Jay Snowden, the CEO gambling giant Penn National Gaming (PNG) was recently on the CNBC program “Power Lunch” to discuss what COVID-19 has done to the gaming industry and what the way forward is for gaming firms in America.
Snowden said that he believed that the revenue crunch resulting from the COVID-19 pandemic will likely expedite the legalization of sports betting across the United States. Penn National Gaming is currently the operator with the largest spread of operations in legal gambling states, and Snowden believes that the firm is due for a surge in the coming months.
PNG has posted big losses since the COVID-19 pandemic, due to the shuttering of its list of 41 properties. There is a push now by different states including Nevada to slowly start the reopening process in a phased wise manner and gaming firms like Penn are getting ready to get back to business slowly but surely.
More Revenue Needs to Mitigate Budget Shortfalls
Many states are in the midst of significant shortfalls in revenue as the social distancing measures enacted to quell the coronavirus has decimated their revenue collection, as many Americans are struggling to keep afloat economically.
The state of California is projecting a loss of $54.3 billion in their budgets due to COVID-19. Other states, such as Wisconsin, Colorado and Ohio have already made moves to cut down on their spending to alleviate the impact of lost revenue.
In May 2018, the Supreme Court’s decided to repeal PASPA 1992 which prohibited sports betting. Since then 23 states have legalized sports betting and 16 more states have pending legislation that could legalize betting as soon as their lawmakers are able to agree on the specifics.
Sports betting revenues are not expected to make up for a significant portion of state budgets due to tax structure issues, but many advocates contend that the resulting revenues, however small, are better than nothing.
DraftKings CEO Concurs with Snowden’s Assessment
Jason Robins, the CEO of DraftKings, also expressed a similar opinion as Snowden, noting that the economic crunch faced by states could potentially lead to a faster road to legalization in the near-future.
Robins also said that the time to focus on tax revenue is still to come, with public officials focusing more on ensuring that the health of their constituents will be protected. However, Robins argued that discussions on regaining lost tax revenues will likely be facilitated, even among states that have been less enthusiastic about legalizing gambling.