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Volume 22 No. 35

In Depth

Photo: getty images

Leaning over a small yellow notepad, New Jersey’s chief gambling regulator wrote the word “Bill” on the first page, then circled it. Around the circle, he sketched a dozen small, inward-pointing arrows, until it was enveloped.

 

“Once you initiate the legislative process, you have all the lobbyists and all the stakeholders focused on: How does this impact me,” said Dave Rebuck, director of New Jersey’s gaming enforcement division since 2011. “They’re all looking for a benefit that works for them without having a detriment that hurts their existing business model.

“You may have the best bill written on day one. But after all this input, six months later that could be significantly different.”

This is the nature of the political process, which in many ways will dictate both the pace and direction of the much-anticipated rollout of legal, regulated sports betting in the U.S. in the coming years.

Bettors have wagered more than $2 billion at New Jersey sportsbooks since William Hill took its first sports bet at Monmouth Park racetrack on June 14, a month after the Supreme Court struck down a federal restriction in place since 1992. Through February, New Jersey sportsbooks had generated $125 million in revenue from sports betting and paid about $15 million in state taxes.

Lest you think this is entirely attributable to its larger population, New Jersey is running laps around other states on a per capita basis as well, bringing in $55 per over-21 adult in January, compared to $24 per adult in Rhode Island and $16 per adult in Delaware. Other states that have introduced sports betting in the last year all have performed even worse.

You might think that the boffo results in New Jersey would lead others to replicate its practices. But the bills proposed thus far this year in 23 states mirror the hodgepodge that has emerged in the eight that already are up and running.

New Jersey has the most liberal of the regulatory structures, allowing bettors to wager using their mobile devices, with a tax rate of 8.5 percent on bets placed in person and 13 percent on those placed online. West Virginia also allows mobile wagering, with a tax rate of 10 percent, regardless of how a bet is placed. Pennsylvania allows mobile betting but taxes sports betting at 36 percent and charges operators $10 million for a license. All three allow bettors to sign up and deposit money into accounts online, something they can’t do in Nevada.

Rhode Island did not allow mobile wagering when it welcomed sports betting last year but added it in response to disappointing revenue. Like Nevada, it will require in-person registration. It also collects a staggering 51 percent tax rate that it calls a “revenue share.” Delaware, the first state to take bets after the Supreme Court ruling, does not offer mobile wagering and holds on to 50 percent of the revenue from sports betting.

Mississippi does not allow traditional mobile wagering, but it will let its casinos develop mobile apps for use on their property, a quirky approach that both drives bettors to its resort casinos and allows sportsbooks to take increasingly popular in-play wagers, bets placed at odds that change throughout the course of a game. It taxes sports bets at 12 percent.

In New Mexico, two tribal casinos are the only locations taking legal sports bets.

Then there is the District of Columbia, which in its haste to beat neighboring states to market cobbled together an unprecedented sports betting framework that promises to tantalize many but satisfy few. 

Sports betting in D.C.

Four sports facilities in Washington, D.C., will qualify for licenses to house sportsbooks with two-block carve-outs around the properties, while the DC Lottery holds rights to mobile sports betting elsewhere. Betting is prohibited on federal land.

⚫︎ National park

⚫︎ Military bases

⚫︎ Other federal land

⚫︎ Capital One Arena

⚫︎ Nationals Park

⚫︎ Audi Stadium

⚫︎ St. Elizabeths East Entertainment & Sports Arena

Each of the four arenas and stadiums in the district that house pro teams — Capital One Arena, Nationals Park, Audi Stadium and the St. Elizabeths East Entertainment and Sports Arena — will qualify for licenses to host sportsbooks, setting them up to be landlords to operators such as MGM, William Hill or Caesars. Bars and restaurants could apply for another class of license that would allow them to install betting kiosks.

The rub of that seemingly open access is that none of those operators or facilities would be able to take bets on mobile apps outside of their property. Those rights will be held exclusively by the DC Lottery, which intends to work with its current vendor on a sports betting product.

As if crossing a state line to place a bet wasn’t enough of a lift, D.C. will have apps blocked based on where you are in the district. Not only are there exclusive carve-outs within two blocks of each sports venue, but betting will be prohibited on federal land.

“The industry’s biggest concern with the D.C. model is that there is essentially a monopoly,” said Sara Slane, senior vice president of public affairs and the point person on sports betting for the D.C.-based American Gaming Association. “Secondarily, it’s going to be extraordinarily confusing.

“I happen to have firsthand knowledge of this. I live in Maryland and I work in D.C. What they’re talking about with these zones where you can access different apps and then your app is going to shut off as soon as you hit 9th Street and H — I don’t think it’s very consumer friendly.”

How the law emerged this way offers a window into the political nature of gaming legislation. Local team owners got access, though not the open mobile platforms that they and the sportsbook operators wanted. Small businesses got access, though it remains to be seen what the value of a kiosk in a sports bar will be in a world going mobile.

