What’s next in sports gambling?
When the Supreme Court struck down PASPA last week, it opened the floodgates to a commercial opportunity that many in the sports industry anticipate to be generational. Some see not only possibilities, but peril. Here’s what to expect from five crucial corners of the sports business, all of which can expect significant impacts from this evolving landscape in the coming years.
A lot more lobbying. The NBA and Major League Baseball have been in the lead, taking their message to state legislators, who almost certainly will be the ones who determine how sports betting plays out in the U.S. While the court’s decision came as no surprise, it accelerates the urgency for the leagues to find sympathetic ears in the state houses. Conspicuously absent during those lobbying efforts, the NFL this week responded with a call for federal legislation — or at least minimum regulatory standards. Though that’s the preference of all the leagues, the likelihood that Congress would treat sports betting differently from all other forms of gambling seems slim. That leaves the leagues to continue to slug it out state by state.
The potential upside for the teams is huge here, but like real estate it comes down to location, location, location. Sportsbook brands that offer products and services that are similar to each other will be searching for ways to distinguish themselves. A team sponsorship can do that. And, perhaps more importantly, it can put sportsbooks one step closer to the very consumers they’ll be targeting. But it all comes down to where a team resides. If a state where a team resides already has or is likely to legalize sports betting, those teams will be in high demand. Teams in the Northeast can expect to reap rewards soon since New Jersey and Pennsylvania are ready to go and neighboring states aren’t far behind. Those in Texas and Georgia may be waiting a while.
Plan on a slow boil at the outset. This isn’t Daily Fantasy redux. When FanDuel and DraftKings flooded NFL telecasts with commercials at the start of the 2015 season, those were national rollouts. They were vying for customers from coast to coast. At this point, it looks unlikely that more than a handful of states will be up and running in time for the NFL season. There won’t be the critical mass to merit national ad buys. So while there almost certainly will be more betting-related content during sports programming, the financial impact likely won’t be felt until this is something closer to a national play.
Last month the four major sports unions issued a rare joint statement expressing their intent to make sure athletes have a “seat at the table” as legislators, regulators and leagues determine what form U.S. sports betting will take. After the ruling, they reiterated that position. Player safety, game integrity, privacy and publicity rights are issues that the unions say they’re watching. Their voice likely will be loudest as the states and leagues consider the manner in which they’ll monitor whether players bet and how they’ll be treated if they do. There’s also a looming health concern. Studies in the United Kingdom have shown that pro athletes are at high risk for problem gambling
For years, the NCAA has stuck steadfastly to its opposition to sports betting. But as the commercial potential has become more apparent, athletic directors at many programs seem to be warming to the idea — or at least accepting its inevitability and penciling out the revenue potential. The most instructive example of the swing came during a recent meeting to discuss the topic in West Virginia, which will be one of the first states to open for business. The NBA and MLB were present. But so were ADs from West Virginia and Marshall, along with Division 1A Athletic Directors’ Association head Tom McMillen. Now that PASPA is dead, expect schools in each state to take a far more vocal role in the debate, rather than awaiting marching orders from the NCAA.
“Just because they got gambling legal, people who don’t gamble aren’t going to rush out to the casino or places like that. That’s my opinion.”
– Charles Barkley, TNT analyst
and basketball hall of famer
“I regret the ruling. I think the court ignored the impact that the ruling will have on sports in America, and values you learn from sports. I mean, they’ve turned every basketball player, football player and baseball player into a roulette chip. And that doesn’t mean pros only.”
– Bill Bradley, former U.S. Senator
(D-N.J.) and basketball hall of famer
“I’m not opposed to people making wagers on events, sporting events, but I guess the thing that worries you the most is, how could it or would it affect the integrity of the game? That’s always a concern.”
– Nick Saban, University of Alabama
head football coach