Group Created with Sketch.
Volume 22 No. 35

Opinion

Brandon McClung was “set free of his pain and his braces” on April 7, 2019. That was the lead sentence of the obituary for our 39-year-old colleague, who took his life on a Sunday afternoon at his home in Charlotte. Our hearts hurt terribly that our good friend, who had worked at Sports Business Journal since 2005, is gone.

The first thing his father told me in an emotional conversation the morning after was, “He loved all of you. He loved his job.” That’s how everyone felt about Brandon, one of the kindest and gentlest people you could ever meet. 

Brandon was born with spina bifida, a devastating condition that made his life so difficult. He worked in our Charlotte office as a key research associate tirelessly for 14 years — at his desk daily by 7:30 a.m. and staying late. We all saw how the simple things in life that most of us take for granted were a challenge for Brandon. And though he faced those challenges with remarkable courage and without complaint, the heartbreaking part is that, as he told some of those closest to him, he knew the physical challenges he faced would only get worse and make it more difficult to care for himself. That surely discouraged and clouded the long-term outlook of this fiercely independent young man.

McClung

And was Brandon ever independent. He grew up in West Virginia, where his grandfathers and father worked in the coal mines. He was the first member of his immediate family to go to college, and after he received his master’s degree in Sports Administration at West Virginia University, he came to Charlotte, bought his own car and began his career. I’ll never forget the pride in his sweet, soulful brown eyes when he told me three years ago he had put in an offer on a home. He was so happy and excited.

Brandon refused to let his physical difficulties affect the way he was treated. He didn’t want you to hold a door open for him. He didn’t want you to slow down or wait for him. “Go ahead,” he would signal with a wave. He’d meet you. And he never, ever complained, even though you knew there were so many days when he felt terrible and was dealing with consistent, significant pain. Every day he faced down spina bifida, and any day you were feeling sorry for yourself, all you had to do was look at Brandon and how he faced his barriers with hard work and courage, all while maintaining such kindness, humor and an easy nature. That would change your outlook pretty quickly.

Brandon was always rooted in the right values — love of his family, his home state of West Virginia and the Mountaineers, and especially sports. He knew his sports. Boy, he could rattle off facts, figures and which college each starter in any league attended. But working at Sports Business Journal wasn’t enough for Brandon. He would leave the office and go handle stats for a variety of University of North Carolina-Charlotte sports teams, including football, basketball and baseball, as well as the Class AAA Charlotte Knights and, on Sundays in the fall, the Carolina Panthers. We all marveled at his work ethic and excitement at being around competition. After a long week, I’d ask him, “Don’t you want some time off?” He’d quickly shake his head and exclaim, “I love it!” He truly did.

We will miss Brandon. We look at his cube and dearly wish he was gathering data and analyzing his Excel files. We really wish we could hear his gentle laugh and see his face get red and his eyes well up after a funny story. We truly wish we were with him on that last Sunday. We wish we could have helped our friend.

Our friend, Brandon, is set free of his pain and his braces. But the legacy of his life, courage and kindness will live in our hearts and at SBJ for many years to come.

Abraham Madkour can be reached at amadkour@sportsbusinessjournal.com.

OK. Time to buckle up.

Legalized gambling is no longer a tremor waiting to be felt. The earthquake is here. 

And if there are only eight states allowing varying forms of sports betting in early 2019, we expect three times as many states taking official action by year-end. The remaining states will get there almost as fast, certainly by 2021.

Globally, we project a similar adoption for a number of countries that follow American practices closely. But what does this really mean for domestic leagues, associations, teams, sponsors, advertisers, networks, agencies, fans, players, coaches, general managers, governments and inter-galactic aliens observing us from the far reaches of outer space?

To answer, let’s focus on the United States, where legalized gambling is trending high, states are changing gaming laws at rapid rates, and politicians are drooling over the promise of new revenue from a wagering Wild West. 

New state gaming laws are setting off seismic shifts certain to reshape the sports landscape for the foreseeable future. 

Fundamentally, ownership of data is about to make owners and players wealthier and generate notable financial windfalls. However, as our capitalistic students point out, more money means more people wanting in on the action.

