The launch of the DraftKings Sportsbook in New Jersey a week ago dominated headlines with good reason – the daily fantasy sports industry leader beat an array of well-established names in the sports betting industry to the punch with respect to mobile wagering in the Garden State.
Naturally, that begs the question of whether they could pull off the same feat elsewhere, and if so, how soon. Given that DraftKings has gotten what is presumably the hardest part – an initial launch – out of the way, subsequent debuts could have more of a “turnkey” quality to them.
And with the company having plenty of time before the next wave of state legislatures potentially pass sports betting bills — or states with laws on the books actually get rolling — many of the kinks should essentially be worked out.
With that being said, let’s examine where the best bets for any late 2018/2019 DraftKings Sportsbook debuts reside:
Sports betting is already fully legalized in the Keystone State, although onerous licensing fees ($10 million) and tax rates (36 percent) have put a serious damper on progress and licensing applications.
Only current gaming license holders can apply for a sports betting permit according to current state law, so DraftKings will need to partner with such an entity. That’s the case in New Jersey, where they are operating under one of the online gaming licenses granted to Resorts AC.
The one major obstacle in play appears to be the almost complete lack of willingness on the part of the state’s casinos to bite the bullet and submit their applications in light of such back-breaking fees. Notably, there’s been some modest movement on that front recently. Parx Casino, the largest in the state in terms of revenue, announced a partnership with sports betting company GAN to provide the underlying sports betting platform for both a future land-based and online sportsbook.
West Virginia is another jurisdiction where legality is no longer an issue. However, it’s also a state where there hadn’t been any tangible progress toward the actual availability of sports betting until very recently.
Penn National – which operates Hollywood Casino Charles Town — was awarded the first gaming operator license in the state in August. Meanwhile, DraftKings rival FanDuel was right behind them in securing their permit to operate in partnership with The Greenbrier.
Under West Virginia law, the state’s five existing gaming facilities can offer sports betting under the purview of the state’s Lottery Commission. Mobile wagering is also fully legalized in the state, and as with New Jersey, each license holder is allowed up to three online “skins”. That naturally opens the door for DraftKings Sportsbook, although to date, no serious rumblings of potential partnerships have emerged.
Despite apparent ongoing tensions between Gov. Jim Justice and state legislators regarding the lack of integrity fees for the sports leagues in existing law, the sports betting train is on track for NFL season — if not slightly sooner — at the aforementioned facilities.
Real-money gaming issues never seem to be an easy piece in the Empire State. New York became one of the epicenters of the daily fantasy sports legalization battle earlier this decade before regulations eventually passed in a memorable late-night, down-to-the-wire vote in June 2016.
Sports betting has encountered a similarly thorny legislative path. The push for widespread legalized wagering had some momentum during the 2018 legislative session. However, both Senator John Bonacic and Assemblyman Gary Pretlow – long-time champions of the issue – saw their respective bills get stonewalled when both chambers adjourned their 2018 sessions in June.
Opposition from upstate tribes was labeled as one of the major culprits for the non-passage. However, Pretlow –the acting chairman of the Racing and Wagering Committee in the Assembly – has vowed to address statewide sports betting legislation at the onset of next year’s legislative session in January.
There’s one saving grace for the moment – a 2013 referendum that authorized wagering at the state’s four upstate commercial casinos if PASPA was ever repealed. That piece of legislation allows sports betting at the following locations:
- del Lago Resort and Casino
- Tioga Downs Casino
- Rivers Casino and Resort
- Schenectady Resorts World Catskills
However, by the law’s wording, mobile wagering appears to only be authorized within the physical casinos themselves. That would seemingly make the current environment less than ideal.
Nevertheless, DK has inked a deal with del Lago for retail and online sports betting. If and when the physical sportsbook comes to pass, it would be the first DraftKings-branded retail sportsbook location. And while any online wagering would be limited to taking place within del Lago for now, it would provide DK an initial digital foothold in advance of a possible passage of widespread sports betting legislation in 2019.
Sports betting continues to be in a decidedly gray area in the First State. There had been plenty of talk about a special legislative session to ideally pass a bill this summer. However, conflicts with the influential Mashantucket Pequot and Mohegan tribes about whether they have exclusivity to sports betting has essentially slowed down any movement to a halt.
Consequently, the picture for DraftKings remains much murkier in Connecticut than in the three aforementioned states. Negotiations between the state and the tribes are reportedly ongoing. With each side seemingly entrenched in their respective positions, though, chances of a 2019 passage and a subsequent point of entry for DraftKings Sportsbook look to be slightly less than 50 percent.
DraftKings clawed its way to the top of the multi-million-dollar daily fantasy sports industry by maximizing the most visceral appeal of its product — the chance to win large sums of money in a single day. That potentially making any sporting event, regardless of its participants, one of keen interest.
