The debate over federal oversight in the booming online gambling and sports betting industries has moved beyond whispers, as a Senate Judiciary Committee hearing on the topic signaled potential regulatory shifts. Richard Schuetz, CEO of American Bettors’ Voice and a veteran of the gambling industry, recently outlined his views on what may come next.
Regulatory Oversight: A Growing Concern
Schuetz, speaking during an investor call hosted by Deutsche Bank analyst Carlo Santarelli, emphasised the importance of strong state regulatory bodies in maintaining public trust and legitimacy in the casino industry. This, he argued, helps to fend off federal intervention—something increasingly discussed in the wake of the rapid expansion of online sports betting.
“The speed of the online sports betting rollout has created a knowledge gap among regulators,” Schuetz noted, highlighting the need for more informed oversight. This gap, in his view, leaves the industry vulnerable to federal scrutiny.
Santarelli posed a challenging question: do robust state regulatory practices really matter? Schuetz’s answer was unequivocal: yes. Effective regulation, he said, ensures fairness and transparency while also protecting the industry from the prying eyes of Washington, D.C.
The Role of the Massachusetts Gaming Commission
One bright spot in state regulation, Schuetz noted, is the Massachusetts Gaming Commission (MGC). The MGC has been scrutinising the so-called “ban-or-bankrupt” business model in sports betting, which has raised concerns about fairness to consumers.
Schuetz acknowledged the MGC’s efforts, saying, “They’re looking to make sure consumers are treated fairly.” However, he stopped short of predicting whether this examination would lead to significant changes or influence other states to follow suit.
Federal Politics and State Tensions
The ongoing tug-of-war between state governments and federal lawmakers is a critical issue. Schuetz observed that the significant lobbying efforts in the industry, particularly at the state level, have caught the attention of federal politicians.
According to Schuetz, the recent hearings are less about immediate regulation and more about Washington positioning itself to capitalise on the industry’s deep pockets. Santarelli agreed, noting that the hearing revealed a growing federal interest in the substantial lobbying spend of the gambling sector.
iGaming Expansion Faces Challenges
Unlike the meteoric rise of sports betting, Schuetz predicted a slower rollout for online casino gaming (iGaming) across the United States. While some, like Matthew Kredell of PlayUSA, foresee up to 14 state legislatures considering iGaming bills this year, Schuetz expressed doubts.
The primary roadblock? Resistance from brick-and-mortar casinos, especially in states like Michigan and Pennsylvania, where online gaming has already demonstrated its revenue potential. Schuetz argued that physical casino operators fear losing ground to their digital counterparts, leading them to resist iGaming expansion.
Texas: A State to Watch
Texas has long debated the merits of legalising casinos, sports betting, and iGaming. However, 2025 may prove to be a turning point. Santarelli pointed to an organised and well-funded lobbying effort for destination resort casinos as a potential catalyst for change in the Lone Star State.
While the outcome remains uncertain, Texas represents a microcosm of the broader national debate: states weighing the economic benefits of legalisation against concerns from established gambling interests and potential federal intervention.
Industry Investment and Outlook
Schuetz’s caution about iGaming expansion aligns with the sentiments of many investors, Santarelli noted. The consensus is that iGaming will not replicate the rapid adoption of online sports betting, at least not in the immediate future.
For now, the focus remains on states like Texas, where the combination of legislative interest and powerful lobbying forces could reshape the gambling landscape.
A Delicate Balancing Act
As the U.S. gambling industry continues its digital shift, the balance between state-level autonomy and federal oversight will be a defining issue. While some states, like Massachusetts, are pushing the envelope with consumer protection efforts, the broader industry faces scrutiny from all sides.
For Schuetz, the takeaway is clear: without robust state regulation, the door to federal oversight remains wide open. And with Washington increasingly interested in the financial stakes, that door might not stay closed for long.