A vast new world of legalized sports betting will bring new dollars to a variety of stakeholders — but big shakedowns to others.
Photo: getty images

First, study the biggest tectonic plate getting ready to shift — most specifically the NFL, which needs to sell its lucrative broadcast rights while simultaneously renewing its collective-bargaining agreement with the NFLPA — all in the vicinity of 2021. Second, Amazon, Apple, Facebook, Microsoft, Netflix and YouTube are willing to sell customers what they want, when they want it. That could soon include the packaging of sports data.

Third, the reality of digital and global economies means sports fans exist everywhere, all looking to consume sports information, all the time, including before, during and after contests. Further, spectators like to study and manipulate data for their fantasy leagues or for their investments in the ever-rising world of esports.

Now, let’s mix into the discussion the sports wagering tsunami that is bringing waves of economic and marketing activity, not to mention fan interest, debate and enhanced access. If there was $6 billion bet illegally on the Super Bowl — one game, played on one day — we’re certain thousands of games, races and tournaments will unleash a new crush of gambling revenue. 

At the very least, those who want to wager will do so freely and openly. And, much like esports, the ability to compete openly against “strangers” (or vs. the “house”) will open up competition, chatter, interest and resource flow. And it will be good for sports. Very good. Stadiums will become casinos. 

Yup, game outcomes, individual performances, prop “moments,” trifectas and other multi-variate packaging will bring new dollars to select stakeholders. But it will bring also big shakedowns to others.

For some, our seismographic metaphor is mildly interesting. Their response is probably a simple: “Hmm, gambling is now legal in my state. I guess there will be more sports dollars changing hands.” 

It’s so much more than that.

SBJ readers need to fully consider nascent concepts like data access, data security, game integrity, organized crime (i.e., how they deal with a lucrative portfolio of theirs getting legalized), gambling addictions, player safety, entrepreneurial new businesses and a la carte menus while watching games. 

Think about this: What if Amazon holds NFL media rights by 2021 and the NFL figures out how to avoid taking integrity fees (less than 1 percent of the action) and instead pioneers a landmark leveraging of league-generated licensed data.

Next, factor in Alexa watching the pregame with you and Siri, asking you if you want to make your regular wager. You may laugh but we can hear the following:

“Alexa, give me $500 on the Browns to cover, Baker Mayfield to score the first touchdown and three penalties in the second quarter. And while you’re at it, get me an autographed game-worn Tom Brady helmet.”

“Siri, please place my regular bet on the Rams, and add $1,000 on a field goal hitting a cross bar and less than 90 percent in-stadium attendance at the Jets-Colts game.”

Far-fetched? If it is, it can’t be by much.

If gambling fans want it, team owners and league commissioners will make it available. Secure digital systems tied to rights fees, voice-recognition, financial access and some form of compliance will spur the technology sector to invent what doesn’t already exist.

That’s great for the owners but let’s not forget what happens to folks who lose marriages, homes, cars and rent payments to gambling addictions. The downsides of gambling have always existed but the illegality of sports wagering kept things in Las Vegas or down in the alleys.

Those days are gone.

Instead, with each new state legislating sports wagering, folks should brace for the aftershocks that will affect families and communities. These are worrisome concerns that foreshadow a future day of reckoning. 

Just go back to the reasons why professional U.S. sports organizations exist. Leagues exist to make their owners wealthier. Players associations exist to protect their members while making them wealthier. Amazon (and other publicly traded firms) exist to make their stock more valuable and their stockholders wealthier. 

Best of all, fans of sports like to imagine getting rich quick and many will bet on things. 

It’s a perfect storm with legalized gambling operators seeing no problem with any of the above beliefs, even if it means leaving the lives of a few state taxpayers in ruins.

So, buckle up, campers. The sports world’s earthquake is just starting to rumble.

Rick Burton is the David B. Falk Professor of Sport Management at Syracuse University. His newly co-edited book The Sport Business Handbook was published in February by Human Kinetics. Norm O’Reilly is Director of the International Institute for Sport Business & Leadership at the University of Guelph and a Partner Consultant at T1.