That seductive quality has enticed plenty of sports fans — approximately 10 million of them according to co-founder Matt Kalish — to at least give DK’s DFS offerings a try at one point or another.
The company has now officially kickstarted a new era, with its DraftKings Sportsbook officially going live on Aug. 6. Being the new kid on the block brings plenty of challenges; managing to capture the same level of engagement in the sports betting customer that they do with those on the DFS side is one of the bigger ones.
Spicing up conventional sports betting
Traditional sports betting can be a notably more “static” product than DFS on the surface. Many traditional wagers hinge on end-of-game outcomes. And many bettors may only have action on a handful of contests on, say, a typical NFL Sunday. Conversely, the DFS player could potentially have a stake to some degree in every game being played if they’ve created enough lineups.
Not averse to thinking outside the box, DraftKings Sportsbook has multiple features that allow bettors to have many skins in the game during the game. These are in addition to the conventional array of tried-and-true sports betting options, including:
- Spread/run line wagers
- Money line wagers
- Over/under wagers
- Parlay betting
- Prop betting
However, they’ve also literally made every “event within the event” potentially mean something by making all of them wagerable.
That’s right. Every point in tennis. Every play in a football game. Shoot, every pitch in a baseball game. They all have odds assigned within DraftKings Sportsbook, allowing you to plunk some money down on, say, whether Tom Brady’s next pass successfully finds its target or falls incomplete.
This week, for example, DraftKings Sportsbook is offering in-play golf bets on every hole for Tiger Woods and Rory McIlroy, who are included in the featured groups in the PGA Championship. Bettors can watch live action of those featured players on the PGA Championship app and bet on every shot on the DK Sportsbook app, with the odds changing on the fly.
Having that kind of in-play action certainly helps glue a fair share of eyeballs to a game, not to mention the DraftKings Sportsbook app. And while, admittedly, DK is far from the only operator offering in-game betting (it’s already big in Europe), there’s another innovative feature they can actually claim all their own for the moment – a revolutionary “live ticket” system.
Think sports betting meets day trading, in the purest sense. Except, in this case, you won’t hear a chaotic cacophony of “buy!” and “sell!” — the action all takes place over a matter of seconds within the serenity of a bettor’s smartphone or mobile device.
Simply put, any open bet on DraftKings Sportsbook – even those that fully hinge on end results – can be assigned a value based on what’s happening as the contest unfolds.
In DraftKings Sportsbook, you can monitor that potential value of your wager — which fluctuates as lines adjust for in-game events — and jump off at any point in time you feel is particularly advantageous. A click on the “Cash Out” button that appears on every open betting ticket is all it takes.
The live ticketing system even applies if you have suddenly second thoughts about taking a stake in multiple games. In other words, you can jump off a parlay just as easily as you can a single-game ticket.
DraftKings Sportsbook becomes the first to offer the live ticket system in the United States, and it’s a feature that could certainly help it carve out a niche in what will soon be a crowded online sports betting market in New Jersey. The fact that bettors can take advantage of the price they locked in when they opened their betting ticket – particularly when there’s a drastic change in circumstances, such as injury to a key player – is likely to appeal to a sizable segment of the customer base.
The guys at DraftKings know a thing or two about jumping into unfamiliar territory with both feet. They also pride themselves on nimbly adjusting in concert with regulatory requirements, customer expectations, and market demand.
They’re banking on all that experience to shepherd them through their initial foray into sports betting. Although the momentum has been building for months, that era officially began Monday for DK with the full rollout of their DraftKings Sportsbook in New Jersey.
Co-founder and Chief Revenue Officer Matt Kalish put it quite succinctly in a conversation with TheLines.com: “It’s a huge day being able to launch to every single person based in New Jersey and take bets.”
Proactive approach, calculated risk pay off
According to Kalish, the first serious sports-betting seeds were planted towards the end of 2017, when DK initially started building its sportsbook product. There naturally was plenty of risk in devoting too many resources too soon – the eradication of the Professional and Amateur Sports Protection Act (PASPA) was still an iffy proposition, and as it would turn out, months away.
DK doubled down soon after the calendar flipped to 2018, however, creating a Head of Sportsbook position and filling it in late February with experienced iGaming executive Sean Hurley. That acquisition brought some much-needed experience to the table. Essentially, the company envisioned a PASPA-less landscape at some point. And they didn’t want to be left out when it came to pass.
“We wanted to be ready in the event that legal, regulated sportsbooks in the US became an option in terms of a product that we could offer,” says Kalish. “We wanted to be ready to go as close to day one as possible with the launch of that product.”
The fact that DK beat several other established casino and sportsbook operators to the punch – cutting the proverbial ribbon on mobile sports betting in New Jersey as a new operator in the industry — is a feather in the cap of a few entities, Kalish emphasizes.
