https://www.crossingbroad.com/2018/...-in-pennsylvania-new-jersey-and-delaware.html
I spent the past two days at Harrah’s in Atlantic City, where the top brass in the legal sports betting industry were all present for the East Coast Gaming Congress.
The annual event is a meeting of the minds for all forms of gaming, from slots to casino hospitality, most of which doesn’t interest me even a little bit. But this year the focus was almost exclusively on sports gambling. It’s perhaps only a coincidence that Monmouth Park and the Borgata, a 17-minute walk from Harrah’s (speaking from experience), started taking bets during day two of the conference, just hours before Governor Phil Murphy addressed attendees.
Why did I go? Two reasons, to be honest:
1: To learn about where the industry is headed and pass along those findings to you, specifically because Philly is at the epicenter of the shift toward legal sports betting since Pennsylvania, New Jersey and Delaware will likely be the first three states to allow it following the Supreme Court’s ruling last month.
2: Business interests, Holmes.
Right now, things are confusing to consumers and would-be bettors. When can I bet? How? Where? And beyond that, just have pervasive and what forms will sports betting take in the US?
I’m here to summarize the event and answer your questions.
Where and when will this all be legal?
In-person betting is currently fully legalized in Delaware and New Jersey. Today, you can go place a bet at Delaware Park, Dover Downs and Harrington Raceway in Delaware, and Monmouth Park and the Borgata in New Jersey, with many more to follow.
Pennsylvania, which had already approved a bill, is running a little bit behind, mostly due to the $10 million licensing fee and ludicrous 36% tax rate they are requiring from casinos. This is a major point of contention, as are the sports leagues’ requests for integrity fees, which we’ll get to in a second.
That being said, Susan Hensel, the director of licensing for the Pennsylvania Gaming Control Board, said she expects in-person sports betting to go live in PA before football season.
What about online betting?
Delaware: Don’t know. It wasn’t part of the bill that recently passed, but it is expected to be coming.
New Jersey: 30 days. Hensel’s counterpart in New Jersey, David Rebuck, explained that many operators had moved to put systems in place to be ready for legal New Jersey sports betting, meaning that online sports betting in the state is expected to go live next month, with several sites and apps offering action. Others will surely follow.
Pennsylvania: While casino betting may be here before football season, online betting will lag behind, perhaps until the end of the year. It’s coming, and it’s in the bill, but getting casinos up and running will come first.
Which sites and apps will be available?
In New Jersey, William Hill and DraftKings seem specifically well-positioned to offer options soon. They have each partnered with casinos and will likely be the public-facing options. Bet 888, and The Stars Group, owners of PartyPoker and Sky Bet, who had reps on stage with Hensel and Rebuck, were lauded as being fast movers, so they’ll likely have offerings ready to go as well. Unlike daily fantasy sports, which has essentially to main players – DraftKings and FanDuel – the online gaming space is ROBUST and there will likely be many offerings, which we’ll list and review as they become available in our sports betting guide.
The push for mobile sports betting:
There were two themes at the conference, and the biggest one was the importance of mobile betting. Something like 70% of the market in Europe is mobile or real-time betting. Many of these are prop bets. This is the growth area, no doubt about it.
Consider this stat: There is $150 billion wagered on sports in the US each year. Only $3 billion of that is in Nevada. The other $147 billion is either through illegal bookies or non-regulated offshore sites.
The gaming industry wants a piece of that market.
They will compel states to adopt favorable regulations in order to offer competitive mobile betting products. This centers around real-time or “in-play” betting.
This takes many forms.
The most obvious example is a second half betting line that may be available during a basketball or football game. But the ubiquity of mobile devices creates many more possibilities. You can bet on the next series, drive or play. It’s the second screen experience for sports– everything from “who hits the next three-pointer” to new moneyline odds being offered throughout the game. This type of betting is arguably more fun (and addictive) and is the growth area for the industry.
How to compete with offshore sites:
The industry is well aware that anyone can go online and place a bet today.
How do they beat the offshore sites?
The main message was that aggressive tax rates would pass along costs to the customer, presumably in the form of poorer odds. They showed studies indicating that a 10%-15% tax rate is the range which guarantees the greatest output for the state before significant customer losses. Again, Pennsylvania is currently at 36.
