On Tuesday in New York City, the inaugural Sports Betting USA Conference kicked off with full schedule of s including sports betting industry veterans, seasoned experts in regulation and gaming integrity, representatives from sports leagues, state legislators and media folks, like yours truly. Attendees hailed from all over the world with an estimated 70% coming from international locations. 182d6v
The rundown below is intended to provide you insights in (fairly) easily-digestible form: Main takeaways, quick synopses of the seminars, statistics of note, plus some odds and ends from the first four s that took place on Day One of Sports Betting USA. Coming in less than three weeks? Oral arguments in Christie v NCAA, aka the Supreme Court Sports Betting Case that puts in the crosshairs the 1992 federal law PASPA, which effectively bans sports betting outside of Nevada.
Takeaways From Sports Betting USA Conference: PASPA’s Impact, Sports Integrity, Effective Regulation, And a Workable Sports Betting Model 2r1o3x
One: Sports betting today: A pastime enjoyed by millions – how do we bring it out of the legal shadows? 692b2m
– According to David Henwood of H2 Gambling Capital, an independent firm that conducts market research in the global gambling sector, the projected global gaming revenue (GGR) from sports betting across the world in 2017 is approximately $59.8 billion (US dollars), up from $42 billion in 2006.
– Keep in mind that’s not the handle (or volume of wagers) — that’s revenue. The handle is roughly 20 times that amount, or about $1.18 trillion. H2 projects the GGR to grow to about $74.8 billion in 2020.
– (Check out Part II of our coverage here.)
– Also according to Henwood, mobile gaming has gone from an afterthought to a serious growth generator; Nevada sportsbooks have shown that mobile apps or mobile-enabled books are increasing the size of the market, not simply replacing traffic into physical sportsbooks.
– Just how many billions in illegal wagers do Americans place annually? It’s inherently difficult to figure out. The American Gaming Association estimates about $150 billion while H2 puts it at about $196 billion. I’ve seen the figure projected as high as $400 million. Richard Schuetz later quipped that mobsters are excellent at running books, they just don’t believe in ing.
– Consider this:
Number of offshore sportsbook operators that are licensed in one jurisdiction but target players in U.S.? About 59, per David Henwood of H2 Gambling Capital. #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
– Separate from those operators, there’s lots of offshore books that operate without any license whatsoever and target U.S.-based clients.
– Joe Pappano, Senior Vice President and Managing Director of Vantiv Entertainment Solutions, spoke about financial transactions: Offshore sportsbooks by U.S. laws by “miscoding” credit card merchant codes, often by identifying wagering-related transactions as miscellaneous retail transactions.
– Speaking in a classic Bostonian accent, Patrick Hanley, Chief of Gaming Enforcement for the Office of the Attorney General of Massachusetts, offered some insight about law enforcement and about offshore books (some of whom work with local bookies) potentially coming on shore — if (or when) widespread regulated sports betting comes to the states. Hanley likened the scenario to the expansion of marijuana legalization: Could marijuana dealers get dispensary licenses? Possibly. He said they certainly have expertise, but also a problem.
Two: 25 years of PASPA: Examining the effects of the prohibition and envisioning a more effective legal and regulatory framework 1z1t5c
As you might expect, nobody on this (or probably anyone in attendance) is particularly impressed or enthused by PASPA.
Next at @SportsBet_USA – From PASPA to present. Experts believe 17-25 states could move to implement sports betting but with what standards? Mixed SCOTUS decision could competitor Congress to act pic.twitter.com/Hn26qLMs7m
— Brett Smiley (@brettsmiley) November 14, 2017
– ist Michelle Minton, Senior Policy Analyst at the Competitive Enterprise Institute, highlighted an unintended consequences of PASPA: In illegal markets, which have proliferated since PASPA’s age, problem gamblers are worse off.
– In a regulated environment, she said operators obtain and may be required to devote resources for problem or problem-inclined gamblers, and will actually offer those resources — whether it’s phone numbers, educational materials, screening tests or otherwise.
Julian Morris explains that public policy goal of curbing match fixing (i.e. sport integrity) can be achieved by information sharing between data providers/analysts, sportsbooks, leagues and law enforcement.