DK’s Technology, Product and Operations teams certainly head the list, having feverishly built the front end of Sportsbook’s platform from scratch. Partner Kambi Group has been essential in “oddsmaking and market creation,” along with enabling key functionality like in-game betting.
And Garden State regulators get their share of attaboys as well – Kalish lauds their professionalism, consistently open lines of communication and ability to provide prompt feedback on DK’s product platform while simultaneously carrying out the promulgation of “the first cut” of online sports betting regulations in the country.
Initial money lines raise eyebrows
So the hard work and persistence of multiple parties were clearly integral to DK’s first-to-market achievement. But who’s taking the hit for some questionable MLB money lines in last Thursday’s soft launch?
A side-by-side comparison posted by ESPN.com’s David Purdum on Twitter that day was quite revelatory – it shined a light on the fact DK was taking a much higher vigorish on average compared to the likes of established bookmakers William Hill and MGM, as well as to the consensus numbers for Nevada and offshore books.
Comparison of today's baseball odds at sportsbooks in New Jersey and Nevada: pic.twitter.com/x3kBV4wOep
— David Payne Purdum (@DavidPurdum) August 2, 2018
Even fellow sports-betting upstart and old rival FanDuel – which has already experienced a snafu or two of its own with pricing in the first few weeks of its Meadowlands Racetrack sportsbook – had more appealing numbers.
Leave it to the DFS guys to go contrarian.
But Kalish explains that DK simply embraced that as a teachable moment of sorts, making the appropriate tweaks to their numbers by the following day. The fact that there were only “a handful of users” (the product was only available on a limited basis last week) at that point certainly helped. And the importance of keeping competitive lines certainly isn’t lost on New Jersey’s first online sportsbook.
“Our strategy is we want to be the best total value operator in sportsbook. We want to be the best place to go play for anyone,” Kalish said. “Odds and payouts are a massive, massive chunk of that. We’re constantly assessing that. Any time that there’s anything that might undermine our ability to be the best place to play, we’re going to want to make an adjustment there.”
“We’re never going to want to be out of line where the market is.”
Built-in customer base, user-friendly platform offer substantial leverage
If DK does indeed keep their pricing dialed in relative to the rest of the New Jersey online sports betting space – one that they’re poised to get plenty of company in by the start of NFL season in a few weeks – they’re positioned to be an appealing destination for Garden State bettors.
And they may find a particular niche with those newer to wagering, or with the true sports-betting novice. It’s highly likely they have a robust captive audience of both.
Along with FanDuel, DK technically walks into the sports betting industry as a newbie, but with no shortage of experience offering “real-money sports products for American customers.” That, of course, refers to DK’s extensive existing DFS customer base, which Kalish approximates to currently be in the range of 10 million.
Legal Sports Report’s Eric Ramsey provided a detailed walk-through of DraftKings Sportsbook’s interface recently. He makes a strong case for it offering the right mix of ease of use, speed, time-sensitive, highly relevant data, and for existing customers, a certain synergy with DK’s DFS side. That has the potential to be a winning formula for connecting with the New Jersey resident that’s drawn in by all the hype around plunking some cash down on a game or two, but who’s a bit intimidated and risk-averse about delving into it.
Company’s innovative streak expected to continue
Now in their sixth year in the DFS industry – the last several as pacesetters — the folks at DK have also become pretty seasoned product developers. In Kalish’s view, that, along with plenty of support from experienced partners and suppliers as the company’s sports-betting arm matures, will be key to disproving any skeptics who don’t give the new kid on the block much of a chance.
“The need to constantly keep it fresh and add to the experience and to innovate on the offerings that you have just to keep the product fresh and interesting — I think we’ve done a good job engaging a group of customers for five-plus years now and steadily retaining and keeping their business,” he observed.
Although DK is cognizant that there’s already largely a tried-and-true formula for sportsbooks worldwide, they don’t see the space as being maxed out on innovation. To that end, while they don’t plan on tweaking for the sake of tweaking, there’s certainly a possibility of some crossover elements from DFS.
Noting that DK can bring some of their “core competency to the table”, Kalish alludes to formats such Pick ‘Em and Survivor that have been successful in daily fantasy possibly emerging as Sportsbook offerings over time.
Cross-promotion, specialty events part of marketing strategy
The company will naturally do plenty of cross-promoting to their existing DFS users in states where they’re able to implement DraftKings Sportsbook. Their past customer acquisition experience is expected to help, although Kalish acknowledges there are likely adjustments to make for the sports betting market.
An efficient, user-friendly platform combined with an enticing introductory offer – New Jersey residents can currently take advantage of a first-bet match of up to $200 by DK once they make an initial deposit in Sportsbook – is a good way to start, in Kalish’s view.
Riding the coattails of intensely popular one-off or short-term sporting events – high-profile UFC bouts serving as a prime example – is another strategy DK is excited about implementing.
