Wyoming Faces Criticism for Investing in Gambling Stocks, Despite Practice Being Commonplace

Wyoming continues to gamble on gambling, and the state is facing criticism for its investments. However, other states are also investing in betting companies as part of their diverse portfolios.

The Cowboy State Daily reported that the company’s shares in DraftKings have fueled debate over gambling stocks. However, the state has actually significantly reduced its stake in the company.

It has held a position in DraftKings since Q3 2022 and now owns 2,326 shares in the betting and gaming company, down from a high of 12,365 shares in March. Its stocks are now worth just over $110,000.

The holdings in DraftKings are part of a diverse portfolio that includes several gambling-related companies. The SEC filings for the state reveal shares in the following:

• Flutter – 4,322 shares worth $1.2 million
• Super Group (Betway/Spin) – 88,913 shares worth $969,891
• Sportradar Group – 22,126 shares worth $621,298
• Monarch Casino – 5,889 shares worth $509,045
• PENN Entertainment – 16,870 shares worth $301,467
• Boyd Gaming – 3,145 shares worth $246,033
• Gambling.com – 18,465 shares worth $219,549
• Rush Street Interactive – 14,232 shares worth $212,057
• MGM Resorts – 6,160 shares worth $211,842
• Caesars Entertainment – 6,954 shares worth $197,424
• Churchill Downs – 1,399 shares worth $141,299

Jeff Robertson, communications director for the Wyoming Treasurer’s Office, explained the state’s investment strategy, stating: “Our investment team includes trained computer programmers who build models with various stocks included in our various portfolios. They run scenarios as a guide on what we should buy and sell as needed.” 

Wyoming Considers Raising Gambling Taxes

Some lawmakers expressed concern that the state was investing in gambling companies while also considering raising taxes on the industry. Wyoming has proposed doubling the tax on sports betting to 20% from the current 10%.

State Senator Cale Case said: “I’m not sure we should be investing in gambling when we’re trying as a state to regulate gambling and you know, decide our positions there.”

However, Sen. Tara Nethercott, who chairs the legislative Select Committee on Capital Finance and Investments, brushed off any concerns. A tax increase in Wyoming would be negligible in the overall success of the companies in the portfolio.

She stated: “Their market is much, much larger than the state of Wyoming. And I think if we were to look at their global revenues, any tax shift by percentage points in the state of Wyoming will have absolutely zero impact on shareholder profits to large investors.” 

Critics may argue that active investments in gambling companies may dissuade lawmakers from raising taxes on the industry, but Nethercott also dismissed this, saying:

“It’s like Coca-Cola. What is Wyoming’s contribution to Coca-Cola’s bottom line? If all of Wyoming stopped drinking Coca-Cola – not sure it would matter much.”

Rep. Tony Locke, meanwhile, said he wants to dig deeper into Wyoming’s decisions to invest in gambling companies. However, Locke admitted that he doesn’t know enough to pass judgment yet.

Wyoming Investments Not Unusual

Casino Beats has also found that other states have similar investment portfolios that include gambling stocks. Looking at New Jersey as an example, the state has shares in many of the same companies.

With a higher budget, its shares are considerably larger. It holds shares worth over $2 million in PENN, MGM, Caesars, Boyd, and Churchill Downs.

New Jersey has also raised the taxes on both sports betting and online casinos this year, raising the rate up to 19.75%. This is in line with the average across most states in the country.

There is little connection between new legislation and state investments. Sen. Case admitted as much, stating: “I realize it’s different people doing different things.”