Morgan Stanley Research on Friday said it expects sports betting to be legalized in 12 states in 2021, with an additional two or three states legalizing online gaming.
Wagering on sports is currently legal in 23 states, while online gaming is legal in six
The financial services company noted most states already have set the dates for their respective legislative sessions, and most of those are in the first half of the year.
“We base each forecast on the knowledge there is significant momentum behind legalization in that state,” the study’s authors write.
The main factor driving this sudden push to legalize different forms of gaming is money. The coronavirus pandemic has dramatically curtailed business activity, and therefore has impacted states’ tax collection.
“With states facing larger budget deficits than in years past because of COVID-19, governments are increasingly looking at sports betting and online gambling as a way to plug the gaps,” the study continues.
Morgan Stanley noted there are six governors who have publicly asked their legislatures to pass laws legalizing betting, three states whose citizens have passed referenda, and in the remaining states, bills already have been filed by legislators, including Florida, Georgia, Minnesota and Mississippi.
While New York Governor Andrew Cuomo has proposed a high tax rate, possibly as much as 50%, the other states considering legalization are more in the range of 6% to 20%, the study’s authors say.
“Notably Arizona, Missouri, Ohio, Texas and Minnesota all have proposed legislation with tax rates in the 6%-7% range,” they add.
If sporting betting is legalized in more states, Morgan Stanley said this will drive the stocks of gaming companies higher.