THE AGENDA
BY ROGER GROS , PUBLISHER
Sports Betting Stumbles
Who would have ever thought that sports betting would not be the boon that everyone thought it was going to be ? The numbers weren ’ t off , just beneficiaries .
Sports betting seems to have left the land-based casinos behind , except for MGM , which made the wise choice of partnering with Entain early on , solving its technology questions immediately . And that seems to be a large part of the problem .
There were several companies that tried to invent technology , and it just didn ’ t work . Bally ’ s scrapped Betworks last month , and build-fromscratch systems at several companies just haven ’ t worked . Caesars ’ purchase of William Hill has taken a while to evolve , but is showing signs of life now . Given MGM ’ s experience with Entain , it seems partnerships make more sense .
Still , they ’ ve all taken a back seat to the DFS giants , FanDuel and DraftKings , which at least developed systems that worked during those heady DFS days . When DFS was effectively shut down in most states , and licenses were required , they were ready to go with the systems and the compliance needed to hit the ground running .
And then when the first state with full-blown sports betting ( and all other betting ) got most of it right , subsequent states didn ’ t catch on . I don ’ t want to say they got it wrong , but when a state is looking for the most revenue from sports betting it doesn ’ t always follow that higher taxes equal more revenue , especially from a business with narrow margins to start with . Now , there are some states that nailed it . Indiana , Colorado , Arizona — with its particular Indian gaming segment of the market thrown in .
Remember , there ’ s really only small dollars to be made in sports betting given the small margins . So companies with a late start or uncertain strategy are going to have a difficult time competing . And states that really don ’ t understand how to make the most money are going to be disappointed .
But one of the correct things New Jersey did — prior to the legalization of sports betting — was the approval of online gaming . Only a few states followed . In Pennsylvania , the state basically blackmailed potential sports betting companies by requiring that they obtain a sports betting license before they receive an online gaming license — all at hefty fees , of course .
But Michigan hit a home run when they not only included online gaming in the legalization bill , but also incorporated all the various gaming players in the state — the lottery , commercial casinos in Detroit and tribal casinos across the state — with a fair tax rate , and serious but rational regulations and a chance to make real money both for the companies / tribes and the state . Michigan quickly became the second most successful interactive gaming state in the nation .
But since then , there has been a strange reluctance for other states to follow suit , despite the positive examples .
Perhaps it ’ s the bad example of advertising emanating from the sports betting circles . The “ risk-free ” and “ free bets ” enticements are dangerous not just to problem gamblers but also to public perception of betting in general . It can be seen as predatory , particularly by legislators who are being asked to vote on online gaming .
While the American Gaming Association has set up a series of ethical advertising standards that make sense and are very reasonable , competition is fierce . There are more than 30 companies involved in U . S . sports betting , and most of them have a miniscule market share . The temptation of catching lightning in a bottle is often too great and a company ’ s future may rest on it , so in a way it ’ s understandable .
But we have to be even more diligent and focused . I remember when I went to my first soccer game in the U . K ., and discovered to my surprise that there was a sportsbook underneath the stands . Now I don ’ t know why I was surprised . I knew betting on sports was rampant in the U . K ., and many of the clubs had logos of sportsbooks on their jerseys . Now , the sportsbooks being built around the stadiums and the arenas in this country are a far cry from the small book that was under the stands in the U . K ., but what does that say about our enthusiasm for betting ?
Now that the U . S . has quickly followed that lead , I feel the same way . Does it somehow taint the contest and cast doubt on its integrity , especially when it comes to amateur sports ? Maybe we should pause the links between teams , leagues and institutions to ensure every relationship conforms with the AGA policies .
Vol . 22 • No . 5 • MAY 2023
Roger Gros , Publisher | rgros @ ggbmagazine . com twitter : @ GlobalGamingBiz
Frank Legato , Editor | flegato @ ggbmagazine . com twitter : @ FranklySpeakn
Jess Marquez , Managing Editor jmarquez @ ggbmagazine . com
Monica Cooley , Art Director mcooley @ ggbmagazine . com
Terri Brady , Sales & Marketing Director tbrady @ ggbmagazine . com
Becky Kingman-Gros , Chief Operating Officer bkingros @ ggbmagazine . com
Lisa Johnson , Communications Advisor lisa @ lisajohnsoncommunications . com twitter : @ LisaJohnsonPR
Columnists Cait DeBaun | Frank Fantini
Contributing Editors Dave Bontempo twitter : @ bontempomedia John Brennan | Alan Campbell | Jack Goodin Marjorie Preston | Bill Sokolic twitter : @ downbeachfilm Michael Soll _______________
EDITORIAL ADVISORY BOARD Rino Armeni , President , Armeni Enterprises
• Mark A . Birtha , Senior Vice President & General Manager , Hard Rock International
• Julie Brinkerhoff-Jacobs , President , Lifescapes International
• Nicholas Casiello Jr ., Shareholder , Fox Rothschild
• Jeffrey Compton , Publisher , CDC E-Reports twitter : @ CDCNewswire
• Dean Macomber , President , Macomber International , Inc .
• Stephen Martino , Vice President & Chief Compliance Officer , MGM Resorts International , twitter : @ stephenmartino
• Jim Rafferty , President , Rafferty & Associates
• Thomas Reilly , Vice President Systems Sales , Scientific Games
• Michael Soll , President , The Innovation Group
• Katherine Spilde , Executive Director , Sycuan Gaming Institute , San Diego State University , twitter : @ kspilde
• Ernie Stevens , Jr ., Chairman , National Indian Gaming Association twitter : @ NIGA1985
• Roy Student , President , Applied Management Strategies
•
David D . Waddell , Partner Regulatory Management Counselors PC
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4 Global Gaming Business MAY 2023