Further, the offshore market excels in online betting. Some states, like Mississippi, will legalize sports betting but not allow it online. That is a mistake. It misses the entire point of this movement (for states), which is to maximize tax revenue. Not allowing online sports betting leaves a lot of money on the table… or perhaps just sends it to Costa Rica, where many of the offshore sites are located.
League partnership:
One way the regulated space could have an edge over offshore sites is in partnering with the leagues, both in terms of branding (expect sponsorships) and data.
Think about real-time betting, perhaps a wager on pitch speed (will someone throw 100 mph this game?). Who verifies the data? Unlike scores and basic stats, which can be easily checked against an official box score, data required for prop bets may need a trusted partner. This can both provide a competitive advantage over the black market and create revenue opportunities for the leagues, which can license the data to sportsbooks.
To be clear, the gaming industry wants to partner with the leagues– they just don’t want states to mandate a 1% integrity free, something which thus far has been met with resistance from the states anyway. The league will profit regardless through increased interest and viewership, but it seems the way to get money directly from the operators is through direct business relationships.
Frictionless experience:
Thankfully, the legalization of online gaming for poker and such in New Jersey and Delaware has paved the way for sports. Credit card processing was an early hurdle in those verticals because banks were worried about fraud. Once the gaming industry proved that it could effectively police itself, Visa, MasterCard and others became more amenable to handling the transactions.
The gaming industry knows it needs to make depositing (and withdrawing!) money a painless experience. This creates a literal instant advantage over the corner bookie, and having a regulated operator take your action is a safer experience than playing with offshore sites.
Geo-fencing:
Anna Sainsbury, the CEO of GeoComply USA, a company that provides geo-fencing services for iGaming products, talked about ways to effectively ensure players are in-state. That part is relatively simple. But consider the New Jersey commuter who goes into PA or NY every day. What if they can’t place a bet from work? With states like Pennsylvania, New Jersey and Delaware all being linked, there was some discussion about allowing wagering across states lines. That’s an area that has yet to be fully worked out, though the industry is aware that creating a consumer-friendly solution is important.
Hammering the states:
I would say some speakers wavered between compelling and hammering the states to get with it. Online betting is a major growth area, and so is esports. New Jersey won’t allow betting on esports, a last-minute shift that seemed to surprise many. More people bet on esports than hockey last year. It’s a huge growth area and quickly becoming a mainstream sport. The industry very much wants states to think more progressively in this regard.
Federal regulation:
Geoff Freeman, the outgoing CEO of the American Gaming Association, said there was essentially no chance of federal regulation for sports betting. It sounds like it will remain a state issue.
Which states are next?
This is taken directly from an AGA slide on which states they feel will move to legalize sports betting next:
Live
Delaware
New Jersey
Nevada
2018
Pennsylvania
West Virginia
Mississippi
TBD
New York
Ohio
Connecticut
Rhode Island
2019
Colorado
Illinois
Indiana
Iowa
Kansas
Massachusetts
Missouri
Texas
1-2 years
Maine
Maryland
Michigan
Oklahoma
Kansas
5 years
Florida
Louisiana
Kentucky
North Dakota
Wyoming
Idaho
Washington
California
Arizona
New Mexico
Sponsorships:
This goes without saying, but as more states come online, gambling sponsorships will begin to pervade sports. Almost every major soccer team in the Premier League has a gambling partner. Expect much the same here.
Addiction:
One thing I was pleasantly impressed with was the relative morality on the stage. To be clear, it’s the same platform on which someone mentioned “coin in rate” – how many times slot players could deposit money in a minute – but there was plenty of talk about a more holistic approach to sports betting– rather than milk players out of every penny and gratuitously advertise disingenuous opportunities, the industry is aware both from a human and business standpoint that it’s in their best interest to avoid some of the worst instincts the industry has.
Overall, I was encouraged by the industry’s understanding that responsible mobile gaming is the future of sports betting. They have their act together, and mostly in a way that wouldn’t disgust the average person. It’s a small gold rush, for sure, but they seem to be approaching it in a very realistic and measured fashion.
