Would Casinos Support Wisconsin Online Sports Betting?

Many continue to wait for the legalization of Wisconsin online sports betting. And, well, they will probably need to keep waiting.

Make no mistake, the expansion of sports betting in Wisconsin is absolutely on the minds of state and tribal officials. It has likely been a consideration ever since The Badger State launched sports betting back in 2021. 

What’s more, casino stakeholders are on record admitting that online sports betting in Wisconsin is an inevitability. Its popularity is too ubiquitous. Thirty-nine states will offer some form of sports wagering when Missouri debuts operations later this year. The majority of those places allow online mobile sports betting sites to operate in the market. It is only a matter of time before Wisconsin follows suit.

How much time, though, depends largely on tribal interest. They currently have gaming exclusivity in the state. And they retained that standing when amending the Wisconsin constitution to allow for sports betting years ago. 

This raises an interesting question: Why would Wisconsin casinos ever forfeit that exclusivity and allow top online sports betting sites in the United States to enter the market and, theoretically, dilute their revenue share?

Lower Casino Tax Rates May Pave the Way for Wisconsin Online Sports Betting

Any attempt to legalize Wisconsin online sports betting will require tribal collaboration. The best way to lay the groundwork for their interest is to establish incentives. Increasing the amount of market competition seems counterintuitive to that, but there are a couple of benefits. 

Firstly, sportsbooks in Wisconsin currently pay various fees. These relate to not only the services they provide, but how much revenue they’re generating. However, if Wisconsin online sportsbooks enter the fold, these tax rates and fees will diminish. Consider this excerpt from Wisconsin legislative analysts Madeline Kasper and Ryan LeCloux:

“The annual payments based on gaming revenue are regarded as a reimbursement for the exclusive ability to conduct types of gaming prohibited on non-tribal lands in the state. To reflect this, the compact amendments include clauses specifically stating that if the Wisconsin Constitution and state statutes are changed to allow the state or other persons to conduct additional types of Class III gaming, then the tribes are relieved of their obligations to make the payments. These clauses would be triggered if the state constitution or statutes were changed to allow [online] sports betting. Tribes could also seek to renegotiate any other provision of the compacts.”

In essence, by green lighting online operations, tribal sportsbooks will lower the overhead to which they’re subject. Now, this may offset the amount of money they lose to new online sportsbooks. At the same time, that money is largely theoretical, because Wisconsin online sports betting is not yet allowed. 

Expansion May be Key to Casino Online Betting 

This brings us to yet another critical juncture. Brick and mortar gaming operators will invariably want to offer online sports betting themselves. As things stand, a couple of casinos have Wisconsin sports betting apps that can be accessed on tribal property. In order to offer those services off-site, they will need another amendment.

“The compacts also provide that a tribe is not authorized to operate any new types of Class III gaming unless its compact with the state is amended,” writes Kasper and LeCloux. “Thus, a tribe would need to renegotiate its compact if it wanted to offer [online sports betting outside one of its casinos].”

These gaming agreements can be renegotiated independent of allowing other online sportsbooks inside the market. Yet, this is where the state may apply leverage. 

The rise of online sports betting in the United States is proving to be quite lucrative at local government levels. And that makes sense. The vast majority of wagers placed in the USA get processed through a mobile betting site. That share is higher than 95 percent in many parts of the country. There is no rivaling the convenience of online accessibility. The larger the scale at which it’s offered, the more a state stands to make.

To that end, if tribal operators want to expand their footprint, Wisconsin officials can try insisting that any amendment allow for corporate competition. Tribes can always balk at this and leave their gaming compacts unchanged. In doing so, however, they may be costing themselves earning potential. 

Striking a Balance will be Critical to the the Future of Sports Betting in Wisconsin

In the end, tribes continue to hold all the leverage. They can, for the most part, block any expansion into Wisconsin online sports betting. But eventually, the search for a middle ground seems more likely. 

Any number of possibilities are on the table. Maybe Wisconsin online sportsbooks can be disallowed from opening physical locations. This keeps the on-site business in Wisconsin casinos.

Aside from that, tribes could negotiate an exclusive launch window. In this scenario, their online operations go live first. This gives them a chance to build up the client base. Then, in a span of weeks or months, top online sportsbooks in the United States follow suit. 

Beyond that, the amendment can also stipulate that online sportsbooks must allocate a portion of their revenue to tribes. Think of it as renting digital property space in the market. Not all states have the leverage to do this, but the Wisconsin online sports betting market should be profitable enough for corporations to accept something along these lines.

Whatever happens, it will be interesting to see how online sports betting in Wisconsin takes shape. And it will be even more interesting to see how long it takes to assume that shape.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: