From outside the United States, the current scramble to produce state legislation for sports betting looks a bit like the US has just discovered VHS video recorders. The rest of the world has long since moved on.
A quick scan of legislation proposed in various states looks like it was designed for the steam age. Where are the current big regulatory issues in gambling regulation; esports, virtual sports, in-game and crypto-currencies? Conspicuous by their absence.
Esports betting is the next next thing
The most popular esports are League of Legends (LOL), CounterStrike Global Offensive (CSGO), StarCraft 2 and Overwatch although there are many others which garner a large audience.
If any US politicians have noticed the existence of Twitch, they should have picked up that on June 24, Riot Games became the first channel to pass one billion views, almost entirely for broadcasts of their esport game League of Legends.
We'd like to extend a thank you to the viewers for helping the @RiotGames @Twitch Channel be the first one to surpass 1 billion views. We could not have done it without your loyal support ❤️ pic.twitter.com/2W69ix0CEJ
— lolesports (@lolesports) June 24, 2018
At a Nevada Gaming Policy Committee meeting chaired by Governor Brian Sandoval, Arthur Manteris, vice president of Station Casinos‘ sportsbooks made the simple statement:
“Gamblers make viewers, and viewers make gamblers,” adding that the viewing figures are: “Numbers the world has never seen before.”
Manteris has forty years experience of sports betting in Las Vegas.
Online esports betting still isn’t legal in Nevada, but it is available in casinos. New Jersey’s latest sports betting legislation includes what appears to be a ban on esports betting:
“A prohibited sports event includes all high school sports events, electronic sports, and competitive video games but does not include international sports events in which persons under age 18 make up a minority of the participants.”
Sports attorney Daniel Wallach told Compete that there was still some wiggle room and that the regulator could rule on a case-by-case basis to allow some esports betting. Nevertheless, it doesn’t look good.
Esports is experiencing triple-digit growth
Over the last four or five years, esports betting has been the fastest growing area of sports betting. Sports betting operator Pinnacle has seen triple-digit growth for the last five years.
— Pinnacle (@PinnacleSports) December 20, 2016
Narus Advisors and research firm Eilers & Krejcik Gaming have forecast that global wagers on esports will be $6.7 billion in 2018 growing to $13 billion by 2020. That’s a small but significant fraction of the global online sports betting market and it’s growing at internet speed.
Virtual sports are a closer complement to traditional sports. Using big data about players and team performance they enable virtual versions of traditional sporting fixtures to be played out.
Bettors can watch the matches with high-quality video game graphics, and even engage in in-game betting. Sports data firm BetRadar is one of the biggest names in the virtual sports betting business.
Here’s their 2018 promotional video showing the sports they offer as virtual products and the quality of the video graphics.
If you skipped the video, you missed the list of sports that they offer globally; soccer, basketball, tennis, horse racing and dog racing.
No hockey, no American Football, no baseball. This is the legacy of the federal ban on sports betting, the most advanced betting technology in the rest of the world has ignored the most popular US sports.
Nevada and New Jersey are two states where at least some virtual sports betting is allowed, the question is whether other states will follow when they pass their own sports betting legislation.
Skins, crypto & loot boxes
One characteristic of modern video games and esports is that the game developers monetize play by offering virtual goods for sale. These goods, such as weapons, armor, boxes with surprise contents (loot boxes) and other in-game advantages/enhancements can also be won by playing.
Collectively known as skins, they have become a de facto in-game currency, and can sometimes be used for betting.
The regulators of today need to define what counts as money for the purposes of gambling. The UK Gambling Commission has made a good stab at the problem. US regulators need to follow suit, especially with the proliferation of modern cryptocurrencies.
With everyone so excited about the legalization of sports betting, it’s easy for politicians to miss the fact that the industry is moving on into a virtual age. The legislation they produce risks excluding players and US businesses from an important development or at least leaving gamblers to the risks of placing their bets on the black market.
Leagues asking for an integrity fee from sports betting has been all the rage this year. Everyone wants their share. The arguments for “integrity” has been so poor that some leagues have switched to a more royalty-based fee. The leagues DGAF what the fee is called, they just want that money.
Leagues may have been first in line looking for a cut of the revenue from sports betting but more entities are stepping in. Leagues, teams, and casino operators recently shared their thoughts on the matter in Pennsylvania. They each spoke up about how revenue from sports betting should be divided.
The inclusion of specific organizations requesting a handout from gambling money went to another level in Pennsylvania. Not only did a professional sports franchise ask for some of the many riches derived from a fee for sports gambling in the state, but they asked for more.
