The Super Gamble Fight Continues

We reach Super Bowl weekend, a spectacle that has advanced well beyond the vision that Commissioner Pete Rozelle and the others in charge of the AFL/NFL merger had probably even envisioned. So little is about the wins and losses of the teams on the field, the Ravens and the 49ers, and so much more is about the buzz, the National Anthem, the commercials and the social media…and the gambling.

According to the Nevada Gaming Control Board, approximately $93.9 million was wagered on the 2012 Super Bowl at sports books across the state, the largest total ever for a Super Bowl, but most of that figure was returned to bettors in the form of winnings. After paying out to bettors, Nevada sports books earned $5.1 million on 2012’s game. Certainly not a figure that would be a cause for major investment, however when you consider of the total amount bet on the Super Bowl, only about 1.5 percent is wagered legally; these bets are made by those over age 21 and physically present in the state of Nevada.

So there you have the reason why New Jersey Governor Chris Christie and fellow legislators like Frank LoBiondo and Frank Pallone are going head to head with all comers…the Federal Government, every professional sports league and the NCAA, to overturn a law that gives the State of Nevada and its casinos the only legal sports books in the United States. It is a law that New Jersey legislators feel is unfair and should it be overturned, will open the way to re-energize the State’s casinos and racetracks and bring millions in much needed taxable income to the infrastructure of the State, much like the lottery and the casinos originally did when they were first brought into State control.

The concept of well-run, corruption free sports wagering is not new around the world, but it is new to the United States outside of Nevada. In the UK, sports gambling, especially with mobile devices is an accepted part of the fan experience, with millions of regulated dollars flowing to government and private entities. Teams have official gambling partners, and many athletes, including tennis superstar Rafael Nadal, endorse an online or traditional bookmaking partner. In the US, it is still seen as a dirty business run out of back rooms.

That all appears to be slowly changing at least in the eye of some legislators. The monopoly that Nevada has should come to an end, and many states, with New Jersey and possibly Delaware leading the way, some quietly, some boldly, to help open up the regulated flow of dollars into a sports book.

For their part, the professional leagues and the NCAA are holding firm with the Federal government against New Jersey. The NCAA has even pulled several championship events from state colleges because of the tact officials have taken to try and change the law…a move, when you consider that fact that the NCAA allows college basketball games to take place in venues within casinos in places like Connecticut and Nevada, seems very petty and hurts the schools more than the State.

It is also worth noting that the WNBA has both a team playing in a venue that is in a casino (The Connecticut Sun at Mohegan Sun) and this past week had a team approve a casino as a jersey sponsor (Osage Casinos on the front of the Tulsa Shock jersey, not as a patch but across the front of the uniform). Teams in most professional sports in the US also are allowed casino sponsors to bring in millions in advertising  as well, and Canadian franchises like the Montreal Canadiens and Toronto Raptors  even have advertising for online gambling sites surrounding their rink at the Bell Centre and the court at the Air Canada Center.  All of which is perfectly legal and very much regulated, but there is no public outcry at all when these entities that involve gambling are infused into professional sport.

As the Super Bowl comes to New Jersey next year, it will be interesting to see where the fight goes. The leagues, without admitting it, are leaving millions on the table in revenue by not having the federal law overturned and States continue to see large amounts which could go to public projects go instead to shady backroom organizations that are not controlled.  This also doesn’t include the millions that could be generated as mobile technology and second screens become more infused with the revenue of sport in North America. The more you can keep fans engaged, the more revenue you stand to make. The more new revenue streams, the less the chance there is to raise ticket prices.

Now this is not to say that the floodgates of legal sports gambling should just open without more study and strong regulations. It’s also not to say that everyone in a Super Bowl pool should suddenly turn their $20’s and $50’s earned into the IRS. What it does is cast another light on a very valuable revenue stream in its biggest one weekend of the year and open healthy debate as to whether an old law should be revisited for the betterment of millions, or whether the status quo should hold and sport should find other streams of revenue.

It is certainly a game, maybe the biggest game, worth watching in sports business in the coming months, especially with Super Bowl 2014 poised to take place in the state looking to upset the gambling applecart again, much like it did with casinos in the 1970’s.