US Court Opens Sports Betting Market, Now What Happens?
When the US Supreme Court released its landmark decision on sports betting earlier this week, it opened the gates for US States to make the decision regarding this lucrative gaming sector themselves. While this is, ostensibly, good news for the gambling industry there are still a few questions about exactly what happens next?
Here are a few things to watch for as the American gambling industry gets ready to add sports betting to its ecosystem.
How long will it be before Americans can actually place a legal sports bet? If you live in New Jersey, you’ll probably be able to start placing legal wagers as soon as next week. New Jersey casinos and race tracks are the tip of the spear here and have been locked and loaded for year. They’re betting big that sports wagering can breath new life into their struggling Atlantic City casinos.
If you live in one of the other 17 states considering legislation authorizing their casinos and race tracks to offer sports betting, you might have to wait a while. Across the country, lawmakers are hammering out a state-by-state patchwork of regulations that vary on issues such as, “Who can offer sports betting?”and “Will the pro sports leagues get a cut of the action?”. Given that most legislatures don’t meet during the summer months, there probably won’t be much movement until next year’s sessions.
Will the NFL and other leagues make money off of sports betting? The short answer here is, “yes.” After decades of complaining about the damage that regulated sports betting will do to the “integrity of the game” most of the leagues will, in fact, cash in on the sports betting land rush. Their biggest revenue stream will come from selling their data feeds to sports books to use in live betting. In fact, we’re seeing many states including a provision giving the leagues a monopoly on such data to licensed sports books.
And then there’s the issue of the “integrity fee”. The professional sports leagues are demanding that states authorize a one percent “integrity fee” on sports books to help cover the expense of additional monitoring of their games to prevent fraud. Whether this one percent comes from the handle (all the money wagered) or the gross revenue (the actual profit) is a major issue.
If the integrity fee comes from the handle, it’s going to cost casinos a lot of money and could seriously stifle the growth of sports betting.
If the integrity fee comes from the gross revenue, it’s going to be a very small revenue source.
At the end of the day, it’s likely that that one percent will be whittled down to something much smaller. Some sources have even suggested that it’s more likely to be something like .25 percent.
Finally, there’s the question of how do tribal gaming interests play into the picture? Indian gaming is overseen by the federal government and, so far, there’s been no federal legislation on regulated sports betting. (That’s the crux of the Supreme Court’s decision.)
For now, Indian casinos will have to abide by the laws of the states they’re in as the US Congress is wholly incapable of passing any sort of legislation. Should the Feds write their own sports betting bill, that’s the one that tribal gaming will have to abide by.
In short, while sports betting is technically “legal” in the US, there’s still a lot of work to be done before it’s actually normalized and available to wager-hungry Americans.