States of Sports Betting, Part 2: Can VA Avoid The Mistakes Of Other States?

Virginia is likely just a few weeks away from the launch of its online sports betting market. Ahead of that debut, Play Virginia spoke to writers from our network who cover sports betting in other states. We wanted to understand what those states are doing right, what they’re doing wrong, and how Virginia’s regulators and first sportsbook operators could learn from their successes and failures.

Today is the second installment of our three-part “States of Sports Betting” series. In the first, we look at other states’ successes. In today’s follow-up installment, we look at some of the mistakes that Illinois, Michigan, West Virginia, Nevada, and other states have made in their sports-betting efforts.

Can Virginia avoid these missteps?

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Sports betting has become a big business in this country. The US Supreme Court freed the burgeoning market when it struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018.

Since then, a growing number of US states have opened sports betting markets. Customers have already legally wagered nearly $33 billion at these legal and regulated sportsbooks.

However, state-approved sports betting hasn’t been the guaranteed road to riches that some lawmakers envisioned. Whether it’s a noncompetitive market, limited betting options, tech issues, or even poor communication, states have struggled with various aspects of the venture. And customers haven’t always been understanding.

For the most part, though, our writers say their local sports betting markets are off to a promising start. In fact, some writers struggled to come up with a single negative aspect.

Other writers, though, struggled for an entirely different reason.

“It’s hard to pick just one!” Joe Boozell of PlayIllinois joked.

For Virginia to emerge as one of those market leaders, here are some of those blunders to avoid.

Top-heavy marketplace

On the face of it, Virginia appears poised for a big and competitive market. After all, the Virginia Lottery, which now oversees sports betting in the commonwealth, will grant at least four licenses and up to 12, as lawmakers required.

In locales with a limited market (lookin’ at you, Washington, DC), customers often suffer due to few choices, poor odds, and limited promotions.

However, even in states with a bevy of operators, not all sportsbooks are on equal ground. Some excel, Jake Garza of PlayIndiana said. Others fall by the wayside.

It’s led to a top-heavy marketplace.

“I will say that there’s a very clear pecking order when it comes to the state’s 10 online sportsbooks,” Garza said. “DraftKings, FanDuel, and PointsBet are all the most user-friendly and all pump out tons and tons of promos every week. BetMGM is the state’s third most popular book, but it doesn’t have much to offer in the promo department. Same goes with the rest of the state’s sportsbooks.”

“The other downside, if you choose to look at it that way, is that there are only 10 sportsbooks to pick from. States like Colorado already have more options than Indiana, even though they haven’t had legal sports betting for nearly as long.”

The market will ultimately decide the winners and losers of Virginia sportsbooks. However, if the market remains balanced and competitive, players could reap the rewards.

Restrictions on certain bets

As mentioned above, Boozell has seen a lot of missteps in Illinois. The blame for a lot of the issues, including remote-registration hurdles, falls on lawmakers.

Another problem?

“If I had to pick one, I’d say the bans on certain wagers,” Boozell said. “You still can’t bet on Illinois colleges here – the University of Illinois, Northwestern, DePaul, etc. It probably encourages people to go offshore.

“There was also a weird stretch in July where betting on most golf events was prohibited due to amateur concerns.”

Virginia, too, will ban bettors from wagering in-state colleges and universities.

Despite its new status as the king of US sports betting, New Jersey also doesn’t allow wagering on NJ schools.

“There’s no betting on New Jersey college teams, even when they’re playing in other states,” Bill Gelman of PlayNJ said. “There’s also no betting on college sporting events that take place in NJ. So if an NCAA tournament were to take place here, the books would not be permitted to take wagers.”

Although lawmakers usually agree to such bans as a way to appease university administrators, restricted betting can come in other forms. Iowa has seen steady and substantial growth since launching sports betting. However, Derek Helling of PlayIA said the market does have one hang-up.

“It’s the statutory restrictions that prevent books in Iowa from taking bets on the NBA and NFL Drafts and esports,” he said. “I know for a fact the Iowa Gaming Association is pressing legislators to amend the law on drafts and esports. Right now, that’s the biggest weakness in the market.”