The Pittsburgh Pirates have stated that they want their share of the integrity/royalty fee that Major League Baseball may receive. Fair enough. They went on to say that they also need more money from the state taxes to keep their stadium operational.
From the Pirates:
“Providing a professional sports product is a costly endeavor…The capital needs at PNC Park are significant and unfortunately are much higher than the current funds allocated to them by our landlord.”
“It stands to reason that a portion of the revenue collected from sports wagering should be allocated to the maintenance and capital upkeep of PNC Park and the other sports-related facilities in Pennsylvania which provide for sports wagering in the first place.”
You can see the full unedited letter at Legal Sports Report. Their 17-year-old gift of a stadium isn’t old enough to be considered a millennial. However, PNC Park could already be falling apart. On Wednesday night there was a little backlog in the Pirates dugout.
It was a little damp in the dugout tunnel at PNC Park tonight. Just a little. pic.twitter.com/zm12uxFz0F
— Tom (@Haudricourt) June 21, 2018
Oopsie! Someone done clogged up the drains inside the dugout leading to the Pirates clubhouse.
There’s no doubting that PNC Park is one of the most beautiful baseball stadiums in the country. The Pirates have been asking the state for funds to maintain the stadium for the past five to seven years. Despite being a profitable business, it probably makes sense that the state pay for upkeep since the residents of Pennsylvania paid to build the stadium.
The good news for the Pirates is that the Pennsylvania state tax on sports gambling is so high that there might actually be money available to them when sports betting becomes legal in the state. Of course, a sportsbook operator has to decide to take bets in Pennsylvania.
It might be difficult to make a profit with the potentially high tax and integrity/royalty fee. Right now, the tax rate proposed for sports betting is 34%. New Jersey, for comparison, has a tax rate for sports betting between 8.5% and 14.5% depending on how and where the bets are placed.
It’s too bad Phil Mickelson overshadowed the premium performance of Brooks Koepka winning his second U.S. Open in as many years. Mickelson committed a bizarre penalty during Saturday’s third round when he putted a ball a second time before the ball had stopped moving.
The infraction earned Mickelson a two-stroke penalty, but many believe he should have been disqualified, including PGA Tour pros. And of course, the USGA’s decision to allow Mickelson to continue his round affected tickets for interested sports bettors around the world.
This left many asking: why wasn’t Mickelson disqualified for his intentional act and rules violation?
The putt heard round the world
The incident came on the 13th hole on Saturday when Mickelson hit his bogey putt well past the hole and it appeared destined to roll off the green. Rather than wait to see where the ball might end up, Mickelson ran after the ball and hit it again as it was still moving.
Phil made a 10 on the 13th hole after being assessed a 2-shot penalty for hitting a moving ball. pic.twitter.com/8QGqJIlV49
— PGA TOUR (@PGATOUR) June 16, 2018
Mickelson was assessed a two-stroke penalty for the infraction and took a score of 10 on the hole. The USGA cited Rule 14-5:
But in citing Rule 14-5, the USGA superseded Rule 1-2.
Rule 1-2 comes with a provision that would have allowed Mickelson to be disqualified if the action were deemed to have gained him a “significant advantage.”
The USGA said Mickelson was given a penalty for violating Rule 14-5, but not Rule 1-2, because, “He didn’t purposely stop or deflect the ball.”
Well, that’s such a poor explanation and excuse for not enforcing what should have been a disqualification. Mickelson later acknowledged that he intentionally hit the moving ball because he didn’t want it to roll off the green. He apologized for his actions on Wednesday.
Ruling impact on golf betting
I had a number of betting interests in the tournament match-ups, including a small slice on Mickelson over Tiger Woods. When Tiger missed the cut and Phil made it to the weekend, Mickelson was declared the head-to-head match-up winner.
According to Nevada sports book house rules:
IF ONE GOLFER CONTINUE PLAY AFTER HIS OPPONENT HAS MISSED THE CUT, WITHDRAWN (WD) OR BEEN DISQUALIFIED (DQ), THE GOLFER WHO CONTINUES PLAY WINS HIS MATCH-UP
But what if Mickelson was in contention to win the tournament? What if Woods had made the cut? There could have been many wagering interests and potential live-betting situations involving Mickelson.
A rules violation can have an impact on wagering results. Recall when the USGA made a ‘big bogey’ according to USGA CEO Mike Davis when it penalized Dustin Johnson one stroke during the 2016 U.S. Open on a murky new rule that was revised to help players who were grounding their putters while addressing the ball. The USGA’s delayed enforcement created a fiasco.