- Exhibit A: Last August’s Conor McGregor-Floyd Merriweather extravaganza, which netted multiple $1 million bets and massive overall handle. DK plans to be front and center in capitalizing on similar circumstances moving forward.
As they did five-plus years ago, the company is setting out to conquer a market. Kalish feels the ingredients that have made for a winning recipe over time – creativity, consumer sensitivity and a dash of risk-taking when warranted – will translate just fine to sports betting.
“I think it’ll be a steady stream of that kind of pushing-the-envelope and trying to innovate on the product while doing a great job running the core experience that everybody expects.”
Monday brings yet another important benchmark in New Jersey sports betting as it represents the full debut of mobile sports betting in the state.
Somewhat surprisingly, it’s not one of the legacy names in the casino and sports betting industry already doing business in New Jersey cutting the ribbon on online sports wagering. Rather, it’s daily fantasy sports (DFS) industry leader DraftKings, which has quickly built a foothold in an industry it previously had no experience in.
DraftKings Sportsbook is now live for all New Jersey residents via one of Resorts Atlantic City Casino’s online sports betting licenses. The DraftKings Sportsbook smart device application is available for download on both iPhone (iOS) and Android platforms.
“I am excited to begin this new chapter in our story by officially launching what I believe to be the most innovative, mobile sports betting product in the U.S.,” said Jason Robins, CEO and co-founder of DraftKings. “We have put immense thought and significant resources behind the development of DraftKings Sportsbook and I’m confident that sports fans in New Jersey will enjoy using it to make the experience of watching the games even more interesting and thrilling.”
TheLines readers in New Jersey qualify for a generous introductory promotion when trying DraftKings Sportsbook for the first time. DraftKings will match your first bet up to $200 upon initial deposit. Taking advantage of this offer is as easy as clicking the links below and following the required steps. There are no additional promotional codes required:
Instructions for iPhone and Android Devices
Below you’ll find the step-by-step instructions for downloading DraftKings Sportsbook for iOS and Android devices:
- Click on the DraftKings Sportsbook download link on your device to direct you to the app in the iOS and Android store. Make sure you allow DraftKings to use your device’s location so it knows you are located in New Jersey.
- You will advance to the app download page. Click on the download button at the bottom of the screen. Once the app downloaded to your device, click open and log into the DraftKings Sportsbook using the email linked to your account.
- You’re now eligible for the $200 match on your first bet! Follow corresponding instructions for making an initial deposit. Deposits are accepted via credit card.
Leave it to those pushy Northeasterners to try and set the pace for everyone else.
It seems that the combination good old-fashioned homerism and a few bucks in New Jersey has had a far-reaching, topsy-turvy effect on Super Bowl odds all the way out in the desert. A recent PIX11 report spotlighted the flurry of activity that Monmouth Park, Borgata and Ocean Resort Casino have all seen in Big Game futures bets on the Giants in particular.
Unsurprisingly, the defending champion Eagles, with their fervent North Jersey following, aren’t far behind. The lowly Jets are seeing brisk action in their own right, too – even the goofy kid is getting a little lovin’.
Oddsmakers having to adjust on the fly
Bookmakers have had to adjust accordingly in their properties out west.
William Hill has come down from their original 40/1 odds on the Giants winning the Super Bowl LIII to 25/1, largely because of the volume of tickets written in New Jersey.
MGM, which also had 40/1 odds on the G-Men back in late January, has followed suit and made an even more drastic cut – bettors now have to settle for 15/1 if wagering on Big Blue to go all the way. And that sneaky longshot that once was the Jets at 100/1? Those odds have been sliced almost in half due to the Garden State’s flurry of tickets, now sitting at a slightly less appealing 60/1.
The ripple effect has been predictable, but given that Nevada has essentially had sports betting all to itself for decades, also unprecedented prior to the Supreme Court’s decision to eradicate PASPA.
Hints of regional bias had already started emerging earlier this summer. Unsurprisingly, traditionally Lakers-leaning Vegas sportsbook patrons have been plunking down plenty of cash on LA in terms of NBA Finals futures; however, the Celtics hold the distinction of top dog in New Jersey on those same wagers, even post LeBron-signing.
A sign of the times, and it’s likely to continue
These types of circumstances are likely to become increasingly commonplace, at least in states that boast both legalized sports betting and a proximate professional team or two. Bookmakers that operate multiple properties around the country may be in “tweak mode” from time to time as a result, especially while the number of states taking action remains relatively sparse.
And it may not necessarily be limited to futures bets, of course. We could certainly see similar night-to-night — or in the case of football, week-to-week — patterns emerge as each major sport goes through its first full season in a post-PASPA world. To that end, the 2018 NFL campaign should be one of the most intriguing ever from a sports betting perspective, even with only a handful of states accepting wagers.
It could develop into a phenomenon somewhat akin to All-Star Game fan voting, where “popularity bias” often ruins a good thing for someone else. In that scenario, it’s typically a deserving player that gets shut out of an honor due to another’s name recognition and past accomplishments.