But, in the end, the lottery won the grand prize, a place in the pocket or purse of every mobile device-carrying sports fan in the district.

“The approach in a state is typically going to be largely dictated by the primary stakeholders in that state,” said Chris Grove, managing director of sports and emerging verticals for Eilers & Krejcik Gaming, a leading gaming research and advisory firm. “In some states that may be the lottery. In other states, commercial casinos. In others, tribal casinos. In others, racetracks. In states like Massachusetts, DraftKings. So each state is going to have a constellation of stakeholders with different things they’re trying to get out of regulated sports betting — or trying to make sure don’t happen as a result of regulated sports betting. Those agendas end up exerting a lot of influence over the final legislative product.

“These early states are not an aberration,” Grove said. “This is how it’s going to be. This is not a fluke in the first few states. We’re going to see a pretty fragmented approach across the states that eventually tackle sports betting.”

■  ■  ■  ■

About 15 minutes before the puck dropped on a recent New Jersey Devils game against the Washington Capitals, a few friends huddled at a high-top table in the William Hill lounge on the main concourse of Newark’s Prudential Center, where an “ambassador” from the sportsbook helped one sign up for an account.

Opening a sports betting account isn’t like most of the sign-ups that might occur in a sponsored area at an arena or stadium. State regulations typically require not only a name, address, phone number and email address, but also a social security number and date of birth, information consumers aren’t always eager to provide.

Then there’s the matter of funding the account — depositing the money that will be used to place the bets. New Jersey regulators allow for as lenient a sign-up process as any state, letting bettors to fund online using their credit cards, but analysts estimate that fewer than half of U.S. credit card issuers approve charges used for gambling. They say about 70 percent of those who try to sign up in New Jersey will have the first card that they try declined.

The William Hill Sports Lounge at the Prudential Center has "ambassadors" on hand to help visitors sign up for accounts and place bets.
Photo: New Jersey Devils

Fortunately for the sportsbooks, there are ways to navigate that.

Since most consumers have at least two credit cards, they likely have one that will work. If they don’t, they can use a credit or debit card to load funds onto a William Hill prepaid card, which works like any prepaid Visa card. But a decline while signing up can be a jarring experience. Some won’t give it a second try.

This is why William Hill considers its lounge the most valuable component of its sponsorship with the Devils, which also includes a high-profile update of NHL game odds that appears on the massive center-hung board between periods and title sponsorship of Devils pregame and postgame shows on TV.

“Having fans walk into a place where we have people who will help you, regardless of the issue, is a good thing,” said Ken Fuchs, who joined William Hill U.S. as president of digital in December after stints as CEO of sports tech company Stats and as a global vice president at Yahoo. “When you look at trying to roll out something nationally, that education aspect is important. And that touchpoint is a good thing.

“This space provides an access point for sports fans to learn how to bet. To understand how you download the app. The mechanics of paying and registering. The types of information you have to disclose. Our people are trained to walk them through all that.”

William Hill is one of three sportsbooks that sponsor the Devils. Caesars Entertainment has its name on one of the arena’s premium clubs, using the sponsorship to promote its Atlantic City properties to Devils fans and concertgoers. FanDuel, which signed on to promote its daily fantasy product in 2018, extended that sponsorship to include sports betting this season. The Devils expect to add at least two more sponsors in the category.

When the Devils signed their first deals at the start of the season, team President Hugh Weber predicted that the category would be worth $5 million annually to the franchise, a bold statement that he says was intended to drive home the import of the new category. While he would not specifically confirm that the franchise hit that number this year, he said it was “pretty darn close.”

Weber pointed to the sportsbook-friendly regulations of New Jersey and the NHL as reasons the category has flourished for the franchise.

“On this one, the opinion of our [sportsbook] partners matters more than ours,” he said. “And they find this to be a much easier market to do business in. So maybe the structure in which it’s brought to market does matter, because they’re choosing to double down here.”

While the state’s gaming regulator, Rebuck, credits a comprehensive study of sports betting policies in Nevada, the U.K. and elsewhere as contributing to the regulations New Jersey landed upon, there is no doubt that the political capital of the state’s commercial casinos carried the day on the matter of who would be licensed as operators.

Though New Jersey will allow as many as 42 sportsbooks to operate online under its licensing structure, those licenses — known as skins — emanate from a core of 14 land-based casinos and horse tracks already doing business in the state, each of which can profit by granting access to other operators.

“Essentially, you took a new business and gave 14 properties a monopoly,” Rebuck said. “There was an investment by those folks for many, many years.”

When William Hill U.S. CEO Joe Asher described the competitive landscape for sportsbooks in New Jersey, and its impact on customer acquisition costs — sportsbooks offer players creatively designed opportunities to play with more cash than they deposit, or even bet the home team at lower risk — Asher jokes that the only one making money on sports betting in New Jersey is the executive who crafted and executed the Devils’ sponsorship strategy, Adam Davis.

