“Industry Veteran Sounds the Alarm: Federal Regulation on the Horizon for Casinos”

Recently, a Senate Judiciary Committee hearing concerning online gambling and sports betting marked merely the commencement of a movement for federal gaming supervision. Such was the forecast by American Bettors’ Voice CEO Richard Schuetz.

Schuetz shared his insights as a featured speaker during an early January investor call organized by Deutsche Bank analyst Carlo Santarelli. Santarelli depicted American Bettors’ Voice as “a non-profit organization aimed at providing a platform for sports bettors within the U.S. betting landscape.”

With extensive experience in the sector, Schuetz is a seasoned professional who has operated on both sides of the regulatory table. He previously served as president of the then-Stratosphere casino in Las Vegas, in addition to being the executive director of the Bermuda Casino Gaming Commission and a member of the California Gambling Control Commission.

Taking a contrarian stance, Santarelli inquired whether it really matters if regulatory agencies fulfill their roles. Schuetz responded that it is crucial for sustaining credibility and public confidence in the casino sector, particularly as it shifts online. He mentioned that it also dissuaded federal involvement, “a relevant topic in the online-gaming community today.”

On the topic of the relatively rapid six-year rollout of online sports betting, Schuetz conveyed that regulators generally possess limited knowledge of that facet of the broader gambling industry. In his perspective, this causes them to hesitate in posing even the most fundamental questions.

He noted an exception in the Massachusetts Gaming Commission, which is currently examining the so-called “ban-or-bankrupt” business model for sports betting. Santarelli relayed, “When asked about his perspective on the findings of this investigation, Mr. Schuetz affirmed that he thinks the MGC is striving to ensure consumer fairness, although he did not elaborate further on his outlook regarding the potential outcomes of these discussions or if they would yield any significant alterations.”

Regarding federal oversight, Schuetz anticipated ongoing tensions between state governments and Washington, D.C., especially considering substantial expenditures and lobbying for igaming and sports betting at the state level. “Schuetz perceives the recent hearings as indicative of federal legislators seeking to engage in the considerable lobbying investments within the industry,” Santarelli remarked.

In contrast to Matthew Kredell of PlayUSA, who forecasted that igaming would be on the agenda in as many as 14 state legislatures this year, Schuetz believed it would not proceed as rapidly as sports betting has. Santarelli noted, “We think the investment community generally shares this perspective, so we do not believe this outlook is significantly out of consensus.”

Schuetz identified terrestrial casinos as the primary barrier to igaming expansion, particularly in light of the online revenues reported in Michigan and Pennsylvania. He suggested that this has made traditional operators more resolute, as they fear that their income might be diminished by online competitors.

Texas emerged as one significant exception, having undergone multiple legislative sessions contemplating casinos, sports wagering, and igaming. “What sets 2025 apart, in our opinion, are the key players and their lobbyists, with some influential factions in the gaming industry forming a strong lobby for the legalization of destination resort casino gaming,” Santarelli noted.

The principal hindrance in Texas remains Lt. Gov. Dan Patrick. Not only is he a fervent opponent of gambling, but he has also refrained from bringing casino and sports betting proposals to the state Senate floor due to a lack of Republican backing.

There are those who speculate that the prospects for Lone Star legalization could improve in 2025, depending on whether Patrick secures a position in the Trump administration. However, as of now, he has yet to receive an offer.

“While a potent lobby is undoubtedly vital in the pursuit of legalizing casino gaming under a destination-resort model, one notable hindrance, aside from political backing, is a fairly robust state budget, as filling budget gaps often serves as a key driver for the momentum toward casino legalization,” Santarelli stated. Schuetz remarked that sports betting might serve as a strategic bargaining tool if support for casinos arises.

Concerning the ever-challenging California situation, “When Mr. Schuetz informed us in 2022 that the ballot initiative to legalize [sports wagering] beyond the tribes was DOA, long before November, we took heed.” Now, he believes that commercial operators are becoming more strategic and understand that the path to legalization lies in collaboration with the Golden State’s tribes, rather than attempting to bypass or sidestep them.

Santarelli observed that Schuetz appears “significantly more constructive these days, compared to 2022, regarding the refined operator strategy towards partnering with the tribes.” However, he acknowledged that challenges remain.

The challenges encompass potential revenue sharing agreements. Santarelli suggested, “One might interpret this type of arrangement as the tribes effectively acting as the state, with the fee paid to the tribe resembling a sort of tax rate.” He added that Californians are still facing “an extended wait,” as the likelihood for eventual profit depends on the tribes’ agreement.