The Legalization of Wisconsin Sports Betting May Have Boosted Surrounding Small Businesses

Ever since Wisconsin sports betting launched in November 2021, the primary beneficiaries have been three-fold. 

There are the tribal operators licensed to offer sports betting at Wisconsin casinos. There is the state overall, which has created another sizable tax revenue stream. And then, there are the gambling enthusiasts themselves, who now have the ability to bet on sports in Wisconsin rather than traveling to other states that offer it.

As it turns out, though, the past few years have churned out another beneficiary: small business owners.

While this is likely a byproduct officials considered during initial sports betting talks, it will be revelatory for many. The question, of course, is how and why small businesses are seeing dividends from the state’s revamped gaming laws.

But there is also another question to consider: Does the state of Wisconsin actually view this as a positive development? Or is there a deeper trickle-down effect that warrants further exploration?

How Certain Small Business Owners are Benefiting from the Legalization of Wisconsin Sports Betting

Whenever a state legalizes sports betting, it acts as a natural draw for people in neighboring states that do not yet have access. This is no different for Wisconsin.

Sure, many of the states around them have sports betting. And of those states, a handful allow residents to access top online sportsbook operators in the USA. But there is one state, in particular, that possibly funnels customers toward The Badger State: Minnesota.

As things currently stand, sports betting in Minnesota is not yet legal, despite numerous attempts to do so. Depending on their location, certain residents will be inclined to drive across state lines and bet on sports in Wisconsin. 

Of course, the inverse is also true. Because Wisconsin online sports betting isn’t yet legal, select residents will be closer to other states than they are to licensed casinos. This, in turn, helps juice sports betting profits for other locales. But, as Jonah Beleckis of Wisconsin Public Radio explains, this can have an outsized impact on The Badger State’s small businesses as well. Especially during football season. Here is what he writes:

“Jason Lopez’s studies of sports betting throughout history show this: The act of traveling to gamble is about as old as gambling itself. And modern Wisconsin is no different. Residents dash across state lines to Illinois, Iowa or Michigan to put down money legally from their phones. Businesses near the Wisconsin border could see more customers — or at least more traffic in their parking lots [as] professional football is consistently among the country’s most-bet sporting events.”

This is in many ways a potential good thing for The Badger State’s economy. But it may also be a driving force behind further changes to Wisconsin sports betting laws.

Could Wisconsin Legalize Online Wagering to Disincentive Residents Leaving State to Wager?

Wisconsin sports betting was eventually legalized at least in part because officials knew residents were gambling elsewhere anyway. Could that same logic lead the state to approve online wagering, too? Consider this excerpt from Beleckis’ piece: 

“Jason Lopez, a University of Wisconsin-Madison assistant professor of media and cultural studies, wonders if the recent steps to expand sports betting in Wisconsin’s neighbors could pressure the Badger State to change its laws. ‘It is commonly the case that once some state or region opens up gambling and legalizes it, it will commonly siphon people from the surrounding areas, which then will occur like a domino effect where widespread legalization starts to happen,’ Lopez said recently on WPR’s ‘Central Time.’”

This is an issue we have pondered many times in this space. And there might be signs that Wisconsin online sports betting is becoming a more widely discussed topic among policymakers.

Are Signs Starting to Point Toward the Legalization of Online Sportsbooks in Wisconsin?

Two developments stand out on this subject. First and foremost, multiple casino stakeholders in Wisconsin have said they see online sports betting as an inevitability. And this makes sense.

At present, the vast majority of sports bets placed in the United States are processed through online operators. If your market already allows in-person wagering, chances are online transactions will invariably become a priority. 

In some cases, though, it will take time. That used to be the prevailing sentiment in Wisconsin’s case. Experts and stakeholders have referenced all sorts of timelines. Some of them go out as far as 10 or 15 years. 

That seems long. And if we had to guess, casinos in Wisconsin would agree (provided you gave them all truth serum). In fact, the Potawatomi Casino Hotel recently launched a Wisconsin sports betting app. For now, it can only be accessed on tribal grounds. But would they really go through the motions of developing an app just to offer it inside their own property lines? Or are they, among others, sensing that Wisconsin sports betting will expand to include online operations in the near future? 

These are fair questions. They are also without answers. And it is not clear when clarity might come. However, given the state of the industry, it feels like we will no more about the future of online sports betting in Wisconsin once the next round of legislative sessions convene

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