Top 10 questions and answers regarding the US Supreme Court sports betting decision

17 May 2018

By Gary Trask

Since the U.S. Supreme Court issued a ruling on Monday that deemed the federal ban on sports wagering as unconstitutional, the general public and the mainstream media have produced a slew of questions, predictions and assumptions.

So, in the spirit of clearing up some of the uncertainties and false notions that have been bandied about over the last few days, below we present 10 common questions about the future of sports betting in the U.S., along with our answers and predictions about how dramatically and how soon the landscape will change.

10. OK, sports betting has been legalized. Where can I place my bet on tonight's games?
Slow down. Sports betting didn't all of a sudden become legal on Monday. What happened was the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA), giving states the right to individually decide themselves how, if and when they would like to introduce regulated wagering on sport events.

So, as of right now, the only place you can legally place a sports wager on a single game remains Nevada.

9. So, how soon will other states begin taking bets?
Soon, very soon. Of course, New Jersey has been at the forefront of this entire case and will be the first to benefit. Years ago, bookmaking giant William Hill built a sports bar at Monmouth Park Racetrack that is being transformed into a sportsbook. The company has been in the process of hiring sportsbook personnel for months and has just been waiting for SCOTUS to announce its decision. Initial reports were that Monmouth Park would open Memorial Day, but now it's looking more like early June.

It's safe to assume that the casinos and horse tracks elsewhere in the state aren't far behind. We should have full-blown Nevada-type sports betting in the Garden State this summer, and certainly by the start of football season in September.

8. That explains the situation in New Jersey. What about other states?
Twenty states have introduced some form of sports betting legislation, but Mississippi, West Virginia, Connecticut, New York, Delaware and Pennsylvania are the closest to making it official.

In fact, last week we laid out the reasons Mississippi could have a sports-betting monopoly in the south.

Biggest takeaway from last week's @SGamingSummit: Mississippi is primed to become "Las Vegas South" if/when sports betting becomes a reality. Here's why: https://t.co/QCiDLOUzei pic.twitter.com/FJ0ox95ip7

— Gary Trask (@casinocityGT) May 7, 2018

Best estimates are that within a year we will have between six and 10 U.S. states up and running and accepting bets, and more than 30 states within five years.

7. So, those states are looking at an immediate, giant payday, correct?
Yes and no. There's no doubt that the popularity of sports betting is on the rise. Last year, Nevada's sportsbooks won a record $248.7 million, smashing the previous record of $231.7 million set in 2015.

But in the grand scheme of things, sportsbooks are not a huge money maker for casinos. While that record-setting $248 million number is impressive, it's a fraction of the overall haul for the state's casinos. By comparison, slot machines remained the biggest revenue generator, accounting for 63.4% of total gaming profits. Table games were responsible for 32.6%, while sportsbooks contributed 2.1%, just above poker rooms (0.5%).

But there's no doubt that sportsbooks will draw a new customer to the casino, especially during football season and on "big event" days or weekends like March Madness, the Super Bowl and the Kentucky Derby.

6. But the American Gaming Association estimates that $150 billion is wagered offshore and with illegal bookies each year. Isn't some of that money going to enter to new legalized and regulated market?
Once again, yes and no.

The notion that legalized sports betting is all of a sudden going to put illegal bookmakers out of business is a far-fetched. First off, the typical bookie on the black market doesn't make his customers "post up" their money. They can bet on credit, meaning when they place a $100 bet on a game, they don't have to hand the $110 over the counter before making the wager. This is a huge advantage for the illegal bookmaker.

Secondly, in most instances, illegal bookies are now set up online. They aren't sitting in a back room somewhere answering phones. Bettors can log in online to place their bets, but still don't have to wire money to an offshore account somewhere in the Caribbean, so there is a huge convenience factor.

Thirdly, with all of the professional sports leagues trying to get their piece of a relatively small pie with these made-up "integrity fees," the states may have to charge more of a "vig" than the standard 11-to-10. For example, in Nevada or offshore, when you place a $200 bet, you must lay $220 to win that $200. That's where the sportsbooks make their money. Because the sports leagues are being greedy, the states may very well have to charge $225 or even $230 on a $200 bet in order to make ends meet, while the guy on the street corner will still be offering $220. No savvy or experienced bettor is going to pay extra "juice" if they don't have to. And even if they did, they would still have a relationship with their illegal bookie in order to have an extra "out" to bet with and shop for the best line.

Finally, most people who like to bet on games are already doing so, especially the ones who play big numbers. While legalized sports betting will definitely attract new customers, my guess is it will be more the casual bettor that will be placing 25 or 50 bucks on his favorite team and not driving to the sportsbook every day. The sportsbooks aren't all of a sudden going to have "whales" showing up at their property the first day they open.

5. What about the sportsbooks in Las Vegas? Are they afraid this will cost them some business?
This is not a huge concern, especially since many of them are going to be involved in the process in other states. As mentioned above, William Hill, a U.K. company that's now the largest bookmaker in Nevada, has been waiting for this opportunity for years and is ready to roll in New Jersey.