I spent the past two days at Harrah’s in Atlantic City, where the top brass in the legal sports betting industry were all present for the East Coast Gaming Congress.
The annual event is a meeting of the minds for all forms of gaming, from slots to casino hospitality, most of which doesn’t interest me even a little bit. But this year the focus was almost exclusively on sports gambling. It’s perhaps only a coincidence that Monmouth Park and the Borgata, a 17-minute walk from Harrah’s (speaking from experience), started taking bets during day two of the conference, just hours before Governor Phil Murphy addressed attendees.
Why did I go? Two reasons, to be honest:
1: To learn about where the industry is headed and pass along those findings to you, specifically because Philly is at the epicenter of the shift toward legal sports betting since Pennsylvania, New Jersey and Delaware will likely be the first three states to allow it following the Supreme Court’s ruling last month.
2: Business interests, Holmes.
Right now, things are confusing to consumers and would-be bettors. When can I bet? How? Where? And beyond that, just have pervasive and what forms will sports betting take in the US?
I’m here to summarize the event and answer your questions.
Where and when will this all be legal?
In-person betting is currently fully legalized in Delaware and New Jersey. Today, you can go place a bet at Delaware Park, Dover Downs and Harrington Raceway in Delaware, and Monmouth Park and the Borgata in New Jersey, with many more to follow.
Pennsylvania, which had already approved a bill, is running a little bit behind, mostly due to the $10 million licensing fee and ludicrous 36% tax rate they are requiring from casinos. This is a major point of contention, as are the sports leagues’ requests for integrity fees, which we’ll get to in a second.
That being said, Susan Hensel, the director of licensing for the Pennsylvania Gaming Control Board, said she expects in-person sports betting to go live in PA before football season.
What about online betting?
Delaware: Don’t know. It wasn’t part of the bill that recently passed, but it is expected to be coming.
New Jersey: 30 days. Hensel’s counterpart in New Jersey, David Rebuck, explained that many operators had moved to put systems in place to be ready for legal New Jersey sports betting, meaning that online sports betting in the state is expected to go live next month, with several sites and apps offering action. Others will surely follow.
Pennsylvania: While casino betting may be here before football season, online betting will lag behind, perhaps until the end of the year. It’s coming, and it’s in the bill, but getting casinos up and running will come first.
Which sites and apps will be available?
In New Jersey, William Hill and DraftKings seem specifically well-positioned to offer options soon. They have each partnered with casinos and will likely be the public-facing options. Bet 888, and The Stars Group, owners of PartyPoker and Sky Bet, who had reps on stage with Hensel and Rebuck, were lauded as being fast movers, so they’ll likely have offerings ready to go as well. Unlike daily fantasy sports, which has essentially to main players – DraftKings and FanDuel – the online gaming space is ROBUST and there will likely be many offerings, which we’ll list and review as they become available in our sports betting guide.
The push for mobile sports betting:
There were two themes at the conference, and the biggest one was the importance of mobile betting. Something like 70% of the market in Europe is mobile or real-time betting. Many of these are prop bets. This is the growth area, no doubt about it.
Consider this stat: There is $150 billion wagered on sports in the US each year. Only $3 billion of that is in Nevada. The other $147 billion is either through illegal bookies or non-regulated offshore sites.
The gaming industry wants a piece of that market.
They will compel states to adopt favorable regulations in order to offer competitive mobile betting products. This centers around real-time or “in-play” betting.
This takes many forms.
The most obvious example is a second half betting line that may be available during a basketball or football game. But the ubiquity of mobile devices creates many more possibilities. You can bet on the next series, drive or play. It’s the second screen experience for sports– everything from “who hits the next three-pointer” to new moneyline odds being offered throughout the game. This type of betting is arguably more fun (and addictive) and is the growth area for the industry.
How to compete with offshore sites:
The industry is well aware that anyone can go online and place a bet today.
How do they beat the offshore sites?
The main message was that aggressive tax rates would pass along costs to the customer, presumably in the form of poorer odds. They showed studies indicating that a 10%-15% tax rate is the range which guarantees the greatest output for the state before significant customer losses. Again, Pennsylvania is currently at 36.