It was Davis, chief revenue officer for Devils and Philadelphia 76ers owner Harris Blitzer Sports & Entertainment, who months ahead of the Supreme Court ruling assessed the market and determined that the sportsbook category would work best if the Devils divided it among multiple sponsors rather than delivering exclusivity to one.

The franchise has sold each of them on the idea of a package that delivers on specific objectives, which differ from their competition.

“William Hill came in here and said, ‘How do we let people know who we are and that we’re a trusted brand?’” Davis said. “If you didn’t know who William Hill was when you got here, and you walk on our concourse tonight and see what they’re doing, if you think they’re anything besides a sportsbook you better go see an eye doctor.”

■  ■  ■  ■

In a meeting room at the MGM National Harbor casino resort, about 20 minutes down the Potomac from Washington, D.C., Ted Leonsis revealed his vision to convert a 6,000-square-foot sports bar adjacent to his downtown Capital One Arena into a sportsbook.

“I don’t pay the mortgage six hours a day. I pay the mortgage 24 hours a day,” said Leonsis, owner of the Washington Capitals and Wizards and one of the early advocates of legalized sports betting. “So those of us who own buildings start to say, Sunday, there’s no hockey game. There’s no basketball game. There’s a lot of football games. I’d like to bring 20,000 people in to watch football games and go to our partner’s site and eat and gamble.

“That would be a fantastic reimagineering of what we could do with our building.”

Washington Capitals and Wizards owner Ted Leonsis envisions bringing 20,000 fans to Capital One Arena on off days for NHL and NBA to bet on football games during the season.
Photo: getty images

There are many reasons to view Leonsis’ vision of a 20,000-seat sportsbook skeptically. The communal experience of fans gathering at an arena to watch their team on TV during a road playoff series does not necessarily predict that they would congregate in large numbers for other games.

But a more modest plan he has to convert the sports bar into a sportsbook clearly has legs.

While D.C.’s regulations allow for such a venture, they aren’t ideal for it. Brick-and-mortar sportsbooks remain a viable amenity for casino patrons and can draw well for big events like Super Bowls, Final Fours and even NFL Sundays. But the day-to-day market has shifted rapidly to mobile, which already accounts for about 80 percent of revenue in New Jersey.

When sports betting comes online in D.C. at a date still to be determined, Leonsis would be better off if the arenas were the only places in the district that could accept wagers, or if a sportsbook that licensed the rights to operate at his arena also could service bettors before and after they walked through his doors.

“On the point of the amount of revenue the district will or will not get, you can have a reasonable debate,” said Grove, the gaming industry analyst and consultant. “I don’t see any reasonable debate around whether the D.C. model is uniquely terrible from a consumer standpoint. There may be ways you could make it worse. But there are far more ways you can make it better.”

While Leonsis doesn’t want to bash what the D.C. Council has authorized, it clearly wasn’t his preference. But he didn’t want to pull his support, risk getting nothing and then watch D.C. politicians lose interest if legislators in Maryland opened before they could.

“I don’t like it,” Leonsis said. “But we just had to politically figure out something to get it going. So let’s keep at it. You know, it’s better to keep the momentum going and get it launched and then have data of what’s really happening, and be kind of the exemplar educator. If it’s not working, you can see it in the real world, where it’s not theory or decks.”

While the specifics of legislation and regulation and the pace at which individual states adopt have garnered the attention of the teams and leagues, some sportsbook operators take a broader view.

“We’ve always felt that this is a very long game, and that most people are looking at it quite myopically, frankly,” said Jim Murren, CEO of MGM Resorts International, which has signed sponsorship deals with the NBA, NHL, MLB and MLS. “I’ve seen more than one report looking at the United States and color-coding the states in terms of when they’re going to approve sports betting and the contours under which they’ll approve it. And we just don’t view it that way.

“I’m not as motivated by or concerned with the pace by which sports betting is rolled out in the United States. I’m more motivated by developing relationships with the fans of professional sports leagues.”

Murren’s position is colored by the fact that sports betting will be a small piece of a larger operation that has increasingly become more focused on getting guests to spend money at its resorts than lose it in its casinos. It doesn’t alter the fact that MGM will lobby for casino-friendly regulation in markets in which it operates. The company has, after all, invested $100 million into a joint venture with global sports betting operator GVC Holdings to develop sports betting products for the U.S. market.

It certainly has to be frustrated by the pace in New York, where it purchased Yonkers Raceway and its Empire City Casino, only to see the state initially limit licenses to on-premises wagering at four upstate casinos, as a more inclusive bill that had momentum in the state legislature was derailed by the governor.

“In the last three months I’ve heard four different times that New York is looking great and New York is looking terrible. It changes with the wind,” said Jason Robins, CEO of DraftKings, which became the market-share leader in New Jersey by being the first to launch its mobile app. “It’s important to be prepared but to not thrash the business with every piece of news that comes out. Part of that is accepting that if we’re fortunate enough that it’s half the [U.S.] population in the next two years, then probably we won’t be able to get up and running in every state in that time. And that’s fine, because then it’s a massive market.”

