Category: curtshaw

America: the sports gambling gold rush (Part 4)

Another potential stumbling block for the gambling companies, lawyers and advisers say, could be opposition from Native Indian interests. Many tribal groups were granted rights to run casinos on their land in “compacts” with state governments in lieu of compensation for poor treatment in the past. Compacts are large multi-year deals that many tribes are loath to renegotiate in case states decide to raise their fees.

The managing director of Gambling Compliance said that the lobbying power of the tribes, could impact sports betting legislation in some of the US’s most populous states, including California and Florida, fearing a loss of their monopolies over gambling.

American sports tend to be long yet profitable. The potential for bets on minutiae such as the speed of a baseball pitch or the number of yards gained in football are endless. The popularity of in-play betting — known as “prop bets” in the US — has grown far quicker than many expected.

But divisions between the sports owners and gambling operators are already becoming apparent. League owners — like the National Football League, National Basketball Association and Major League Baseball — view sports as their intellectual property and are pushing for legislation to set minimum national standards on betting. They argue that they offer the sport and so should join in the proceeds.

Christopher Halpin, chief strategy and growth officer at the NFL, says only the federal government has the power to kill off the current offshore market.

In an ideal scenario the leagues would prefer a legal protection forcing the betting companies to pay them for responsible gaming standards and bans on certain types of bets such as whether a player will get burnout.

The five biggest leagues — for ice hockey, American football, baseball, basketball and soccer — generated total revenues of $40bn last year. Casino operators argue that by offering sports betting they are encouraging even more people to watch games. 

America: the sports gambling gold rush (Part 3)

Not everybody is welcoming the new arrivals. There have been grumblings from local employees in the back rooms of Las Vegas casinos. “There’s a lot of animosity against European bookmakers that think they can come in and know US sports,” says a sportsbook employee in Vegas, who described the market entrants as “arrogant”. Another says that when Sport betting app in New Jersey it did not label football “soccer” or call the NFL “American football”. Changes have since been made.

This month, Flutter announced a £10bn tie-up with Stars Group that would, if allowed by regulators, create the world’s largest online gaming company. The prospect of owning two of the strongest brands in the US market was a major driver of the deal, says Flutter’s Mr Jackson.

Members of the Chicago White Sox baseball team who were accused of deliberately losing the 1919 World Series, one of the biggest betting scandals in US history

But the golden opportunity is complicated by what Mr Blandford, now chairman of marketing company, calls “a spaghetti nest of legislation” as each state sets its own idiosyncratic rules.

Mississippi, for instance, allows mobile betting but limited only within casino grounds. New York allows sports betting activities but limited in only three selected casinos. Tennessee, which has no casinos, will be online only but with an upfront licensing fee of $750,000. In Rhode Island, wariness of betting is such that gambling executives have to answer reams of questions including whether they own a gun or get along with their mother-in-law.

Then there are the varied tax rates across the states, from 6.75 per cent in Iowa to 36 per cent of gross gambling revenues in Pennsylvania.

“The [legislators] have recognised that this is a great opportunity to gain additional revenue for the state coffers,” says Bill Miller, president of the American Gaming Association, from his office near the White House, adding that the thriving offshore market is “a common enemy for all”.

America – the sports gambling gold rush (Part 2)

His efforts were boosted by the emergence in the 2010s of daily fantasy sports games in which people choose fantasy teams across various sports but win points based on the real-life performance of the players. For many it was a way to take punts on sport in a legal grey area outside of PASPA’s reach.
DraftKings and FanDuel, the two biggest daily fantasy sports sites, came to the attention of regulators in 2016 after advertising by the two companies caused a backlash. Some asked whether fantasy sports was merely sports betting under a different guise but the companies successfully argued that fantasy sports are games of skill not chance and therefore did not constitute gambling. Their combined customer base of more than 13m players, however, showed that there was an appetite for the betting-like activity they offered.

The sportsbook at Monmouth Park is under the management of William Hill, the UK bookmaker which has had a presence in the US since it bought a Las Vegas counterpart for $50m in 2012. Late on a Saturday afternoon at the tail-end of the racing season, few punters are watching the horses. Yet the sportsbook — where they can bet on everything from basketball to golf — is packed.