At the 2010 PGA Championship with the PGA officials, Johnson was issued a controversial two-stroke penalty on the 18th hole Sunday in what was one of the most bizarre rules gaffes in decades. Johnson was ruled to have grounded his club in a bunker, but it was more like dirt and a waste area that the crowd had been walking on and standing in during the tournament. Needing only a par on the final hole to win, the penalty cost Johnson the golf tournament.
What about integrity?
In September 2017, the PGA implemented a new integrity program to “protect its competitions from potential outside influences related to gambling.” Then PASPA went to the Supreme Court in December, and the federal sports betting ban was struck down in May, allowing for all states to launch a regulated sports betting market.
In considering golf wagering for the future and the potential impact of ‘integrity fees’, how will the PGA handle these types of situations with a royalty being collected by the PGA for all the golf wagering during their tournaments? The PGA issued a statement on regulation saying that it’s the most effective way of “ensuring integrity in competition, protecting consumers, engaging fans and generating revenue for government, operators and leagues.”
But when these strange occurrences surface like the Mickelson mistake and even more money is at stake, will bettors be the ones sending complaints to the PGA offices?
Everyone has a Chad in their friend group.
Chad, always one to impress with how he met one of Drake’s security personnel at the club last night, albeit met with a tinge of skepticism from the group.
Always continuing to one-up stories by making his case with ridiculous claims of now having an in for a party with Drake, now met with eye rolls and scoffs.
Always one to impress
At one time, the Keystone State was considered one of the odds-on favorites to first introduce regulated single-game wagering outside of Nevada.
While New Jersey was carrying the load in the US Supreme Court case, Pennsylvania lawmakers in October 2017 passed a gaming expansion bill that included legalizing PA sports betting. On May 14, SCOTUS ruled in New Jersey’s favor, striking down the Professional and Amateur Sports Protection Act to clear the way for regulated wagering.
Now, more than a month later, like a mourner at a wake, PA is on the outside looking in. Although really, Pennsylvania might as well be in the casket. And with the rope in the study, it was the state’s lawmakers that put it there.
It was that group that decided to get all Ottoman Empire on a still-unborn industry by proposing a head-spinning 36 percent tax – 34 percent to the state, 2 percent to local coffers – on gross sports betting revenue. Yes, that is in fact gross. That rate is on top of an up-front $10 million fee just for properties to obtain a sports betting license.
Always making a case
If casino and sportsbook operators were hesitant with just the tax rate – which would stand as the highest rate in any jurisdiction in the world – they’re folding their cards at $10 million before even seeing the flop.
Hollywood Casino spokesman Eric Schippers told Penn Live in May that Pennsylvania “has strangled the goose on this one.”
The state has done more than that, as it has plucked the feathers and started preheating the Traeger – all while trying to call the bluff of potential licensees.
“I think they will all participate and would be shocked if they didn’t,” Pennsylvania Rep. Robert Matzie told the Pittsburgh Post-Gazette earlier this month. “In sports-crazy Pittsburgh and sports-crazy Philadelphia, you’re going to see it bring a lot more people into the casino, watching the big-screen TVs, and when they get those people in the door to bet they’ll also hopefully drop money at the tables or in the slots.”
Always standing steadfast, driving himself out of the group
The state has not wavered from its proposed regulations, which the PA Gaming Control Board published last month. Pennsylvania, though, is welcoming public comments on said regulations.
And in a twist, it has been one of the very sports leagues that took New Jersey to court over PASPA, one of the same leagues that were laughed and shouted out of the room when meeting with Jersey lawmakers for possible integrity fees, that are speaking out on the state’s rates and fees. (For perspective, neighboring New Jersey will tax in-person revenue at 8.5 percent at casinos and racetracks, online casino revenue at 13 percent and online track revenue at 14.25 percent; Nevada has a 5-percent tax rate.)
In a letter from the NFL: “Finally, we would like to share our concerns that the statutory operator licensing fees of $10 million and the 34 percent tax rate on gaming revenue may render legal market participants unable to effectively compete with those in the illegal market.”
Granted, many of the other leagues and teams chimed in for integrity fees, more universal regulation or for outright prohibition of sports betting. Still, when the NFL – sitting on its throne while the Jeff Rosses of the world roast it – provides some insight into PA’s ridiculousness, that should be cause for concern.
Nothing is set in stone just yet for Pennsylvania sports betting. In fact, it does not appear anything will be until later this year or even into 2019.
Chad is not one to tell your group of friends that he has been wrong. But perhaps an intervention from that group – the leagues, casinos, track operators, and sportsbooks – can set Chad straight.