FanDuel CEO Matt King said his company hasn’t yet seen a state structure so limiting that it would balk at entry, though he concedes that the expense inherent with developing a product for disparate states — for example, a singular app that works in both Pennsylvania and New Jersey without violating the federal Wire Act — could be prohibitive for most operators.

“The short answer is we’ve been dealing with this for years,” said King, who heads the U.S. operation of a company with roots in daily fantasy and pari-mutuel simulcasting, now under global online gaming parent Paddy Power Betfair. “Whether it’s the racing business or the fantasy business, both have very different state-level requirements.

“Adapting a product to individual state requirements creates complexity, and it’s [costly]. We look at it as something that, at our size, we can handle. But some smaller operators might struggle.”

Seeing bills start and stall in many states as legislators attempt to work through conflicting demands, the sportsbooks and sports properties that a year ago slugged it out in several statehouses are increasingly talking about finding common ground in the hope of speeding up the process.

“Say what you want about royalties and integrity fees and data mandates and monopolies — we should be at the table,” said Scott Kaufman-Ross, senior vice president and head of fantasy and gaming at the NBA. “And in most of the states where we are at the table you are able to see a compromise come to bear. I think the legislators that really take the time to understand everyone’s point of view realize this is going to work best if everybody is working together, everyone is incentivized, and everyone is aligned. So let’s get everyone to the table and work it out.” 

The Nationals’ stunning win over the Phillies on April 3 offers examples of how in-play odds can shift as an inning progresses.
Photo: getty images

The mandate that bookmakers use official league data to settle bets has been a staple of proposals forwarded by sports leagues in states considering sports betting bills, going back to the months leading up to the Supreme Court’s landmark ruling last May.

 

Of the major sports properties, all but the NHL and NASCAR have asked that it be required by statute, either at the state or federal level.

And yet none of the eight states in which sports betting is now up and running have done so.

As New Jersey considered regulations last year, former Gov. Chris Christie surfaced as a vocal opponent of the leagues’ push to require official data, in large part to make sure that the state didn’t set what he saw as a damaging precedent.

“I have no problem with leagues engaging in that type of conduct with private businesses,” Christie said at a recent conference hosted by the American Gaming Association, suggesting that the leagues address the matter through deals with the sportsbooks. “My objection is to [states] telling any of the casino operators that they must get their data from the leagues or that they must pay an integrity fee to the leagues. … If they think getting the data from the leagues is an advantage, or that using the trademarks has value, have at it, make a deal.”

What once was a legislative or regulatory push is now largely a commercial one, with the NBA and MLB working to convince operators to buy their official data — league-endorsed feeds that deliver detailed game information from the stadium or arena in near real-time, typically several seconds ahead of a broadcast feed.

Leagues argue that official data helps consumers sort out which sites are legal and reliable and will allow sportsbooks to create more engaging products. Skeptics on the sportsbooks side counter that the real-time feed isn’t appreciably superior to the delayed feed they can get for less money, at least not in the still embryonic U.S. sports betting market.

A few sportsbooks have signed on but the pace has been slow.

MGM has included the purchase of official data in sponsorship deals with the NBA, NHL, MLB and MLS. FanDuel has purchased it as part of its deals with the NBA and NHL. The Toronto-based Stars Group included data and league marks in its deal with the NBA.

But the inclusion of official data has been a sticking point for other operators, most notably William Hill, which has signed only one league sponsorship deal, reaching agreement late last month with the NHL. The NHL, it is worth noting, has been the most aggressive, and least restrictive, of the leagues in courting sportsbook sponsors. It does not require they purchase official data, a decision made easier by the fact that a puck-and-player tracking system that will differentiate its official stream won’t roll out until next year.

William Hill’s U.S. CEO, Joe Asher, has been the most vocal critic of the leagues’ insistence that his company buy official data. His argument has been that making official data a regulatory requirement would give the leagues monopoly power on pricing. But even as a commercial matter, Asher hasn’t seen enough value to justify the prices set by the NBA and MLB.

“Everybody wants to use official league data,” Asher said. “There’s official league data and there’s unofficial data. The unofficial data serves as a price check on official data. If the price [of official data] becomes too high, you’re not going to buy it.”

Interestingly, Asher’s argument has resonated at the highest levels at the NHL.

“Part of what William Hill is saying is, ‘OK, we understand there may be a new kind of data coming, show it to us,’” said NHL Commissioner Gary Bettman. “‘Let’s see if it makes sense. And then we’ll talk about it.’

“Having to buy the data, that’s a vast unknown. So we want to give our business partners predictability when you deal with us. We provide value. And we don’t expect to be paid for anything that doesn’t have value.“

Eight months ago, you might not have expected there to be such debate over the value of official data. MGM included it in its watershed deal with the NBA and has accepted it as part of each of its three league deals since then.

