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Volume 22 No. 27
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Sports gambling: True aftershocks on horizon

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