In case you missed the news out of the Garden State this week, here’s a quick rundown:
- New Jersey passed a sports betting bill on Thursday.
- The bill states that Golden Nugget can open a sportsbook but cannot take NBA bets.
- Bill must be signed by Gov. Philip D. Murphy before any bets are taken.
The previous version of this bill made us question whether the Golden Nugget would be able to operate a sportsbook. Well, the most recent version of the bill was revised and the Golden Nugget will be able to operate a sportsbook. That’s the good news.
The bad news is that the Golden Nugget cannot take wagers on NBA games. The issue with Golden Nugget owner, Tilman Fertitta, owning the Houston Rockets is still seen as a conflict. This is potentially a huge blow to the south New Jersey casino operator.
Basketball has strong roots on the east coast and the NBA is one of the most popular professional sports leagues in America. All basketball (including college hoops) is second to the NFL in handle in Nevada sports betting. While the two states may not be apples to apples, the potential for basketball betting revenue in New Jersey can’t be overlooked.
Basketball is big business for Nevada sportsbooks
Together, college and pro basketball have historically been one of the biggest winners for sportsbooks in Nevada. According to UNLV Gaming, sportsbooks actually won more money in 2017 from basketball than any other sport. Last year college and pro basketball win for sportsbooks were $87,431,000 while football (college and pro) was $76,896,000. Basketball accounted for slightly more than 35% of the win for sportsbooks last year.
Football was the leading sports for Nevada sportsbooks in win percentage from 2012-2016 so this could be an anomaly. It could also be the beginning of a trend as the NBA and March Madness are more popular than ever. The consolation prize for the Golden Nugget is that they can still take wagers on NCAA basketball.
NBA and 76ers on the rise
Sports betting should be a little different in every region and in every state. Football may always be the most popular sport for gamblers but basketball could be a little more popular on the east coast than Nevada. In addition to regional preferences, Atlantic City and much of southern New Jersey is considered a sports suburb for Philadelphia sports teams. TV’s are always turned into 76ers, Phillies, Eagles, and Flyers games.
The 76ers are one of the hottest up and coming teams in the NBA and the Golden Nugget in Atlantic City will certainly miss not being able to book their games. In addition to being close to Pennsylvania, New Jersey also borders New York City. Until both states legalize sports betting, New Jersey will be the only legal game in town. While Atlantic City isn’t considered a New York sports market, they certainly have Knicks fans visiting frequently. We’d be remiss if we didn’t mention the 4,500 Nets fans in Brooklyn that could also be visitors. The Golden Nugget will certainly miss out the action from those three teams alone.
Alternative football leagues have garnered a well-earned reputation as a fool’s errand over the last several decades.
The recently announced Alliance of American Football (AAF) could ultimately prove an exception to the rule. Legalized sports betting — a potential magnet that predecessors like the AFL, USFL and UFL couldn’t reap the benefits of — is poised to play a part in that.
AAF coming off as organized, progressive
To be clear, the AAF has already laid out what appears to be a rock-solid foundation in an operational sense:
- The league has snagged a pair of notable TV partners, CBS and CBS Sports Network, for its inaugural season.
- It boasts a management structure replete with respected names, including former Buffalo Bills and Carolina Panthers general manager Bill Polian.
- It plans to play with a manageable eight teams – five in non-NFL cities – over a 10-week period during the football-barren spring.
- It’s contracted a slew of head coaches that pack solid name recognition, including Steve Spurrier, Mike Singletary and Mike Martz.
- It includes several rules designed to speed up and/or make the game more exciting, including limited coach’s challenges, a shorter play clock and two-point conversions in lieu of extra points.
- And perhaps just as important, it’s co-founded by Charlie Ebersol, who’s made no bones of his intentions to make fan integration – a large part of it via mobile technology – a pivotal part of the AAF experience.
League’s planned fantasy product projected to have sports betting-like format
The final point partly alludes to the AAF’s plans for its in-house fantasy product. Notably, the AAF’s planned mobile app will not only stream games free of charge – it will also reportedly include “a fully integrated fantasy experience, where you can play while you’re watching”, according to Ebersol.
Taken at face value, it sounds as if the AAF is primed to offer the fantasy equivalent of in-game prop betting. That model is currently being deployed with varying level of success by operators such as Boom Fantasy and Fanamana’s InGame Fantasy. However, as a proprietary offering of a professional sports league, it would seemingly qualify as a first.
Embrace of new landscape would be a prudent move
And if the AAF is already thinking outside the box with respect to fantasy football, what’s to say it won’t cozy up to sports betting in some form or fashion?
