalization of sports betting? Since this time 13 of the 50 states in the United States have taken advantage. That’s right, you can now legally bet on sports in 13 of the 50 American states. By the end of 2020, it is likely that this number will increase. It may even double. You’d think that if you owned a casino, you’d want to get a sports betting license and start offering sports betting right away. This would only increase your overall revenue right? Sure, it would, but the thing is sports betting licenses are essentially automatically guaranteed to in-state gambling outlets. While this is a good thing for existing casinos, it could be a bad state policy.
Creating A Monopoly
At first glance, it probably seems like a good idea to issue a casino a sports betting license without thinking twice. They are already a legally operating betting business, so why not just give them a license? Well, what if you gave the airline companies the right to own the roads and railroads? They would virtually be a monopoly. They would own everything transportation-related. And, that is exactly what is going to happen in the gaming industry. While this would be a good thing for the current casinos, it would be a bad thing for the economy and new business owners. Current casinos would become a monopoly.
There Would Be No Competition
When current casinos become a monopoly, it leaves no room for outside competition. Competition is always a good thing, especially in a country where the economy is lacking. States need new businesses and if it is harder for businesses to acquire betting licenses it is only going to deter individuals from opening new businesses. New businesses in certain areas not only means more revenue for the state, but it means more jobs. This is something that everyone could benefit from right now. Whether it is the baccarat online industry or the sports betting world, America needs health competition right now.
More Complicated Than Anticipated
It is not only illogical for the state to give casinos and racetrack owners control of the sportsbook scene, but it is simply bad state policy. And, this is because owning and running a betting parlor is much more complicated and expensive than operating slot machines and blackjack tables. Sportsbook margins are razor-thin and because of this, the house would only have a small edge. You combine this with the fixed and variable costs and most casinos are going to end up outsourcing their operations to companies that specialize in providing betting services.
Consolidation
Consolidation would be another major problem. With more and more mergers in the casino and racetrack industries, there are only going to be fewer local enterprises with the power to sell third-party licenses. This pretty much means that providers could pick and choose who they issue a license to. You might end up with a situation where the state continual issues license to the same individuals.