The sports betting equivalent — sharp players missing out on potentially bigger scores due to bookmakers mitigating risk on certain underdogs more than they normally had to in the past.
All because some J-E-T-S fans think there’s at least a smidgen of a chance they can ride on Josh McCown’s shoulders all the way to February — and a massive payday.
Typically, you tread lightly when you’re the new kid on the block — whether in a classroom or at the workplace on an individual level.
That natural inclination to want to make a good first impression certainly applies from a business perspective as well. No second chance to make a first one and all that good stuff. And there’s value to be had in that line of thinking — many would-be customers say “sayonara” for good after a bad initial experience.
Yeah, well all that being said — recently, FanDuel has at times come off as if doesn’t seem to give a crap about such drivel. Not if the lines they first posted for the PGA’s 2018 WGC-Bridgestone — incidentally, not their first rodeo with wonky sports betting pricing despite the brief existence of their sportsbook — were to be taken at face value.
FanDuel’s PGA lines raising some eyebrows
Pro poker player Ryan Daut engaged in a very enlightening Twitter expose earlier Wednesday, posting a side-by-side comparison of FanDuel’s lines compared to those of offshore book Pinnacle. “Bad optics” is an understatement:
— Ryan Daut (@rcdaut) August 1, 2018
The glaring discrepancies — and not in the consumer’s favor, mind you — are potentially toxic. Maybe not in a vacuum, but there’s no such thing these days. Not with social media always at the ready to shine a glaring light on anything remotely negative. And that’s precisely what transpired today.
Wednesday afternoon, FanDuel Customer Support’s Twitter account issued the following “mea culpa” in response, albeit many hours after trouble began brewing:
We caught this too, resulting from a temporary issue with our pricing feed. No bets were taken and the pricing error has been corrected.
— FD Customer Support (@FanDuel_Support) August 1, 2018
“Growing pains” or disturbing pattern?
To compound things, it’s not the first such instance that the nascent FanDuel sports betting wing experiences some negative press. They also managed to raise the ire of more than a few bettors by not paying out some of last Tuesday’s winning tickets at their Meadowlands Racetrack location until the following day.
They were divergent perspectives in that situation — one bettor took to Twitter in that instance as well to say there hadn’t been enough cash on hand, which FanDuel pushed back on. The company issued a statement stating that the situation was brought about by a late-running MLB game that went past the closing time for their teller windows. Nevertheless, as with Wednesday’s golf lines, the damage, in terms of negative perception/publicity, was done.
And this isn’t even the first time there are legitimate “vig”-related grumblings, as the sportsbook also drew criticism for its steep MLB lines when it opened July 14.
When jumping into a brand new space, missteps are to be expected to an extent, and bound to happen. However, FD seems to be treading into more of “troublesome pattern” territory at this point, a far-from-ideal way to kick off an operation that has so many eyes on it.
The ease with which potential customers can make comparisons these days is creating a highly undesirable circumstance — it’s making FD’s odds of early success steeper than their own lines.
It won’t take but a minute of your time on an average day. Log on to a social media platform. Have a quick gander at some user comments regarding virtually any issue — irrespective of importance – being discussed.
You’ll come to a quick realization that:
- Listening to/considering a differing perspective is apparently some quaint old-fashioned notion that’s foreign to most.
- That old saying that opinions are like assholes? The connection between the two has never been stronger.
And most athletes with an online presence can provide expert testimony regarding the second point.
Athletes’ need for thick skin bigger than ever
The fact their performances play an integral part in the outcome of events that often ruin or make a fan’s entire day — hell, their entire week or entire month in some cases — has always made players an inviting target for either adulation or venom.
But they had it relatively easy in the rustic, pre-Internet age. Back then, they were effectively shielded from everyone but those in the stadium or arena in the aftermath of a stinging loss if they so chose.
That’s all long out the window, of course. And with the proliferation of real money-based fantasy sports contests over the last 25 years in particular – initially in the season-long realm, and in the DFS space within the last decade – it’s not just the team’s die-hard fans the athlete has to worry about hearing from online.
It’s actually those who have any type of financial skin the game most likely to get a bit testy. Over the years, that sample has naturally included those wagering with a bookie or offshore sportsbook.
That sports betting population is now set to progressively increase as more states legalize wagering. Accordingly, players associations are starting to do a bit of hand-wringing with respect to the wellbeing of their athletes in a legalized sports betting landscape.
NFLPA speaks up for athletes’ concerns about legalized sports betting
David Purdum of ESPN.com recently covered that development in depth. The NFLPA, along with the unions representing MLB, NBA and NHL players, were in attendance at the National Council of Legislators from Gaming States’ summer meeting last week. The NFLPA particularly made the case that athletes are concerned about what legalized sports betting could mean for both their public and private personas.