An AAF-sponsored sportsbook is a bit much. However, an embrace of the new legalized sports betting landscape — one that includes information on lines and props being disseminated on the league’s broadcast and digital properties — is perfectly plausible.
After all, the inevitable media avalanche of sports betting content has already started rolling downhill:
- Brent Musburger’s Vegas Stats and Information Network, a pioneer of sorts, launched more than a full year before the recent landmark SCOTUS decision.
- ESPN then waited all of about five minutes after the eradication of PASPA before kicking off “I’ll Take That Bet” — featuring prognostications from several experts — on its streaming platform, in conjunction with the Action Network.
- The NFL consented to sports betting content having a prominent presence on network pregame shows for years when the activity was illegal; it only stands to reason that type of content will be exponentially pervasive now that the ban has been obliterated.
AAF’s timing may be particularly fortuitous
The ability to put some skin in the game has long been proven to enhance the viewership of a variety of sports. Nevada-based wagering and illegal betting have both corroborated this over the years – especially with football. And more recently, daily fantasy sports and its often-mammoth jackpots has also moved the needle of fan interest.
The fact the league is partly headed by an apparently forward-thinking 30-something in Ebersol doesn’t hurt, either. Given his age, he’s undoubtedly fully in the loop with today’s technology and media consumption trends – the AAF’s aforementioned plans for its fantasy product clearly bear that out.
And their apparently keen awareness of what appeals to the modern fan is likely to lead to a healthy relationship with legal sports wagering – a very good bet for a league trying to beat some steep odds.
After all, there’s nothing like being able to plunk down a few bucks on whether Singletary will fire up his squad by shedding his pants to keep eyeballs on the product.
Image courtesy of Alliance of American Football
Most experienced sports bettors in the United States know what they can and can’t bet on. However, we’re the exception. Believe it or not, most citizens of this country haven’t gambled on sports because legal sports betting hasn’t been easily accessible.
The mainstream sports media falls into the same category as the mainstream population. They’re often uneducated and ignorant to how legal and illegal sports betting operates. This will change as states legalize gambling.
In the meantime sportsbook staffers like Jeff Sherman at the Westgate in Las Vegas still have to explain what kind of betting is legal in the U.S.
re: 2018-19 NBA Title … we are not permitted to offer odds where LeBron might end up, so at this time it is reflected in next year’s title odds … there will be drastic changes to these after free agency (ie if LeBron does not go to Phi, Bos would then be the East fav)
— Jeff Sherman (@golfodds) June 3, 2018
This tweet was made during the weekend but the mainstream media DGAF. Even national radio host Colin Cowherd, who brings sports betting “experts” on his show regularly, mentioned the odds of LeBron James going to another team as “odds from Vegas.” Someday he’ll understand that all sports betting odds aren’t generated in Las Vegas.
Offshore sportsbooks can offer proposition bets on just about anything they feel like offering. The Nevada Gaming Control Board has very tight regulations on what we’re allowed to wager on in the state. Other states that legalize gambling should have similar oversight.
Mainstream media needs to get their shit together
Ever since PASPA was struck down the mainstream sports media has decided to talk sports betting more frequently. There are some very knowledgeable people on the subject spreading the good word. However, they are few and far between. Talking heads on TV and podcasts and writers for websites are trying to discuss a topic that they don’t understand. Al Leiter is not helping MLB or MLB Network with ignorant statements like this.
— Meg Baker (@megbakertv) June 4, 2018
The hosts of these media outlets now have to discuss a topic they’ve spent little to no time researching. National radio shows still use offshore odds and point spreads and refer to them as being from “Vegas.” This creates confusion for listeners and reader who really want to know the information they can bet on.
American sports betting odds go local and mainstream
Las Vegas has always been the origin of sports betting odds in America. In recent years, the Westgate has done a great job being the point of origin for a lot of the information shared on ESPN and other networks. That could change and customers should be able to find sports betting information originating in the United States from multiple sources.
Sports betting information news should start to be distributed locally and regionally. Local media will be able to see information from the sports betting outlets in their area. Delaware media will likely tout local sportsbook operators instead of the number originating in Las Vegas and off-shore. This creates more meaningful news content for their viewers and readers.
Whether you like the way they do business or not, William Hill does a great job sharing their news with the media. Will Hill should be the first sportsbook operator in New Jersey and will take their PR stylings to the east coast. Media in New Jersey, New York, and Pennsylvania will be educated on sports betting, in part, by William Hill.
The other incoming sportsbook operators coming to New Jersey do a poor job marketing their sportsbooks in Nevada but that could (and should) change with the large east coast betting population. It appears as though Jay Rood from MGM Resorts International will be licensed in New Jersey in time for legalization. Expect this Nevada bookmaker to share his knowledge on the betting sports as well.
