SBC News Voice of the Sports Betting Industry
Four months following the repeal of PASPA, intriguing partnerships have flourished as US and European gambling enterprises form strategic alliances seeking to crack world sports’ biggest market. Chris Murphy Editor of SBC Americas details US betting’s early movers, and why they will likely collide against old influencers…
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Last time we reviewed the newly regulated American sports betting market I described it as a curate’s egg – some of it good, some of it bad. Well, three months down the line from PASPA’s strike down and the egg has finally hatched. And so far it’s looking mostly good for those who dared to get in first.
Where are we currently at? Outside of the established Nevada sportsbooks, betting is now legal in Delaware which was first to go live. New Jersey, second to open sports betting, has become a hive of activity, while Mississippi was third to go legal. Bettors in West Virginia can likely expect a September 1 start date, but Pennsylvania and Rhode Island, while having legislation in place, are expected to offer legal bets in October.
New York made sports betting partially available in its upstate casinos but missed the legislative deadline to get statewide wagering onto the statute books.
Next up are 14 states currently considering making the move to legal sports betting. In no particular order, they comprise California, Kansas, Oklahoma, Iowa, Missouri, Louisiana, Michigan, Illinois, Indiana, Ohio, Kentucky, South Carolina, Maryland and Connecticut. The latter, it transpired this week, is unlikely to make the cut before the end of this year, mainly due to disagreement among tribal gaming interests.
So legal sports betting is, in the loosest sense of the phrase, up and running in America. It is perhaps a little more advanced than observers of this nascent market might have originally anticipated when SCOTUS struck its hammer blow against federal interference. The reason behind that turn of speed to market is open to speculation. But the prospect of turning black market bets into tax rich legal wagers simply has to be a mouthwatering incentive for states to encourage a thriving sports betting sector.
As predicted by some of the more erudite industry thinkers, one of the key factors to this early success has been the willingness to forge partnerships and foster a collegiate approach to technology and knowledge sharing. Hence collaborations between the likes of MGM and the NBA, DraftKings and Kambi, Hard Rock and Kindred, FanDuel and Boyd Gaming and William Hill US with IGT and numerous casinos across West Virginia, Mississippi, Nevada and Delaware. What you know and who you know apply in equal measure in the new legal sports betting era so expect much more of this going forward.
But while there is clearly an appetite for sports betting, there remain old influences at force, namely tribes who, having cut lucrative deals with state lawmakers, want to retain their exclusive compacts. Why wouldn’t they? In Connecticut, for example, they would like to see sports betting enshrined in law as a style of casino game which, under the current regime, is exclusive to them. In return for that exclusivity, the tribes hand over more than $200m a year in revenue to the state. No surprise then that Connecticut’s lawmakers are procrastinating with so much at stake.
The short to mid-term outlook for sports betting in the US remains encouraging if a little unclear. There are serious questions, for example, over the WIRE Act which presents a challenging conundrum for incumbents looking to offer interstate sports wagering. Then there’s managing the expectations of those state tax officials who view legal sports betting as a lucrative new revenue stream to prop up their public finances. They’d do well to listen to those in the know who will testify that when it comes to sportsbook margins, there’s more meat on a butcher’s pencil.
So interesting times ahead for American sports betting. Fingers crossed that policymakers strike that finest of balances between encouraging enterprise and raising revenue. Otherwise, that curate’s egg could well transmogrify into what we British amusingly refer to as a ‘bugger’s muddle’!
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The ‘Betting on Sports Conference’ (#boscon2018 – Olympia London-17-20 September 2018) will have a dedicated track on US sports betting – ‘Betting on Americas’, detailing expert insights and knowledge on US market movements. Click on the below banner for more information…
