The focus was on sports betting at the recent Global iGaming Summit & Expo 2018 in Miami. Scott Butera, former commissioner of the Arena Football League, told an audience he witnesses the growth of sports betting every time he attends the National Hockey League’s Golden Knights games in Las Vegas. “You see people walking around with their phone and betting during the game,” Butera said.
He noted the leagues are merging sports betting with emerging trends. “If you look at the next generation, millennials, and what they like to see, it’s no longer all about taking a pilgrimage to a giant outdoor arena and sitting there for four hours, watching a game and going home and having beer and hot dogs along the way.”
Butera said sports betting builds more excitement for fans and teams, and that drives viewership and advertising dollars which help to enhance the value of the franchise. He recommends building partnerships. “I think it would be good for operators, for states and, I think for the leagues and teams. They would do well in a number of different ways.”
Minnesota state Rep. Patrick Garofalo said sports leagues are starting to pay attention to the economics of the sports betting industry, but their demand for a 1 percent integrity fee on all handle isn’t feasible. He pointed out sports books in Nevada make about 5 percent on sports bets. “That’s the shiny object. It was pretty clear that asking 1 percent on the gross handle showed they didn’t understand the economics,” Garofalo said.
He stated he was approached by one unnamed league that did not want casinos to be able to take bets on second-half wagers. The league wanted control over in-play wagering and its licensing and content. “There’s a delay in the satellite feed, and they want to own that content. As we go forward, you will see less focus on the integrity fee and more focus on in-play betting. The leagues want to be the owners of the content and the only providers because it’s in their stadium, and they supply the information that decides the wagering.”
Foxwoods Executive Director of Online Gaming Seth Young commented, “That’s definitely stupid.” Young noted the technology has caught up to the speed of the games, and there is no issue with casinos running in-play sports betting. There’s even the option of shutting off the application. He noted someone betting at a stadium does not hold an advantage.
Young said the key to the U.S. sports betting market will be converting the black-market players, but that will be difficult. “You are creating a structure. You want to make sure you are taking into account the low margin and not killing it with taxes and integrity fees,” Young said.
He added it’s important for casinos to reinvest in the product. “To move those folks over to a legal and trusted environment, you need to have a competitive structure. Those unlicensed operators are not playing by the same rules as you,” Young said.
Discussing sports betting legislation, Garofalo said states have learned from Pennsylvania’s mistakes, such as creating a high barrier of entry for the sports betting market and imposing a high tax structure on gaming providers. He said states will create value by limiting the number of licenses available–not on the brick-and-mortar side, but on mobile wagering. “By having only a certain number of providers with a guarantee of exclusivity, they will create scarcity, so people will be willing to pay for that and states will get additional revenue,” Garofalo said.
He noted it’s a key moment for state governments as they make decisions that will have an ongoing impact for 20 to 30 years. However, many states and legislators lack the required expertise. As a result, he recommended that state governments across the country use Nevada’s vast amount of experience as a guide when creating their own legislation. “This is an exciting time to be involved in gaming. The bad news is you have to deal with guys like me,” Garofalo stated.