“We don’t believe you can do it right without official data,” said Scott Butera, who as president of interactive gaming for MGM Resorts International oversees the company’s sports betting expansion. “We believe you have to have it. There are other data providers that aren’t sanctioned by the league that will give you ‘live data,’ but the question is how accurate is it and how speedy is it? With speed, you can offer more of the in-play product that somebody who doesn’t have it can’t offer. Or probably shouldn’t offer.”

In-play betting — wagering on a game as it plays out, with odds adjusting to reflect the likelihood of an outcome — is where the use of data streamed in near real-time is of the most value.

For an example of how in-play odds can move, consider a recent Philadelphia Phillies implosion in the bottom of the ninth inning against the Washington Nationals. With the score tied at 8, the Phillies allowed a single and then walked the next three batters on the way to a walk-off loss. As the inning unfolded, a bet on the Phillies went from slightly better than even odds at the start of the inning to 3½ to 1 and then 4½ to 1 and finally 8-1, ticking upward each time the Nats put another runner on base.

Because the website offering those odds did not use official, real-time data, its odds adjusted as the event unfolded on TV.

The leagues argue that this puts sportsbooks at a disadvantage, since a bettor could conceivably know an outcome and get a bet down before the sportsbook changed odds or cut off wagering. But sportsbooks generally haven’t seen that as a problem. They simply delay the acceptance of bets to match the delay in their feeds.

FanDuel has embraced sponsorships with the leagues as it rolled from daily fantasy into sports betting, signing on with both the NBA and NHL and engaging in what it says have been productive talks with MLB. Its in-play offering in New Jersey is the most varied of any by far. In play now accounts for about 40 percent of FanDuel’s volume there, and about 50 percent of its take on the NBA, where it’s the clear market leader.

While he sees the potential for official data down the line, FanDuel CEO Matt King said that for now the marketing relationship with the leagues is the real attraction, and that if using official data keeps them from being adversaries it’s generally worth the cost.

“The value of official data will partially be determined long term by the ability of the leagues to innovate on what the product itself is,” said King, who would like to see the leagues work with sportsbooks to integrate interactive products such as gamecasts into their sites. “This is the conversation we have with the teams and the leagues, because we have to make the product better. At the end of the day, if this is just a tax, you’re always going to have this tension where it’s the operators against the leagues.”

The dynamic in baseball will be particularly interesting to watch. The sport unfolds at a slow enough pace that the speed of its data isn’t of obvious value. Its value proposition stems from tracking data, like pitch and player speed and home run distance. Thus far, there’s not a viable betting market around those.

In its negotiations with operators, MLB has set a data pricing structure that would approximately mirror the .25 percent royalty that the league sought through state legislation. Based on the $1.026 billion bet on baseball in Nevada last year, bookmakers there would have paid MLB about $2.57 million.

While that is only 5 percent of the revenue baseball bets generated for the casinos, opponents argue that it’s a heavy lift for what they describe as a “low-margin” business. It’s also a cost they’ve never had to assume in Nevada, or anywhere in the world.

“The most important thing that generally gets missed in this conversation is that there isn’t a lot of official data out there,” said Jake Williams, head of legal and regulatory affairs at Sportradar, who pointed out that neither the heavily bet NFL or NCAA even offer a betting feed. “So the only option is to use unofficial data. And that’s been the way since the outset.

“What is the official feed like, if it’s available? And what’s the alternative like? I’m sure that’s how most of the companies [view it].”

The NBA was the first of the leagues to embrace sports betting and engage with state legislators on a framework. While it will continue to lobby for state mandates on the use of official data, it realizes that the commercial route has emerged as the more realistic path.

“It’s not as efficient, but that’s what I’m trying to do,” said Scott Kaufman-Ross, senior vice president and head of fantasy and gaming at the NBA. “If I can do a deal with every commercial casino, then maybe it doesn’t matter so much what happens in legislation.

“We’re doing deals. And even most of the big [operators] we don’t have deals with, we’re having productive conversations. It’s just a matter of finding the right value in exchange of assets. And that stuff just takes time.” 

The respective unions representing the five major North American sports leagues are jointly working with a Washington lobbying firm to protect the rights of athletes as sports betting is legalized across the United States.

 

The MLB Players Association, the Major League Soccer Players Union, the National Basketball Players Association, the NFL Players Association and the NHL Players’ Association have been working with Signal Group as bills to legalize sports gambling move through state legislatures. The unions are sharing the costs of employing the firm, which is keeping tabs and reporting information back to the unions on the movement and important dates to legalize gambling. 

Signal Group Managing Director Rob Chamberlin has been working with the unions for about a year. “He tracks the legislation and then he works with us on coordinating whether we’re going to get involved, how we are going to get involved and what we are going to do,” said former MLBPA chief operating officer Kevin McGuinness, who has worked as a Washington lobbyist and is returning to private practice. “From our standpoint, players are going to be the face of sports gambling. They are going to bear the brunt of regulation, and if we want to really preserve the real integrity of our game, we have to make sure the legislatures address these realities as well.”