They also emphasized their role in “protecting” players in a legalized sports betting environment (although no one’s quite crystallized what exactly that entails or encompasses yet). And, they reemphasized that …ahem… like certain other entities that may or may not go by similar acronyms, the players unions aren’t looking for a cash payout from casinos, states, or anyone else.
The unions have a few reasonable points…
Even though it’s somewhat akin to blasphemy these days, I can see some validity in each of what could be dueling perspectives – that of the unions/athletes, and that of those who might be inclined to dismiss their concerns as overreaction.
First, to the athletes’ and their representatives’ point of view:
- Fans/fantasy players/bettors can and do insert themselves directly into an athletes’ digital periphery quite easily these days.
- That same segment also often has an unlimited supply of “keyboard courage”. They often won’t and don’t hold back…from the safety of their laptop or mobile device, of course.
- Irrationality, lack of civility and a few other undesirable behaviors toward athletes on social media are often proportional to the amount of cash someone has riding on an athletic contest.
- Consequently, NFLPA president Eric Winston’s comment in Purdum’s story that the “dehumanization of athletes” has long been on digital display each week after NFL games rings true.
- Athletes’ personal lives and whereabouts are more transparent in real time than ever before. Naturally, that’s in large part due to the players themselves oversharing at times. But the overriding point is, never has the general public had more resources and opportunity at their disposal to locate where an athlete might be on any given day/night.
All of those factors could, in conjunction with a virtually national legalized sports betting landscape (which won’t be a reality on that scale for several years at minimum), potentially lead to an uptick in postgame vitriol at best, and to a dangerous situation at worst.
Players unions certainly can’t be blamed for attempting to carry out one of their most fundamental functions – speaking up for the best interest of their clients. Given how the breakdown of civil discourse and behavior in many areas of society is increasingly the norm, there’s enough “there” there for player representatives to ensure athletes aren’t forgotten in a conversation that’s often been heavily weighted toward preserving game integrity.
On the other hand…
But from where the skeptic sits, there’s this:
- Sports betting on a massive scale has already been going on for decades.
- Sports betting is legal in the European Union and is a multi-billion dollar enterprise without widespread reports of athletes facing harassment from those on the wrong end of a wager.
- Not a great deal should change in terms of the public chastising athletes online; those who are already prone to do it will continue to. There won’t necessarily be some gargantuan cascade of new bettors that previously had never been on the losing side of a wager invading players’ Twitter and Instagram accounts overnight.
- In terms of physical/personal safety for athletes, these players typically have more than enough money, resources and common sense to not divulge where they’re going to be/are, to attain an enhanced degree of privacy when they do go out, and to hit the streets with security at their side if they actually feel at risk.
Given how long the leagues and the NCAA railed against legalized sports betting, there was bound to be a rocky acclimation period/fair share of misplaced concerns if it ever came to fruition. That’s precisely what’s transpired in certain circles in the last two months-plus since the SCOTUS’ decision to strike down PASPA.
It’s almost as if everyone forgets the leagues have thrived with remarkably few betting scandals despite illegal sports wagering being a perpetually pervasive activity.
A reasoned approach is the best bet
Hoping for the best and preparing for the worst is a prudent philosophy in many areas of life. When it comes to keeping the players’ welfare in mind as the games they play are increasingly wagered on, the unions certainly have a right and a role (although they’ll eventually have to figure out/clarify what exactly the latter is going to be).
Yet, there’s a thin line between prudent precaution and paranoia. Some of the misgivings and fears about legalized sports betting that currently run rampant will prove misguided over time.
Even as legalized sports betting progressively spreads, athletes are likely to be about as revered or despised as they’ve always been. And sometimes, both within the space of a single game. After all, fan fickleness is a tradition as old as plunking a few bucks down on a contest.
As for those online trolls that’ll insist on acting like a certain body orifice after a bad beat? In the social media age, “blocking” ain’t just for running backs anymore.
When discussing current technology, quite a few members of Congress come off as if they’re still living in an AOL world. Exhibit A – Facebook co-founder Mark Zuckerberg’s April interrogation on Capitol Hill.
Recently, the pro sports leagues – and increasingly, some colleges – seem to be walking a similar path.
They’re railing about the need for integrity fees to help them detect when shady characters with bad wardrobes approach their athletes in dark alleys about throwing a game or shaving a few points. Figuratively speaking. We think.
Meanwhile, they’ve been silent on a potentially pervasive problem, despite the fact it’s probably more of a hot-button issue than ever before – hacking.
Failing to acknowledge internal integrity weaknesses?
And it just so happens that digital security is a matter the leagues and schools have to fully own themselves.
There’s already rightfully been plenty of blowback about the demand that states subsidize efforts at preserving game integrity. The main objection often goes something along the lines of “how the hell do you not already have such systems in place?” The howls would only get louder if the leagues and/or universities were to argue they needed a few dollars for firewalls too.