The future of sports betting in media looks bright
Most of the mainstream sports media today grew up without gambling on sports or having access to point spreads, betting options, and general gambling news. There’s a bit of ignorance with the mainstream public about sports betting. If sports fans were curious about gambling they would have to learn from an illegal subculture or find information generated from Las Vegas.
The future will have more sports fans educated on sports betting. The information will be more accessible around the country. Whether the information is gained from local sports media or national sports media there should be a better understanding of sports gambling.
Today we have to listen to people like Leiter hypothesize about driving around New Jersey to make $500,000 in bets. Tomorrow we should see a new generation of media talking heads that will grow up with legal gambling accessible. This should make for a more educated media.
Oh, Jay Kornegay. You had the chance to slam the door on an absurd proposition. And instead you answered as if you were grocery shopping with your 6-year-old son and he asked for a Costco-sized crate of Fruit by the Foot.
Maybe you were taken by surprise.
Two weeks ago, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act to clear the path for legalized sports betting across the nation. The focus has been on developing regulatory frameworks in states that are moving forward with legislation, such as:
- The taxation of casinos that will offer sports betting
- Paying the laughable “integrity fees” to professional leagues
Certainly betting on high school sports was never a thought for sportsbooks and oddsmakers.
That is, until Kornegay was knee-buckled by a curveball.
Will people soon be able to bet on high school sports?
The answer should have been simple: “LOL, OMG, NO! *cackling emoji*” However, Kornegay, vice president of race and sports operations for the Westgate Las Vegas Sportsbook, took … um … let’s call it a different approach.
“We don’t take bets on any amateur events outside of college events, and that would include high school sports,” Kornegay said.
That’s right. Stand your ground, Kornegay. Tell your son that 1,200 packs of Fruit by the Foot is ridiculous and unwarranted. Strike him down, don’t leave the door open for anything.
Unfortunately, Kornegay was not done, adding: “I don’t see the need.”
COME ON, J-KORN! You basically just asked your 6-year-old to provide an argument for that box of fruit snacks large enough to imprison Hannibal Lecter. Here, let me be your Hooked on Phonics and give you a read on the situation.
Should there be betting offered on prep sports?
There is no need for wagering on high school athletics. Hence why Kornegay didn’t “see” the need.
While other states are rushing to pass legislation to regulate sports betting, Nevada entered Friday as the only state that allows single-game sports betting. And even the Silver State has gaming laws that specifically prohibit sportsbooks from offering wagers on prep sports. Nevada has the industry template that 19 other states that at least have a draft of a bill have used as they shape their own gaming regulations.
Certainly some people have expressed concern over the decision of SCOTUS to allow for states to legalize sports betting. They fear gambling addictions, for example. A recent poll by Fairleigh Dickinson University showed that some were even worried it would open the door for increased organized crime.
Still, there is some overreaction – and overreaching.
“I am concerned with this court decision and where it may lead,” Bob Gardner, executive director of the National Federation of High School Associations, said in a statement. “Our past contains instances of wagering on high school games illegally. If that now becomes legal, does the pressure on our coaches and student-athletes grow? Maintaining the integrity of all sports is critical to the system at every level. If we think the high schools are immune to this, we are not seeing clearly. We ask that states do not include wagering on high school athletic contests in any sport as part of any legislation going forward.”
Even Bill Bradley, a two-time NBA champion with the New York Knicks (yes, they were once really good) and former New Jersey senator, is fretting. Though he may be a tad biased. After all, the federal ban ruled unconstitutional by SCOTUS is also known as the Bradley Act.
“I think the game will be corrupted,” Bradley said. “Do you really want to go to your son’s high school basketball or football game and see people in the crowd who are betting, who are not rooting for your child to win or lose, but are betting on a spread? It’ll be pervasive. It is destructive. But again, it’s the Supreme Court making a decision on very narrow grounds.”
Listen in: TheLines Podcast also hit on the topic of high school sports betting.
Purity of youth sports will prevail
Everyone take a deep breath. Find your zen. This is not happening any time soon – if at all.
Yes, there are offshore books that accept bets on Texas high school football games. But by no means is that is not a foundation from which to build an industry. So take it easy. Talking to you, USA TODAY High School Sports:
“(If) those lines are used by local illegal bookies to take wagers on high school games, why shouldn’t states allow official betting houses accept them and thereby implement some measure of discipline and regulation? There might even be a revenue share to be had for the state governing bodies (and potentially schools themselves via the state organizations).”