Legalized gambling has the potential to bring more fan interest and more dollars to team sports, but it also poses potential problems for players. McGuinness said there are four new issues or needs that must be addressed: 

Protecting players. 

A confidential system to report contact with gamblers.

A fair process to handle complaints of impropriety.

• Keeping personal player health data confidential. 

“It is going to be a different world where sports wagering is occurring right around — and now in — the facility,” McGuinness said. “It’s being promoted not just by the team and the league, but the state itself is going to be pushing people to bet. And now the reason you lost your bet is literally feet away from you.”

Bob Foose, the executive director of the MLSPU, said he has “significant concerns” that the leagues have not fully weighed the potential negative consequences that legalized gambling can have on society in general and players in particular. 

“There must be enhanced security protocols in MLS stadiums so players and their families feel safe from fans who may be unruly and losing bets just feet away,” Foose said.

Gambling has been an issue in soccer internationally for many years, Foose noted. “Elements of organized crime often bribe or threaten players, who make nothing or come from nothing, to fix matches or plays within a game,” he said. 

The NBPA also has concerns about player safety, particularly because NBA players are highly recognizable. When you mix money and lost bets, that has the potential for negative impacts, including allegations against players, said David Foster, NBPA deputy general counsel. 

“Complaints of cheating may also lead to threats of violence against players or their loved ones by those who truly believe that the games are being fixed,” Foster said. 

As sports betting becomes legal throughout the states, it will “undoubtedly increase the reputation, personal and professional risks that players face,” but athletes will be prohibited from direct financial participation in the new industry, Foster said. “Therefore, we are in the process of going to every state that is considering the legalization of gambling and asking that if they do legalize this industry within their state that a royalty fee paid by the betting operators to the NBPA is included in the legislation.” 

MLB players also want to share in the revenue, said Bruce Meyer, MLBPA chief negotiator. “There are two main focuses really … making sure that players are adequately protected in light of the new challenges they are going to face, whether that be from a security standpoint or a public standpoint,” he said. “But obviously, yes, we are exploring all potential avenues for players to benefit financially from it.”

On May 14, 2018, the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act, clearing the way for states to legalize sports betting. Business sped forward from that date, leading to partnerships with casino companies, sportsbooks, research and data firms and other vendors. The following is a snapshot of deals reached since PASPA was abolished.

 

Photo: getty images

Caesars Entertainment (Las Vegas) owns casinos under the Caesars, Harrah’s and Horseshoe brand names, as well as the World Series of Poker.

First official casino sponsor of the NFL in a multiyear agreement, with exclusive right to use NFL trademarks in the U.S. and U.K. to promote Caesars casino properties and activate at key NFL events. Does not include data sharing or use of the NFL’s logo in connection with the company’s sportsbooks.

15-year agreement to be the first founding partner of the Raiders’ Las Vegas stadium.

Multiyear agreement with Harris Blitzer Sports & Entertainment, which owns the Philadelphia 76ers and New Jersey Devils, promoting the Harrah’s Philadelphia casino, its mobile sportsbook app and Atlantic City casinos.

Stake in DraftKings through which it will offer online market access in states where the casino company operates, subject to state laws. Receives a portion of the revenue that DraftKings generates in states where the partnership is active. DraftKings last month opened a branded sportsbook at Scarlet Pearl Casino Resort in D’Iberville, Miss.

Partner with Turner Sports to develop gaming content. 

Sponsorship deals with the Baltimore Ravens, New Orleans Saints and New Orleans Pelicans.

Photo: getty images

MGM Resorts International (Las Vegas) owns and operates 15 properties in Nevada, Mississippi and Michigan, and has a 50 percent stake in four other properties including T-Mobile Arena.

Four-year, $80 million agreement with MLB as the league’s first official gaming partner and official entertainment partner. Receives nonexclusive access to official MLB stats feeds and exclusive access to a select amount of enhanced Statcast stats. Title sponsored the Mariners-A’s season-opening series in Tokyo. MGM’s logo was visible via a patch on the A’s jerseys, home-plate rotational signage, in the dugouts and on press backdrops.

Multiyear sponsorship with the NBA, the league’s first official gaming partnership. Each side can use the other’s marks, but the league can still license its data to other gaming operations. The deal also includes rights to the WNBA.

Multiyear, nonexclusive deal with the NHL that gives access to league and team marks for use online and in its sportsbooks. Access to market its sportsbooks, resorts and rewards program to the NHL’s database of hockey fans. Purchases and uses official data from the league, including proprietary player tracking data.

Exclusive official sports betting partner of MLS. Access to enhanced league data for sports betting customers and television-visible signage at the more than 100 nationally broadcast games.

Deal with the New York Jets, including in-stadium signage and sponsorship of the Jets 360 Productions Studio. Use of the Jets’ logo at the Borgata in Atlantic City, but not in any way associated with its sports gambling business.