FanDuel, bought by Flutter in the same month as the Supreme Court decision, and DraftKings have both launched full-scale sports betting websites and apps in New Jersey. According to figures from the New Jersey Gaming Board, the pair accounted for more than 75 percent of the total sports betting market in August. Total revenue from sports betting that month reach $25 million.

But that market lead is threatened by an influx of experienced European operators, equipped with the technology and keen to diversify away from highly regulated markets such as the UK and Australia. William Hill has worked with the casino group El Dorado to get the results of accessing to 15 states as they legalise. GVC, owner of Ladbrokes Coral, and Stars Group, the Canadian owner of SkyBet, have also done deals with, respectively, casino giant MGM and media company FoxSports, to enter the US.

America: the sports gambling gold rush (Part 1)

Estimation the size of this potential market vary wildly. Gambling Compliance, an research firm in gambling industry, values the market at up to $8bn in revenue during the term of 2024. If the American Gaming Association’s $155bn estimation of the illegal sports betting market is accurate, the valuation could be much bigger.

But as with any gold rush, the glut of fortune-seekers makes competition challenging and the depth of the mine is uncertain. European gambling companies last circled the US gambling market more than 15 years ago but had their fingers burnt when several executives being arrested for providing online sports betting into the US from entities bases in the Caribbean.

Mark Blandford, then chief executive of Sportingbet whose chairman Peter Dicks was one of those being captured in 2006, remembers being “totally shocked”. Sportingbet paid US prosecutors $35m to settle the case.

But for newcomers, it seems too good to be true. “It’s a once in a lifetime changing opportunity,” says Jason Robins, chief executive of fantasy sports company DraftKings, which owns the second largest share of sports gambling revenues in New Jersey. 
Since 1990s, Americans who wish to bet on sports in the US have had three options: go to the Las Vegas sportsbooks in Nevada, look for a local bookie in a bar, or bet via offshore websites.

The Supreme Court has fundamentally changed all that. Many in the industry say its 2018 ruling was the wonder work of one man: Dennis Drazin, a New Jersey lawyer who is also head of Monmouth Park racetrack in New Jersey. Looking to increase revenues in the state’s fast-failing horseracing industry, he found out that if Monmouth Park could host a sportsbook, punters would come. Mr Drazin fought a series of legal battles aiming to legalize sports betting in New Jersey on the basis that it should be a decision of the states, rather than the federal government.

The sports gambling gold rush in America (part 1)

Banned for decades, US betting is coming back. Strolling down the boardwalk in Atlantic City, New Jersey, you will find scant tourists look in vain for its Prohibition-era glory. After dark days following the 2008 recession, the town — its resorts and railroad — has new hope courtesy of the legalisation of sports betting.
There was few boardwalk’s oldest surviving casinos; one of which was the Hard Rock resort’s sportsbook — the US answer to a bookmaker’s shop but with big live sports screens and alcohol on sale — which opened to the public in June last year.

Atlantic City is the frontier city for a new American gold rush. The gambling hub of New Jersey was the first state to legalize sports betting after the US Supreme Court overturned a federal bill banning the practice in May 2018. Every host of European and American operators have since included sportsbooks in its casinos.

US sports such as baseball and football provide a wealth of statistics on which to bet
The mistrust of sport betting is buried deep in the DNA of many US states — a historical attitude that came along with fears of mob violence and corruption in sport. Increasingly stringent legislation was applied during the 20th century as match fixing and other scandals prompted public outcries. The 1992 Professional and Amateur Sports Protection Act outlawed sports betting in all but a handful of scenarios emerged.

The Supreme Court’s decision allowed the emerging of a fresh market, unhampered by the public and media clamour against problem gambling in mature markets in the Europe. Chief executive of major betting company described the opening up of the US as the most exciting development since the advent of online betting. A combination of increasing population size and the passion for sport could make it one of the most lucrative sports betting markets in the world.

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