The reality is that shortcuts and the widespread thievery of data is mainly accomplished through digital means in this day and age. Ask the DNC about that one.
Therefore, while the leagues are saying they need funding for a bigger, badder police force to guard the front door, they could be leaving the back way unattended. A recent New York Times op-ed by Craig Newman, partner and chair of privacy law practice Patterson Belknap Webb and Tyler, explores that very issue.
Digital security potentially the biggest challenge to game integrity
In the piece, Newman highlights the 2015 case of St. Louis Cardinals scouting director Chris Correa as an example of how cybercrime can manifest itself in the sports realm. Correa spent two-plus years tunneling into the Houston Astros database at will and gathering “competitive intelligence’ on the organization’s players before being caught, corporate espionage he’s currently serving prison time for.
Newman goes on to make a case for a potential uptick in similar digital misconduct as legalized sports betting becomes more widespread. Except in this case, it would be bettors or their tech-savvy accomplices doing the breaking and entering.
In his scenario, it’s computers of individual teams that are most vulnerable to malfeasance. Forget trying to sway the unpaid college athlete with a few bucks to fudge an outcome in some form. Instead, he envisions big money being wagered based on sensitive information such as a star player’s true injury status or specific game plans — data gleaned from the efforts of hackers that would make themselves at home in a coach’s laptop or a team’s database.
And Newman argues that one of the hottest new trends in sportswear – wearable technology — could prove to be even more of a goldmine for digital piracy. With access to the latest on an individual player’s overall physiological state heading into a game, a sharp bettor could potentially take his profits to the next level.
Leagues should reevaluate how they allocate policing resources
Some of that may come off as a bit far-fetched to those not quite up with the times. However, technology often moves at a pace way faster than our ability to fully grasp or keep up with it. If the leagues and colleges are genuine in their intentions to ensure the legitimacy of their contests in a legalized sports betting landscape, they’d do well to focus their attention where it’s likely to be needed most.
And these days, the path of least resistance towards a competitive advantage often isn’t through that dark alley – under the right circumstances, it goes straight through the digital highway.
Since the SCOTUS handed New Jersey a win in Murphy vs. NCAA on May 14, “abundance” has been a recurring theme:
- An abundance of celebration by stakeholders, lawmakers and sports betting enthusiasts over the verdict.
- An abundance of hand-wringing by a variety of entities opposed to gambling for any number of reasons.
- An abundance of rhetoric from the leagues about the need for compensation from the states for, essentially, the rights to bet on their games.
- And unsurprisingly, an abundance of half-truths, distortions and everything in between regarding doomsday scenarios involving widespread legal gaming and the integrity of athletic events.
Especially with college sports.
Two major Pennsylvania colleges unfurl their sports betting positions
Therefore, it wasn’t exactly shocking to see both Penn State and the University of Pittsburgh take advantage of a recent public comments period to lay out their positions on the forthcoming legalized sports betting landscape in the Keystone State.
What actually was somewhat unexpected – given some of the unnecessary hysteria that’s been seen in certain circles since the SCOTUS decision — is that Penn State’s perspective, in particular, is measured and rational to an extent.
The 163-year-old institution’s president, Eric Barron, penned a letter to the Pennsylvania Gaming Control Board (PGCB) in which the college asks for a period of time to get an internal structure in place to address the new gaming paradigm in the state.
From Barron’s letter:
“We are asking for the time needed,” he wrote, “… to initiate and strengthen our policies and procedures related to sports wagering in order to educate, train and protect our students, student athletes, coaches and staff members, as well as preserving the integrity of our colleges and universities and their associated athletic programs.”
He goes on to suggest that for the time being, Pennsylvania adopt New Jersey’s model for wagering on college teams housed within its borders. Namely, prohibiting bets from within the state on any athletic event involving a state school, irrespective of where said event transpires.
Barron does go on to also raise the well-traveled argument about the unpaid status of college athletes and the spread of legalized sports betting creating “an opportunity for inappropriate influence.”
While there’s plenty of room for debate about how much that will really change in a legalized environment – considering how many billions have already been bet illegally on college sports for decades, including in March Madness pools – there’s at least some corroborating incidents to support his view, i.e. numerous point-shaving scandals at the college level of the years.
Meanwhile, in her own letter to the PGCB, Pitt Athletic Director Heather Lyke initially comes off as even more reasonable – the school doesn’t even advocate a full ban on in-state wagers being placed on in-state college sports.
Integrity fees aren’t just a “big-league” thing
Yet you just knew there had to be a fly in the ointment.
In universities’ respective correspondences, we’re eventually treated to the big (and tired) plot twist we’ve already seen play out in a few states around the country – the two schools reveal they are likely to lobby for integrity fees to “cover the cost of enhanced educational and compliance efforts.”