With software company Xperiel, partnered with the Sacramento Kings to introduce the league’s first free-to-play mobile game, available only through the team’s Golden 1 Center app. The game is not played for money but virtual credits.

Multiyear deal with the Boston Red Sox that places the MGM lion’s head logo on Fenway Park’s Green Monster. Other signage, including behind home plate, will be prominent and the MGM Resorts’ brand will be featured on NESN and other team-controlled media outlets. Additionally, the Red Sox’s Winter Weekend fanfest will be in Springfield, Mass., annually at the MGM Springfield casino, which opened in 2018.

Churchill Downs (Louisville, Ky.) owns the iconic track as well as casinos in seven other states, a racetrack in Illinois, one in Louisiana and TwinSpires.com, the largest legal online wagering platform for horse racing in the U.S.

Acquired Lady Luck Casino Nemacolin in Farmington, Pa.

Acquired Presque Isle Downs & Casino in Erie, Pa.

Partnered with the Golden Nugget Atlantic City to get into the New Jersey legal sports betting and online gaming markets.

Partnered with technology platform SBTech.

Penn National Gaming (Wyomissing, Pa.) owns and operates the Tropicana Las Vegas, and operates six other sportsbooks in Pennsylvania, West Virginia and Mississippi. 

Its Hollywood Casino at Charles Town Races in West Virginia was the site of that state’s first legal sports wager, as was its Hollywood Casino at Penn National Race Course in Pennsylvania.

Dover Downs Gaming & Entertainment (Dover, Del.) owns Dover International Speedway and Dover Downs Hotel & Casino, which is on the same property. 

The speedway opened a betting kiosk on site for the fall race and will do so again for its race next month. To date, DIS is the only motorsports track that has offered a sportsbook.

Chickasaw Nation (Ada, Okla.) is a federally recognized Native American nation that owns 19 casinos and Lone Star Park, a horse racing track in Grand Prairie, Texas.

Its WinStar World Casino and Resort (a tribal casino and hotel located in Thackerville, Okla., near the Texas state line) signed a deal with the Dallas Cowboys and is allowed to use the team’s logos and marks.

WinStar is the exclusive casino sponsor for Complexity Gaming, marking the first time that a U.S. esports organization has designated a casino as an official sponsor.

Photo: getty images

William Hill (London and Las Vegas) is Nevada’s leading sportsbook, operating more than half of the state’s locations as well as the state’s leading mobile sports betting app. It also has 10 in Mississippi, three in New Jersey and two in West Virginia.

Sponsorship with MSG Networks for its New Jersey Devils telecasts. Deal includes in-game integration, branded content and commercial spots during games, plus the network’s pregame and postgame shows.

Sportradar (Minneapolis and St. Gallen, Switzerland) is a research and data analysis company whose ownership group includes Ted Leonsis, Mark Cuban and Michael Jordan. The firm had existing partnerships with the NFL, NHL and FIFA.

Multiyear data deal with MLB, with exclusive rights to the distribution of live industry standard audio-visual game feeds to operators outside the U.S. where sports betting is legal. Will distribute data to U.S. media companies as the official supplier of MLB’s real-time betting data feed. MLB will use Sportradar’s integrity monitoring services.

Three-year, nonexclusive domestic rights deal with the NBA to distribute official betting data from NBA and WNBA games to licensed operators in states where sports wagering has been legalized.

Will monitor domestic and global betting activity for all races across the Monster Energy NASCAR Cup, NASCAR Xfinity Series and NASCAR Camping World Truck Series.

One-year deal to provide integrity monitoring services for the USL. The company also receives audio-video rights to use for betting purposes.

Scientific Games (Las Vegas) is a gaming operator that partnered with Caesars to provide its OpenBet sportsbook platform in New Jersey (at Bally’s and Harrah’s Atlantic City) and Mississippi. The company also is a technology provider of Delaware’s sportsbook.

Photo: AP Images

International Game Technology (London) is Rhode Island’s official technology partner. 

The company recently installed its PlayShot QuickBet Kiosks at FanDuel Sportsbook at The New Meadowlands Racetrack. IGT’s technology is used to place over-the-counter sports wagers in Nevada, New Jersey, Mississippi, West Virginia, Rhode Island and Pennsylvania.

The Stars Group (Toronto) is an online gambling company.

In December, it was named an authorized gaming operator of the NBA in the U.S. TSG has the rights to use official NBA betting data and league marks across TSG’s digital sports betting offerings. TSG’s BetEasy.com brand also became the league’s official wagering partner in Australia, where the NBA will promote the brand on the league’s official Australian website, the NBA app and the league’s Australian social media accounts. New Jersey also began offering TSG’s BetStars online betting sportsbook.

CG Technology (Las Vegas) operates eight sportsbooks at seven resorts in Nevada. 

It signed a deal in February with Meadowlands Racetrack to provide online and mobile sports betting. 