In a state with no professional sports teams, some of Virginia’s biggest sports programs are from the university ranks. It’s hard to quantify just how much of an impact such restricted wagering has on legal markets. But one thing is evident: For players already wagering with illegal offshore books or neighborhood bookies, it gives them less incentive to move their action to the legal sportsbooks like the ones in Virginia.

Tech issues and delays

Those sports bettors who have used offshore books or bookies have likely dealt with all matter of inconveniences and frustrations. The allure of legal sports betting was supposed to be convenience and safety.

In some states, though, the legalization of sports betting and online wagering has been followed by frustratingly slow execution.

“The worst aspect of Michigan sports betting is that the online launch has taken too long, especially during the pandemic,” Matt Schoch of PlayMichigan said. “Online gambling was legalized in Michigan on Dec. 20, 2019, and we won’t have apps launched one year after that. We’re now looking at a possible launch [this month].

“In Indiana, sports betting was legal on Sept. 1, 2019, and apps launched just a month later.”

Worse yet, when those apps have a subpar performance, the customer experience can be even more frustrating.

“People expect mobile betting to be fast and user-friendly. So anything that slows that process causes frustration,” Katie Kohler of PlayPennsylvania said. “For instance, sometimes users have had issues with geolocation. Or have had to wait one or two minutes to get geolocated. This is a ‘long time’ in an on-demand world. Even if it is rare, when you want to log in and make a bet, you don’t want to wait.

“Sometimes — again, this is rare, and this was not the operator but I believe [an issue with the software partner] — some sites went down during the beginning of the NBA playoffs. Talk about an inopportune time.”

States can also implement cumbersome technical requirements. They may make sense for internal controls or even to give the appearance of transparency. However, as Kimberly Yuhl of PlayWV said, it can create hurdles that annoy sportsbook operators.

“I would have to say the worst aspect of WV sports betting is the ultra-conservative approach of the WV Lottery,” she said. “The requirement for all aspects of the betting process to reside on servers in the state makes it less attractive to operators.”

As for Virginia, its big moment in the spotlight will come soon enough. All parties, regulators, operators, and players, are hoping that, at least technically, it’s a smooth one.

Customers struggle to deposit on betting apps

Initially, all of Virginia’s sports betting will be conducted online. The first brick-and-mortar retail options won’t take bets until the first Virginia casinos open in 2022 and 2023.

However, mobile betting isn’t always a headache-free endeavor. In Nevada, the former worldwide leader in sports betting, the expansion from retail betting to online wagering has had some hiccups. In-person sign-up requirements have frustrated would-be bettors. So, too, has the surprising lack of promo offers.

But as Marc Meltzer of PlayNevada said, there’s another quirk of online sports betting in Sin City.

“There’s only one option to fund an account in Nevada, and it’s a bit more complex than just linking a credit card to an account,” he said. “The somewhat more complicated policy means fewer people will fund an account via mobile.

“If there was an easier option, I gather more would fund accounts via mobile.”

Virginia’s sportsbooks shouldn’t face any such restrictions. However, given the requirement for sportsbooks to verify players’ identities, and given the myriad of other issues that can pop up with deposits, withdrawals, bonus redemptions, issues are bound to develop.

Reporting on market progress

Whether you’re a regulator, lawmaker, operator, customer or just someone who likes to write about the industry, transparency is key. To fully gauge the health of the market, all of these vested parties need information.

And the best way to get it? Detailed monthly reporting.

Each month, states across the US with legal sports betting release details about the previous month of betting. Some states do it better than others.

The information allows folks to make meaningful sports betting market comparisons across states, as well as specific sports. It also allows stakeholders within a specific state to judge the local market. In states where sports betting has otherwise been a successful endeavor, poor monthly reporting is sometimes the only real blemish.

“There’s not much that Colorado did wrong with the launch of sports betting,” Ian St. Clair of PlayColorado said. “But the reporting of monthly figures needs to improve. Aside from being late every month, which is not that big of a deal, the reports are bare-bones and really don’t offer much.”

“Which sportsbooks are doing well? What’s the breakdown? The state offers that for the sports that were wagered on, but it’s important to know who controls the market and the apps people are using.”

As the commonwealth gears up for its pending launch, Virginia has done a lot of things the right way. Hopefully, for the entire industry, the VA Lottery’s monthly sports betting reports will be another enviable feature.