In the wake of the SCOTUS decision, it’s come to light that institutions of higher learning and the pro sports leagues have one major commonality: They’re both pretty adept at trying to allocate other folks’ money. And without regard to pesky annoyances like profit margins to boot.
The two major Pennsylvania colleges thus become the latest entities with multi-billion-dollar annual budgets to try and make a case for at least partial subsidization of a mechanism that would help ensure its athletic events remain on the up and up. In doing so, they join corporations like the NBA and MLB in asking for a handout of a pie that would be down to mere crumbs by now if all of these requests were being granted.
Schools, like leagues, want states to fund their sports betting police force
The bottom line – yes, the spread of legalized sports betting could conceivably create a modest share of potentially dicey situations between bettors and student-athletes that compromise game integrity.
Yet the colleges need to hear what’s been emphasized to the pro sports leagues in states where their integrity fee requests have been rebuffed — there’s already been an endless flow of cash in play between Nevada, local bookies and offshore betting sites for many years. A substantial amount of that money has been bet on college sports.
And as is the case with the NBA, MLB and the like – if you don’t already have some sort of internal policing system in place with respect to game integrity, there’s something seriously amiss.
A request for a relatively brief grace period to get better prepared is one thing. It’s likely workable in a number of ways, too.
The attempted hold-up of the states to create what should have long been instituted — especially if the concern with the welfare of athletes is as real as the schools position it to be — is another matter altogether.
The esteemed Wall Street Journal has made its bones helping consumers the world over make sound – and legal — financial investments since 1889. Their latest “hot tip” — underground sports betting?!
Sort of. Earlier this week, the WSJ laid out a case for the survival of your local neighborhood bookie – and to an extent, offshore sportsbooks – in the face of the growing threat of legalized sports betting.
Avoid taxes! Hide potential winnings from your spouse’s divorce attorney! Bet on credit when you’re broke! Come one, come all!
Underground betting will feel the pain, over time
Yes, a bit facetious, but you get the picture. The position of some interviewed for the WSJ’s piece is that all the above factors will continue steering a fair number of bettors in states with legal options toward the black market.
Granted, local bookmakers are still going to see a share of action. After all, there’s a certain “legacy” component to their business. Consider the sheer number of decades that sports betting has been illegal virtually everywhere — these guys and gals often have an entrenched and loyal base.
Offshore books are a more recent phenomenon, of course. However, they’ve increasingly gained their own foothold within the betting market. There’s no denying the convenience of placing a wager from your office, the john or anywhere in between through a couple of clicks.
Let’s pump the brakes on the black market avoiding a decline, however. Sure, the molasses-like pace of legislation across the country is going to buy them plenty of time. It’s going to be years before a majority of the 50 states have legalized single-game betting.
Yet the drain on business as lawmakers progressively push legislation through will be real.
Legal sportsbooks have certain unique advantages
Yes, the anonymity of underground methods will continue reeling a certain percentage in. But legal sportsbooks offer their own set of advantages:
- Sportsbooks are attached to other amenities – casinos and racetracks – that serve as a draw and make placing a sports wager a multi-faceted experience. Additionally, sportsbooks offer an invigorating environment within which to sweat things out when one has skin in the game(s).
- Out-of-state visitors are exponentially likelier to head to a legal sportsbook. Not only won’t they be familiar with a local bookie, but they’re naturally looking for a trusted, regulated source.
- It’s safe to say that legalization will breed a certain and steady number of first-time/novice bettors. These consumers are also usually looking for a trusted source and peace of mind. Plus, they wouldn’t have a history with a bookie or offshore operator.
- Speaking of illegal online betting options, healthy skepticism still abounds regarding many of them. The WSJ’s piece even includes a hair-raising, albeit anecdotal tale of a bettor who was allegedly bilked out of thousands in winnings by Bovada, long thought to be among the most trusted online betting sources.
- And simply put, when it comes to money, especially large sums, security overrides almost everything for most.
Overzealous taxation could indirectly make legal options less desirable
However, there is one X-factor that legislators around the country would be wise to be conscientious of — the unintended but inevitable consequences of onerous tax rates and integrity/royalty fees.
It’s well established that among real-money gaming, sports betting isn’t exactly at the top of the heap when it comes to margins. Nevada sportsbooks retain only about five percent of total money wagered on average.
The fear that bookies and overseas sites could offer bettors more attractive lines and odds isn’t misplaced; legal sportsbooks would in fact be forced to offset excessive overhead over the long term by extracting more profit from the consumer.
Therefore, a tempered approach to taxation will be to the benefit of all parties. The states will naturally realize more tax revenue from sportsbooks the more customers patronize them. Bettors will flock to legal means more often than not if they have the incentive to. However, wonky lines will repel a certain number over time, likely driving them back into the waiting arms of those underground operators.
Because whether it’s Mickey the Collector or a sportsbook’s inflated money line, no bettor likes getting squeezed.