We spoke to Jay Kornegay, vice president of race and sports operations at the renowned SuperBook at the Westgate Las Vegas Resort & Casino a few weeks ago. He mentioned that they are already looking into expanding their brand in other states.

As for the bottom line at Sin City properties, no matter how lavish they make the sportsbooks in other states, it's going to be near impossible to replicate the full Las Vegas experience anywhere else. Vegas has it all. An abundance of world-class casinos, spas, pools, restaurants, golf courses, shopping, shows, events. You name it.

We heard the same things 25 years ago when all of the Indian casinos began opening across the country, and Las Vegas has more than survived.

Legendary Las Vegas bookmaker Jimmy Vaccaro, who is currently plying his trade at South Point Hotel Casino and Spa, put it best when we discussed the possibility of expanded U.S. sports betting last summer.

"Las Vegas is like the Disneyland of sports betting," he said. "There are plenty of other great amusement parks all over the country. But everybody still wants to go to Disney because they do it bigger and better than everyone else."

4. With the proliferation of sports betting, should there be a concern about more fixed games or point-shaving?
No! This is a common belief put forth by the uninformed. And it's frustrating to hear.

The sports gambling business is as heavily regulated as any industry in the country. The last thing the industry wants is point-shaving or match-fixing to ruin its integrity. If anything, a legal and regulated market overseen with a keen eye by licensed officials will help prevent these types of events and will be the first to blow the whistle if anything peculiar or unusual happens with a game's point spread or betting patterns.

3. Will I be able to bet on sports online?
Not immediately. Most of the states that are looking to pass sports betting legislation also plan to offer mobile wagering, but it's going to take time on the technology side of things to make it happen.

Best guess is that eventually most states will follow the Nevada model, where you must show up in person at a sportsbook or casino, open an account and deposit money. Then you download the app on your phone and place wagers from the comfort of your couch, the bar or the pool, as long as you are within state lines.

Over the last few years, we have tried most of the mobile sportsbook apps in Nevada and swear by the process. Nevada sportsbooks now say that more than half of their total action comes via a mobile device. This has been a total game-changer for the industry, so rest assured, the other states looking to set up shop will be doing everything they can to introduce mobile wagering as soon as possible.

2. Now that sports betting is expanding to other states, this should really help the proliferation of online poker, correct?
Poker pro Phil Hellmuth certainly thinks so:

Every Major sport (NBA, NFL, MLB) is behind the legalization of sports betting, and all of them will profit by it. But how can Sports Betting online be legalized w/out online poker being legalized (clearly more skill than sports betting)? The time is NOW to legalize online poker!

— phil_hellmuth (@phil_hellmuth) May 14, 2018

But the Poker Brat is a little off base here. And we turn to noted iGaming analyst and writer Steve Ruddock to explain precisely why:

If you're first thought on the SCOTUS sports betting decision was, "what about online poker?" Realize that up until today, PASPA prohibited states from legalizing sports betting. There is no such prohibition on online poker. Sports joined poker as a state level decision.

— Steve Ruddock (@SteveRuddock) May 14, 2018

Now, this isn't to say the introduction of sports betting on a state-by-state level will hurt the efforts of online poker. Any time we can help remove the "taboo" of betting in general and make it more mainstream, the better for everyone involved. And we may even see some instances where online poker "piggybacks" its way into legislation for sports betting. But, on the surface, there is no correlation between the demise of PASPA and legalizing online poker.

1. Other than the states that will profit from this and the general public who will finally be able to bet on sports freely and legally, who are the other "winners" of the SCOTUS decision?
Ironically, the professional sports leagues and the NCAA. And I say "ironically" because these are the exact entities that have been fighting against regulated sports betting for decades. Now, they stand to profit from it.

Dallas Mavericks owner Mark Cuban told CNBC, "It doubled the value of the professional sports franchises . . . It will increase interest, it will add to what happens in our arena and in stadiums. It will increase the viewership for our biggest customers online and on TV. It helps traditional television because it's much lower latency, whereas online, because of cachet, it's much higher latency."

There are some facts to back this up. The American Gaming Association, in conjunction with Nielson Sports, reported in 2016 that adults who bet on the NFL watched 19 more games during the 2015 season than adults who didn't bet at all, and estimated that if sports betting were legalized, the number of NFL regular season viewers who bet on sports would jump from 40 million to 57 million.

Of course, better TV ratings leads to bigger and more lucrative deals with the networks. Toss in the potential for sportsbook and casino partnerships to become more prevalent, and, yes, it appears the loss in court could turn out to be a good thing for the bottom line of professional sports leagues and their teams.

Another winner we must mention is the horse tracks. The horse racing industry is dying, but the addition of sports betting at the track will most certainly rejuvenate these venues and, quite possibly, attract some new fans to the sport.

Top 10 questions and answers regarding the US Supreme Court sports betting decision is republished from Online.CasinoCity.com.