Nope. Oh, how quickly states would hang up the phone if this proposal came calling, like Spurs coach Gregg Popovich in a postgame interview.
Of course, there is already some corruption in youth sports, what with sneaker companies steering AAU basketball players toward certain colleges and agencies. But it’s still youth sports. If ever there was an organization that ACTUALLY cares about protecting the integrity of sports, it’s each state’s high school athletic association.
You fear gambling addiction because the public will soon be able to bet on professional and collegiate sports? Allow wagering on high school sports, which will never happen. Because state lawmakers and sportsbooks already know the dystopian outcome.
So, Jay Kornegay, let’s give you a mulligan: Will people soon be able to wager on high school sports?
“LOL, OMG, NO! *cackling emoji*”
Why do we care what a disgraced NBA referee has to say about the future of legal sports gambling? Good question. But we’re getting lots of reaction from Tim Donaghy anyway.
Illegal sports betting got Donaghy booted out of NBA
Donaghy suddenly resigned from the NBA in July 2007 after refereeing 792 games, a development that was inexplicable for all of about five minutes.
Shortly thereafter, it would be revealed that he had wagered tens of thousands of dollars on NBA games – including those he’d officiated in – and had frequently passed along confidential information to bookies. He’d also taken the extra step of deliberately making calls that affected betting-related outcomes after allegedly being threatened by the mafia.
Ultimately, Donaghy served 15 months on counts of conspiracy to commit wire fraud and transmitting betting information through interstate commerce. Needless to say, he never donned a referee’s uniform again.
Plenty to say about advent of legalized wagering
But get this. In his “second life”, Donaghy now makes a living out of the very activity that booted him out of his previous career – sports betting. Along with business partner and seasoned sports bettor Danny Biancullo, he runs Refs Picks, a handicapping service poised to grow exponentially in a legalized landscape.
Despite his checkered past with sports betting, he had some salient points to make in the wake of the SCOTUS decision:
- Now that sports betting has a chance at widespread legalization, leagues will do everything to take a piece of the pie.
- The SCOTUS decision was the right one, as a path to legalized sports betting was “long overdue”.
- The NBA was laying out a shrewd public relations strategy by jumping out in front of all the other sports leagues in their support of sports betting. As a result, they believe they have a bit of moral high ground when it comes to trying to profit from it through integrity and data licensing fees.
- He labels integrity fees as hypocritical while echoing the main critique of such a demand – that the leagues should have been policing their game all along.
NBA contradicting itself in policy and actions, Donaghy opines
There’s more than a trace of disdain for certain aspects of the NBA’s conduct in Donaghy’s comments. It’s not only his aforementioned critique of the league wanting to be paid for monitoring their own sport; it’s also how he sees the preoccupation with integrity contradicted by their handling of game officiating:
- Donaghy insists referees are still making calls “based on the names on the front and back of jerseys” the majority of the time.
- Moreover, while he doesn’t necessarily feel refs are directly instructed to extend playoff series with their calls, he’s confounded when those that make erroneous, game-changing calls are rewarded by being advanced to the next postseason round.
Missing the mark on future betting habits, college athletics
Donaghy’s points as described thus far appear reasonable and progressive when it comes to legalized sports betting, the fallacies behind integrity fees and even how NBA officiating can be far from unbiased at times.
However, he also seems a bit off center in a couple of his other perspectives.
- Donaghy’s stance that underground bookies will still enjoy robust business runs counter to the prevailing view, including those espoused by career law-enforcement professionals.
- Donaghy labels tax-free winnings as a great motivator for bettors to continue utilizing elicit means to place wagers. However, he appears to greatly underestimate the allure of the reliability that a legalized sports betting entity can offer, especially to novice bettors. There’s also the considerable ease and convenience of placing a wager from one’s mobile device, something that will eventually be a reality in a substantial number of states.
- And Donaghy also hints at falling prey to a dubious view that has somehow garnered at least a modest foothold since the SCOTUS decision – that college sports in particular will now be more susceptible to a betting scandal than ever before.
In regards to the potential college sports scandals, Donaghy puts forth the possibility of an athlete getting themselves into financial hot water via online poker or similar activity, and then fixing a game at someone’s behest in order to get themselves out of a bind. The fact that there will be “more avenues to gamble” is part of Donaghy’s reasoning.
To begin with, many states considering sports betting legislation – including New Jersey – are taking steps to restrict wagering on college sports in particular.
Not to mention, anyone who’s sounded the alarm about how college athletics will be inevitably tainted with the advent of legalized wagering has yet to explain how immense amounts of money bet illegally for decades has failed to lead to such a result on a grand or frequent scale.