Further, the offshore market excels in online betting. Some states, like Mississippi, will legalize sports betting but not allow it online. That is a mistake. It misses the entire point of this movement (for states), which is to maximize tax revenue. Not allowing online sports betting leaves a lot of money on the table… or perhaps just sends it to Costa Rica, where many of the offshore sites are located.
League partnership:
One way the regulated space could have an edge over offshore sites is in partnering with the leagues, both in terms of branding (expect sponsorships) and data.
Think about real-time betting, perhaps a wager on pitch speed (will someone throw 100 mph this game?). Who verifies the data? Unlike scores and basic stats, which can be easily checked against an official box score, data required for prop bets may need a trusted partner. This can both provide a competitive advantage over the black market and create revenue opportunities for the leagues, which can license the data to sportsbooks.
To be clear, the gaming industry wants to partner with the leagues– they just don’t want states to mandate a 1% integrity free, something which thus far has been met with resistance from the states anyway. The league will profit regardless through increased interest and viewership, but it seems the way to get money directly from the operators is through direct business relationships.
Frictionless experience:
Thankfully, the legalization of online gaming for poker and such in New Jersey and Delaware has paved the way for sports. Credit card processing was an early hurdle in those verticals because banks were worried about fraud. Once the gaming industry proved that it could effectively police itself, Visa, MasterCard and others became more amenable to handling the transactions.
The gaming industry knows it needs to make depositing (and withdrawing!) money a painless experience. This creates a literal instant advantage over the corner bookie, and having a regulated operator take your action is a safer experience than playing with offshore sites.
Geo-fencing:
Anna Sainsbury, the CEO of GeoComply USA, a company that provides geo-fencing services for iGaming products, talked about ways to effectively ensure players are in-state. That part is relatively simple. But consider the New Jersey commuter who goes into PA or NY every day. What if they can’t place a bet from work? With states like Pennsylvania, New Jersey and Delaware all being linked, there was some discussion about allowing wagering across states lines. That’s an area that has yet to be fully worked out, though the industry is aware that creating a consumer-friendly solution is important.
Hammering the states:
I would say some speakers wavered between compelling and hammering the states to get with it. Online betting is a major growth area, and so is esports. New Jersey won’t allow betting on esports, a last-minute shift that seemed to surprise many. More people bet on esports than hockey last year. It’s a huge growth area and quickly becoming a mainstream sport. The industry very much wants states to think more progressively in this regard.
Federal regulation:
Geoff Freeman, the outgoing CEO of the American Gaming Association, said there was essentially no chance of federal regulation for sports betting. It sounds like it will remain a state issue.
Which states are next?
This is taken directly from an AGA slide on which states they feel will move to legalize sports betting next:
Live
Delaware
New Jersey
Nevada
2018
Pennsylvania
West Virginia
Mississippi
TBD
New York
Ohio
Connecticut
Rhode Island
2019
Colorado
Illinois
Indiana
Iowa
Kansas
Massachusetts
Missouri
Texas
1-2 years
Maine
Maryland
Michigan
Oklahoma
Kansas
5 years
Florida
Louisiana
Kentucky
North Dakota
Wyoming
Idaho
Washington
California
Arizona
New Mexico
Sponsorships:
This goes without saying, but as more states come online, gambling sponsorships will begin to pervade sports. Almost every major soccer team in the Premier League has a gambling partner. Expect much the same here.
Addiction:
One thing I was pleasantly impressed with was the relative morality on the stage. To be clear, it’s the same platform on which someone mentioned “coin in rate” – how many times slot players could deposit money in a minute – but there was plenty of talk about a more holistic approach to sports betting– rather than milk players out of every penny and gratuitously advertise disingenuous opportunities, the industry is aware both from a human and business standpoint that it’s in their best interest to avoid some of the worst instincts the industry has.
Overall, I was encouraged by the industry’s understanding that responsible mobile gaming is the future of sports betting. They have their act together, and mostly in a way that wouldn’t disgust the average person. It’s a small gold rush, for sure, but they seem to be approaching it in a very realistic and measured fashion.