Paddy Power Betfair (Dublin) owns TVG Network, an online horse and greyhound racing betting business and digital cable and satellite television network, and acquired FanDuel in May 2018. 

The company opened the 5,310-square-foot FanDuel Sportsbook Lounge last July at the Meadowlands and debuted the 1,800-square-foot FanDuel Sportsbook at Valley Forge (Pa.) Casino Resort last month. The company recently announced plans to rebrand as Flutter Entertainment, pending shareholder approval at the company’s annual meeting next month.

IMG Arena (London), part of IMG Media, provides more than 250 bookmakers worldwide with livestreaming and on-demand virtual sports products, which became part of the company’s portfolio after investing in Leap Gaming last June. 

The division has partnerships with more than 40 major rights holders, including the PGA Tour, ATP, MLS, NHL and the U.S. Tennis Association’s U.S. Open. It has created an alliance with Kambi, SBTech, Paddy Power Betfair and others that requires those companies to use only official data and streaming services for IMG Arena-represented events.

Genius Sports (London) monitors wagering activity for the PGA Tour in countries where gambling already is legal. 

The company is in the first year of a three-year data distribution deal with the NBA and a 10-year deal with the NCAA.

SBTech (London) is the technology provider for Churchill Downs, Golden Nugget Casinos in Biloxi, Miss., and Atlantic City, N.J., and Resorts Casino Hotel, also in Atlantic City. 

Oregon announced last month that the company would be the state’s partner for its current lottery and for any future sportsbook.

Kambi (Malta) provides sports betting software to gaming operators. 

The company has a strong presence in New Jersey and Pennsylvania, and says that 80 percent of bets to date in the new post-PASPA markets have taken place at a Kambi-powered book. The company last month signed a deal to provide online and on-property betting services at Mohegan Sun in Connecticut.

WORKING WITH STATES

 

“The tactical realities are that this is going to roll out differently in different jurisdictions. So it’s going to go slowly in some places and quickly in some places and it’s going to look quite different in the end. But in the gaming world, you gotta be OK with that.”

 

Lou Jacobs, Co-CEO, Delaware North

“New Jersey is a little bit like Iowa for presidential candidates right now. You gotta be there and you gotta do well to move on. I think people are taking that approach.”

Joe Asher, CEO, William Hill U.S.

“I constantly get calls from other states. And it has to do with educating them on why we did what we did and whether it’s working. I’m very proud of what we’ve done so it’s an easy conversation. But if they don’t want to do it — fine. Good luck.”

Dave Rebuck, Director, New Jersey Division of Gaming Enforcement

“I don’t think the other states that are looking at this should be trying to reinvent the wheel. The more the variation on something that’s working, the greater the risk.”

Chris Christie, Former New Jersey Governor

NEW GENERATION OF BETTORS

 

“You say gambling, for our generation you think of people late at night throwing dice and having a martini. That’s not what this generation will be about. So sportsbooks have to look like this: No cocktail waitresses. Apple Genius Bar employees.”

Ted Leonsis, Majority Owner, Monumental Sports & Entertainment

OPERATORS' APPROACH

 

“The thing that I’ve learned in this business is that the operators aren’t really interested in spending money in states until they’re legal. There’s no ‘Hey, let me build up to it.’ Because it comes down to what are they going to drive in players, and that’s how they develop what the market is worth and what the marketing around it is worth.”

Adam Davis, Chief Revenue Officer,Harris Blitzer Sports & Entertainment

MEDIA

 

“Over the years we have tried a tremendous amount of companion pieces to the game [telecasts]. And every one of them have failed. [A betting-themed feed] seems like the most natural piece and most organic way, with an opt-in … to allow a person to have an interactive experience.”

Craig Sloan, Executive Vice President of Partnerships, Home Team Sports

REGULATION

 

“I don’t know what it is that [the leagues are] so concerned about, because at the end of the day we’re the ones who have to comply with all the regulations that are in place. And we’ve been doing this for 40-plus years, It’s just the nature of the beast.”

Sara Slane, Senior Vice President of Public Affairs, American Gaming Association

DATA

 

“The data we’re going to be creating with puck and player data, you’re going to have to be plugged in to us. You can’t scrape it. So for us, we think this has created an interesting and potentially valuable opportunity, because if you want to do the in-game betting and you’re going to have a market that functions in real time, you’re going to have to have a relationship with us.”

Gary Bettman, Commissioner, NHL

“We have a vast amount of space to cover and at times 156 players with balls in the air to cover. We have a great system, ShotLink, with a lot of investment in it. But what’s the next thing? Is it tech in the ball? On the players? How do we do that?”

Len Brown, Chief Legal Officer, PGA Tour

This week, Bill King and Assistant Managing Editor Ted Keith discuss how the business of sports betting has grown since the Supreme Court's ruling nearly a year ago, and Assistant Managing Editor David Bourne talks about his inside look at how the WWE develops its talent and fuels its content machine.