— Brett Smiley (@brettsmiley) November 14, 2017
– Minton also noted that “harmonization” of sports betting regulatory practices and procedures across the states wanting sports betting would be ideal. She used as an example the existence of the Multi-State Lottery Association (MUSL), a “a non-profit, government-benefit association owned and operated by its member lotteries.”
Three: Sports Integrity: Exploring the interplay between sports betting regulation and sports integrity – experiences from regulated vs. non- regulated markets 3r472l
– Is prohibition an effective method of regulation? No. Didn’t work for alcohol in the ‘20s and ‘30s, hasn’t worked since the dawn of PASPA. But why is regulation important? Here:
#SBUSA17 Agreement among #Integrity ists: match fixing causes serious short and long term damage for all involved. Reputational and financial. Loss of fans, loss of league sponsors, loss of bettors wagering on the games. Like betting on WWE.
— Brett Smiley (@brettsmiley) November 14, 2017
– ist Khalid Ali, CEO of ESSA (Sports Betting Integrity) advised that online operators have indicators for suspicious betting patterns and suspicious creation.
– The ability to void bets, investigate suspicious activity and issue sanctions are powerful enforcement tools that are absent in an unregulated environment. And of course operators and/or integrity monitoring providers bring this information to leagues and to competitors who are aligned at least through common interest of preserving integrity (a business imperative) — and stamping out bad actors.
– Sportradar Director of Global Strategy Integrity Services, Andy Cunningham, detailed the company’s proprietary detection system that monitors well-regulated and unregulated markets. Sportradar uses alerts (to unusual betting patterns) generated by algorithms, which dedicated expert analysts then observe and review and add some context. From there, they will notify partners. Cunningham said they’ve detected over 3,600 incidents of suspicious activity leading to the prosecution of over 200 individuals in courts of law. (Note: SportsHandle will have more detail on Sportradar’s technology with Cunningham and his colleague, Alex Inglot, Sportradar’s Director of Communications and Public Affairs.)
Rick Parry, international football (soccer) consultant on US sports leagues: "They have to get their acts together now or get left behind. Sports betting here is huge" already. Says conversations are happening… #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
Four: Envisioning sports betting model that would work for the sports industry 18h1u
– Let’s kick this section off with a word from the , Daniel Roberts of Yahoo! Finance & Sports.
Next on envisioning sports betting model that'd work for sports industry. @readDanwrite notes that Las Vegas on track for 8th straight year of rise in betting handle, about $5.8B for '17 #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
– Of course that figure includes September’s record-breaking $558 million handle. Have we mentioned the athletes yet? Not much but here goes. They do stand to benefit (more on that) but the benefit may not come easily:
Interesting sub plot pointed out by @McCannSportsLaw … Will NBA players association (for example) argue with league over partnership dollars via sports betting? League defined revenue under CBA? #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
– Per Michael McCann, Professor of Law at the University of New Hampshire School of Law, and Legal Analyst for NBA TV and Sports Illustrated, the NBA Players Association would most certainly argue that sponsorship money via sports betting would constitute the kind of basketball related income that they’re entitled to share in.
– Speaking of the NBA, this also included Dan Spillane, Senior Vice President and Assistant General Counsel for the National Basketball Association. He had the task of explaining why the league is fighting to save PASPA over New Jersey’s protests.
Dan Spillane of NBA (SVP) here to explain league position on legal sports betting. General position: "Should be legal and regulated pursuant to federal framework." They oppose because what's happening is illegal… PASPA remains law. #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
Spillane continued: Law doesn't even contain real regulation… No good from policy standpoint. Referring to NJ's "partial repeal." Disagreement is how to get there. Preference for legislative not litigation solution. #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
More from NBA's Spillane: Whatever outcome in NCAA v Christie doesn't foreclose federal approach to sports betting. NBA had been studying and preparing for range of outcomes. #SBUSA17
— Brett Smiley (@brettsmiley) November 14, 2017
– The position connects to NBA Commissioner Adam Silver’s famous 2014 op-ed in which he wrote: “Congress should adopt a federal framework that allows states to authorize betting on professional sports, subject to strict regulatory requirements and technological safeguards.” I’ll have more to say on the NBA’s position in the coming day or two.
Check back for a recap on additional s from Day One.
