Is sports betting in the US inevitable?

30th October 2014 8:25 am GMT
The leagues seem to have intensified their fight against sports betting but behind closed doors their stance has softened and some politicians are ready to legitimise sports betting.The New Jersey Senate has passed a bill repealing the ban on sports betting. To the uninitiated that might sound exciting but everybody knows this is just the latest move in a five-year battle that shows little sign of ending. One month ago the US Department of Justice joined the national sports leagues in their federal court motion to make damn sure New Jersey fails. Most investment banks are not even bothering to model for a legitimised sports betting market despite fanciful predictions about the future of online gaming in the US. “It’s not going to happen anywhere anytime soon,” one respected analyst told me. Attendees returning from G2E told me that nobody outside New Jersey really cares. However, there are other well-connected, trusted sources saying that the leagues might be fighting tooth and nail in public but behind closed doors they are starting to talk. Not necessarily with New Jersey. Quite frankly, they have whooped New Jersey’s backside almost every step of the way. One should give immense credit to Senator Raymond Lesniak, Governor Chris Christie and their lawyers for the staying power needed to keep hanging on in there.But no. For all its noise, New Jersey might not be the first to legitimise sports betting. It is seen as a rogue state by the leagues and they will continue to fight it tooth and nail. But there are conversations happening elsewhere - in California, New York and Washington DC to name just three - that might yet make sports betting a reality. “It won’t be easy but I have seen such a dramatic change in thinking,” says an insider. “There are a fair number of high level people who are starting to understand how much money is lost.” This has translated into talks. Initiatives are being discussed. Who is in charge? How much should it be taxed? “The biggest obstacle will be where it will be permitted and who has control over it,” says the same source. Will pro and college sports be included? Even New Jersey’s bill does not include college sports. However, if they are not included that leaves a pretty massive black market. “Ultimately, it will be included,” says the source with a bullishness that might make you think he is smoking crack. He’s not. I promise. While the NFL remains entrenched in its anti-sports betting position, it has been said that other leagues such as the NBA and MLB might be more amenable to negotiating. And lo and behold, NBA Commissioner Adam Silver steps out at a sports conference just last month and says it is “inevitable” that more states will be able to offer sports betting. However, his predecessor David Stern had made similar comments while publicly slamming Governor Chris Christie’s attempts to legalise the product in New Jersey. According to some, the NBA is not taken particularly seriously on this matter after the 2007 betting scandal, which saw a referee dismissed for betting on games he officiated. However, another with knowledge of the talks says: “There is an increased sensibility among people involved that the [prohibitionist] policy is not working.” Commissioner Silver is not the only person who realises that forcing punters to bet illegally amounts to little more than funding organised crime. Despite the Department of Justice joining the leagues’ latest suit against New Jersey, some claim that sportsbook prosecutions have not been high on the DOJ’s list of priorities. Sure, there is still the occasional high profile bust but only a fraction of the hundreds you saw a few years back.   It is hard to see a softening of the ice in the legal moves that have been made during the last few weeks. Indeed, there are powerful and well-funded figures in Washington DC who are not fans of gambling or sports wagering. People such as Senate Majority Leader Harry Reid, the Nevada Democrat who is supported by Steve Wynn and Adelson. However, with the mid-term elections approaching in November, Reid might not be majority leader for long. Lobbyists are predicting a burst of legislative activity after the mid-terms. “The grand solution - if there is one - will be to modify the Wire Act. That will have to include higher penalties and barriers for illegal operators. It has to be harder for people to access them.” Of course, Adelson used that kind of language - “strengthening the Wire Act” - in his crusade against iGaming. The pro-sports wagering camp point out that he failed. There was a lot of noise but no appetite for a clampdown. The leagues have watched the rise and rise of fantasy sports. Not only have they grown more comfortable with it, they fully understand the commercial value of the connection it brings with their customers. This is a fight about money far more than it is a fight about sports integrity, federal law or state rights. Pointing out the absurdity, the hypocrisy even, of the Professional and Amateur Sports Protection Act (PASPA) has been one of key planks of New Jersey’s strategy as it attempts to evade PASPA’s restrictions. If you were at the Sands Expo & Convention Center in Vegas for G2E you could wander around the stands and talk to executives about sports betting-related products from the likes of BetConstruct, Betradar, GTECH, Intralot Interactive, OpenBet and Sportech. You could wander next door to The Palazzo and find the palatial Lagasse’s Stadium. At Lagasse’s you can sit in comfort, order food from celebrity chef Emeril Lagasse and place a bet on whatever sports event happens to be taking place. You can then watch the action on any one of the numerous HD television screens while having a beer and cheering on your team. Lagasse's Stadium also offers CG Technology's mobile sports wagering application, which allows guests to place bets on sports from anywhere in the state of Nevada. All this is run by that scion of free trade Sheldon Adelson. Yes, the same Sheldon Adelson who has vowed to do whatever it takes to destroy online gaming…unless it’s in the state of Nevada of course, and run out of his hotels. Maybe, just maybe, some important people are beginning to come round.sah@gamingintelligence.com
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