The Expanding U.S. Sports Betting Market and the Challenges for Regulators
The repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018 set off a wave of growth in the U.S. sports betting industry. But it also revealed a significant gap in regulators’ preparedness to handle this rapid expansion. During a recent webinar, “State of Gaming Licensing: What’s Changed Since PASPA and What’s Next?”, experts discussed the overwhelming challenges that regulatory bodies have faced since PASPA’s repeal.
Unprepared for Rapid Growth
David Rebuck, former Director of the New Jersey Division of Gaming Enforcement, shared his insights on the issue. He noted that the pace of expansion left regulators struggling to keep up. “We were not prepared for that as a country,” he said, referring to the “tsunami wave of expansion” in sports wagering. Despite the rapid growth being widely anticipated, the demand placed on regulators was unexpected.
As states scrambled to catch up, many implemented temporary transactional waivers. These allowed operators to enter the market while waiting for full licensing reviews. In New Jersey, this approach has worked well over time, giving regulators and operators flexibility to manage the changes.
Legal and Regulatory Hurdles
Dan Hartman, former Director of the Colorado Division of Gaming, highlighted the challenges that stemmed from lawmakers’ decisions. He emphasized the need for strong relationships with legislators to ease regulatory changes. The COVID-19 pandemic complicated matters further, pushing regulators to embrace digital and remote methods. These new approaches helped them handle operations more efficiently.
Rebuck also pointed out that traditional regulatory methods, such as physical inspections, were no longer practical. To keep pace, regulators need to reform outdated procedures and adopt technology-driven solutions.
U.S. Gambling Revenue Breaks Records in 2024
Despite these challenges, the U.S. commercial gambling sector reached new heights in 2024. According to the American Gaming Association (AGA), commercial gaming revenues hit $72 billion—a 7.5% increase from 2023. This surge was driven by mobile sports betting and iGaming, with 28 out of 38 states reporting record-breaking revenues.
The rise in mobile sports betting helped generate $15.9 billion in tax revenue, an 8.5% increase from the previous year. States like North Carolina and Vermont also made significant strides by introducing mobile sports betting, leading to their first-ever commercial gaming revenues.
The AGA’s “State of the States Report” emphasized that iGaming and mobile sports betting will continue to drive growth in the gaming industry. Industry leaders remain optimistic, with many casino executives expecting revenue growth to accelerate over the next year.
The Future of Gaming Regulation: Tech Integration and AI
Looking ahead, technology will play an even larger role in gaming regulation. Both Rebuck and Hartman discussed the growing influence of artificial intelligence (AI) in streamlining licensing and monitoring compliance. AI could help regulators process applications more efficiently, detect fraudulent behavior, and manage large datasets.
However, as technology evolves, regulators must balance innovation with player protection. Ensuring that new technologies do not compromise fairness and integrity will remain a priority for the industry.
