Convenience retailers in certain states are beginning to face the decision on whether or not to get involved with two unfolding issues—sports gaming and recreational marijuana sales—as these states move to legalize one or both of these issues.

Sports Betting

For many, sports gaming may be a more immediate issue as the United States Supreme Court (SCOTUS) struck down one of the main federal prohibitions on the activity in May 2018. Prior to the SCOTUS ruling, a federal law passed in 1992 known as the Professional and Amateur Sports Protection Act (PASPA), prohibited sports betting except in Nevada, Oregon, Montana and Delaware, where it was grandfathered in as legal. The court, in deciding Murphy vs. NCAA, determined that certain provisions of PASPA violated the constitution and were not severable from the rest of the law. Thus, the court struck the entire law.

Since that time, seven additional states have acted to legalize sports betting within their jurisdictions. So far, most, if not all of the legal sports betting, is taking place at existing gaming establishments, such as already-legal casinos. The question facing the convenience industry is how to get involved in this emerging market.

To help states facing this issue, NACS has developed model state sports gaming licensing legislation. The association, along with state association executives, has started advocating for legislation that would create licensing regimes whereby convenience retailers could accept sports bets from customers under the umbrella of an existing gambling facility. NACS doesn’t envision convenience retailers establishing their own sports books—though any that choose to do so would certainly be allowed to seek a separate license just as casinos do today. Instead, this model legislation would allow convenience retailers to partner with casinos or other operators already taking bets as a way to expand their customer base.

The convenience industry is already one of the best trained and most experienced in checking IDs to ensure that customers are of legal age. The industry sells more than half of the lottery tickets in the U.S., and there will likely be considerable overlap between sports gaming and lottery customers. In many ways, the industry is well-suited and positioned to form successful partnerships in this space. NACS is doing its part to ensure this is possible.

A central mission of NACS is to ensure that convenience retailers are able to sell legal products in a responsible manner and on a level playing field.

Marijuana Retailing

The issue of recreational marijuana presents its own set of legal issues. Ten states have legalized the recreational use of marijuana within their borders. The most recent is Michigan, which legalized it by a ballot initiative this past November. Yet while states have moved to make the recreational use of marijuana legal, it remains an illegal drug in the eyes of the federal government. This also presents a problem in the 22 additional states that have made the use of marijuana for medical purposes legal in one form or another. Marijuana remains a schedule one drug, which means the federal government does not recognize the medical benefits of marijuana and deems it illegal.

However, many believe federal prohibition on the use of marijuana is likely to come to an end sooner rather than later. A number of bipartisan bills introduced in Congress have incorporated everything from requiring the federal government to recognize state legalization measures to fully legalizing marijuana on the federal level. Further, the Trump Administration’s most strident voice against legalization was former Attorney General Jeff Sessions, who is no longer in office.

As with sports betting, NACS has created model licensing legislation that would allow legal marijuana products to be sold at convenience retailers. The model legislation is meant for states that have made the recreational use of marijuana legal and is based on state schemes that regulate the retail sale of alcohol. If enacted, NACS legislation would open the door to stores in the convenience channel to choose whether to introduce this emerging category to their customers. NACS is also reviewing the changes made to the legal status of industrial hemp and CBD products in the Farm Bill that Congress passed in late December to determine what opportunities might exist for convenience stores in that space.

A central mission of NACS is to ensure that convenience retailers are able to sell legal products in a responsible manner and on a level playing field. The state licensing legislation models NACS has created would accomplish this for the industry.