On this last point, considering what ultimately led to Donaghy’s downfall, “projection” might come to mind.
To the rest of the country, Florida often seems to march to the beat of its own drummer. Yes, things admittedly do tend to stray from the norm in the tropics. That could well hold true for the prospects of legalized sports betting as well.
Other states enjoy a much more straightforward path to passing sports betting legislation. Jurisdictions without a tribal presence certainly have one less hoop through jump through. Those whose legislators have the full authority to expand gaming options within the state have an advantage in that regard, as well.
Florida has a unique set of challenges
Predictably, the situation is more complex in Florida.
- The existing compact between the powerful Seminole Tribe and the state is one factor. The Seminoles have rights to cease their $19.5 million monthly payments to the state if legislators vote to expand certain forms of commercial gaming.
- Another wild card is Amendment 3, set to be voted on in November. While passage will require a supermajority of 60 percent of voters, there’s plenty of money behind the initiative. Disney and the Seminoles alone have laid out more than a combined $16 million as of mid-May to back Voters In Charge, the political action committee spearheading the effort.
Amendment 3, if passed, will put proposed future expansion of any activity that falls under the definition of Class III gaming in the hands of voters. According to a 2007 legal opinion issued by then-Florida Attorney General Bill McCollum, “any sports betting and parimutuel wagering including but not limited to wagering on horse racing, dog racing or jai alai” is classified as Class III.
Interestingly, the text of Amendment 3 specifically exempts pari-mutuel wagering on horse racing, dog racing or jai-alai from the type of activities it seeks to place under future voter control. However, it makes no mention of sports betting. There may be a legal gray area there as a result, but testing it would likely be an arduous and expensive process.
What’s legalized sports betting’s clearest path?
That begs the question – are sports betting’s chances for future legalization in Florida better served by the passage or failure of Amendment 3? Through layman eyes, it’s close to 50/50.
- On the one hand, Florida legislators have in the past often moved at a molasses-like pace when it comes to expansion of gaming in the state. The necessity of ensuring tribal compacts aren’t run afoul of admittedly bogs down such efforts at times.
- Conversely, if left solely to voters in terms of a “yay” or “nay” on legalization, matters might unfold a lot more efficiently. And public perception would play a pivotal role in this scenario. While sports betting may be lumped in with several other forms of casino gaming by legal definition, it seemingly has its own niche in the eyes of the masses.
Many who might stay away from and oppose the proliferation of slots, poker and the like have nevertheless placed a friendly wager or three on their favorite team, or on the Super Bowl. A certain percentage have undoubtedly sunk some cash into March Madness pools with friends or co-workers. Quite a few may be passionate season-long and/or daily fantasy players that are already used to having a financial interest in the games they watch.
And naturally, there’s always more than a few who actively patronize a local bookie or offshore sportsbook.
Therefore, if it comes down to either lawmakers or voters forming enough consensus to pass a measure first, I’m probably leaning toward the latter in the case of sports betting legalization.
An expert opinion on Florida’s sports betting’s current legal landscape
Sports law attorney Daniel Wallach has a wealth of experience with respect to gaming regulatory issues in Florida.
Unsurprisingly, he holds a multitude of opinions on the multiple moving parts at play with respect to the future of legalized sports betting within the state:
- Wallach feels sports betting’s path of least resistance is through the legislature, as opposed to being left to voters under a scenario where Amendment 3 successfully passes. Under that framework, not only would any proposed legalized sports betting measure have to meet a certain threshold with voters to pass, legislators would then have to agree on a regulatory framework, tax rates, licensing fees, etc.
- Wallach sees Amendment 3’s chances of passing as relatively bleak anyhow, as the required bar of a 60 percent supermajority is a high one to meet.
- Eventually, Florida is likely to feel a certain amount of pressure to legalize sports betting if an increasing number of neighboring states pass legislation. The state also loses significant amount of money in both tourism dollars and tax revenue from gaming operators from this point forward with every passing year it fails to legalize sports betting.
- Sports betting is much more widely integrated and accepted in society than other forms of gaming (i.e. poker, slots) and has “passionate fandom” as an underlying foundation that other gaming activities can’t quite claim.
- The usual stagnation with regards to gaming expansion among legislators will eventually reach a tipping point; there are too many potential stakeholders in the state and too much money to be made all the way around for sports betting to be put off for too much longer.
- Consequently, a window of 3-to-5 years is likely the time frame within which we see sports betting become a reality in Florida. The caveat to that prognosis is whether Amendment 3 succeeds, which potentially makes passage of future legislation more cumbersome.