Questions about OPED submission guidelines? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com

In theory, May 14, 2018, should have marked a major shift in America’s sports betting landscape. That day, the Supreme Court, in Murphy v. NCAA, rejected the federal law that prohibited most states from legalizing sports betting. Individual states, said the justices, have the power to authorize and regulate sports betting within their borders. To no one’s surprise, happy sports fans interpreted the decision to mean that the nation’s highest court had opened the floodgates to legal internet and app-based sports betting.

That celebration was short-lived. At the outset, fan enthusiasm was misplaced because the Supreme Court’s decision did not legalize anything. It simply cleared the way for states to choose whether and how to authorize sports betting. Although some states moved quickly to authorize sports betting, including online and app-based betting, those plans faced an unexpected challenge in January 2019 when the Department of Justice released a new interpretation of a federal law called the Wire Act. The DOJ reinterpreted the Wire Act to prohibit betting operators from using interstate wire transmissions — such as phone calls or internet transactions — for the placement of all types of bets, not only those related to sports. That guidance has disrupted states’ efforts toward legalized sports betting and has thrown online bettors’ expectations into disarray. Because virtually every online or app-based bet crosses state lines, the DOJ’s recent guidance may be a dealbreaker.

Photo: getty images

When the Murphy decision came down, states spotted an opportunity to capture revenue lost to offshore sportsbooks already popular with fans in the U.S. Eight states now have active legal sports betting operations. Several states and the District of Columbia have passed bills or ballot questions authorizing sports betting operations that are soon expected to open for business. Many other states are actively considering bills to authorize sports betting.

States that have green-lighted sports wagers are experimenting with a variety of betting platforms. New York’s draft legislation would permit only in-person sports betting at authorized “sports wagering lounges.” By contrast, a number of states authorize or propose authorizing hybrid platforms: in-person wagers, plus online or app-based betting. Mississippi, for example, permits in-person wagers plus online betting when players are on-site at a state-authorized casino. Other states go further, calculating that maximizing revenue requires allowing fans to bet from anywhere using a mobile app. New Jersey and D.C. have been early leaders in this model.

New Jersey is one of the eight states with active legal sports betting. Fans, bettors and betting operators can place and facilitate cash bets and payouts both in person at New Jersey’s sportsbooks and via app when physically within the state’s borders. D.C. has passed similar legislation. In January, the District authorized betting at local stadiums, private businesses and through geofenced mobile apps. D.C. will have exclusive rights to a citywide betting app, other than within two blocks of the city’s four main professional sports arenas, where licensed betting operators may offer both in-person and in-app betting.

In choosing whether to offer in-person or app-based sports betting, several factors are at play. States want to maximize tax revenue and meet demand for more accessible sports betting. The stakes are high — in January players in the Garden State wagered four times as much online as in person. But the risks of money laundering, underage betting, gambling addiction and the integrity of sports wagers present challenges. And states, leagues and franchises are questioning whether wins and losses will take on a new meaning: whether once-dedicated fans will grow more attached to their bets than their team.

Despite these concerns, states acted reasonably to permit online sports betting. From 2011 until 2019, the DOJ considered state-legal online betting permissible so long as it did not involve sports. When the Supreme Court undid the prohibition on sports betting, states understood that online sports betting was equally permissible under federal law. Now, however, state-authorized online betting is at risk. The DOJ’s 2019 reinterpretation says the Wire Act prohibits the use of interstate wires for the placement of all types of bets, including those related to sports.

Muddying the waters further, the DOJ’s reinterpretation does not carry the force of law. Instead, it marks the DOJ’s litigation position: As of June 14, 2019, federal prosecutors may bring criminal charges against businesses using interstate wires for online betting. Unsurprisingly, states looking to capitalize on sports betting have cried foul.

Stakeholders will battle over the DOJ’s reinterpretation in two arenas. Publicly, states, betting operators and the DOJ will fight in court to test their conflicting understandings of the law on online and app-based sports betting. Privately, companies that offer or consider offering online sports wagers will debate the risks and rewards of offering the convenient betting environment so many fans expect. There will be winners and losers. Far from being the game point for sports betting, May 14, 2018, merely marked the beginning of a new period in an evolving contest.

Stephen Weiss and Christian Larson are members of the Sports Law Group at Cadwalader, Wickersham & Taft LLP. Cadwalader partners Jodi L. Avergun and Todd Blanche contributed to this column.

Questions about OPED submission guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com