Toward the end of the series finale of Boardwalk Empire, Nucky Thompson, played so well be the actor Steve Buscemi for these past few years, turns to a young man in his employ and makes a reference about sweeping the sand off the front porch. Thompson knows from his work as a youth in the hotel business that the sweeping is the same as trying to battle against the tide, inevitably you lose, as wind and sane and nature will have their way.
While not exactly the same, it is becoming more and more apparent that the fight for legalized sports betting in some way, shape or form, not just in New Jersey but across the country, is a battle that eventually will be regulated and won out, and will be a major, major revenue stream for sports teams and leagues down the line.
For now, State legislators continue to battle the Federal law prohibiting sports betting while states far and near grandfathered into the system, find ways to make a solid profit. This past week John Brennan, perhaps the best authority in the media on the sports betting fight, had an extensive piece on how Delaware has used its loophole to create a profitable sports wagering system that has boosted the coffers of small business that have worked the lottery system for years. One part of the story has stores setting up kiosks and tents OUTSIDE their stores on Sunday mornings to take advantage of blue laws prohibiting them to open before noon, because the demand for NFL (called “pro football” to get around an NFL trademark issue) is so high. Nevada continues to thrive on their sports betting operations, and other states have quietly assembled “gambling czars to work on horse racing, casino and other currently legal forms of sports gambling, while keeping an eye out for best practices that states can take advantage of as loopholes and opportunities open up for sports wagering. Be in position to strike quickly, the theory is.
Every week that passes there is another chink in the armor in the fight that states, especially New Jersey, are making in this battle for a revenue stream that is very fertile around the world. Two years ago the NCAA banned New Jersey colleges and university from hosting post-season events because of the State’s challenge to legalized sports betting, and that banishment was overturned last year. The New Jersey Devils and the Philadelphia 76ers had two firsts in the space, first with an online poker sponsorship and then last month the Devils struck a first-ever team deal with New Jersey based Hot Box Sports to create a team pay fantasy game for the first time. NBA commissioner Adam Silver has been the most vocal and bullish of all the major sports heads on the subject, stating in September that he supported legalized gambling and stating time and again that it will be inevitable and a big source of income for the leagues and the clubs if and when it does happen…with more stress on the when than the if.
This week a good amount of focus fell on the political front, where pundits weighed in on whether the shift in power from the Republicans to the democrats in the Senate could affect the viability of the anti-sports betting lobby outside of Nevada. Senator-elect Cory Booker of New Jersey, a former football player himself, has yet to formally and fully engage in the subject, but his input now that he has a six year term could be very important as the issue grows more and more from a New Jersey issue to a national issue.
Is sports wagering inevitable, and is it the cash cow many predict? In a state like New Jersey it’s hard to say, but it does present great opportunity not as much for casinos but for the income a lottery-style taxed game can bring in to the state coffers. The loopholes with programs like pay fantasy football are becoming stronger and stronger and teams and leagues are seeing income from those streams become more and more a reality. The Brooklyn Nets just became the latest team to add a fantasy sports partner, and more will follow. The leagues and the NCAA will continue to monitor and keep the engine revving should laws change and continue to adjust. The NFL’s announcement this week of an expansion even more to games in London, along with the New England Patriots’ Tom Brady signing a sponsorship deal for a company called FantasyMVP, raise more questions about the validity of legalized gambling in sport. London has long carried NFL gaming lines, and there is no issue with patrons of legal betting parlours wagering on the games there, although the NFL has no affiliation and doesn’t yet profit in the take.
But why wouldn’t or shouldn’t the league profit from an industry that is global and currently unchecked in many places. The theory is that the leagues would make the money not on running betting entities but on the licensing and use of data and on each transaction. Given the fact that mobile usage and connectivity is growing daily in stadia, the amount of revenue leagues and teams could make…think of the amount of activity in a baseball game where every pitch, every swing could be a transaction…is something that could dwarf almost all other sources, except maybe live broadcast rights.
Other “vices,” lottery, hard liquor and spirits, casino advertising, fantasy sports, once taboo are now accepted by professional leagues as legitimate sources of income. Sports gambling will be the next, and maybe the greatest hurdle with the most upside. As the consumer clamors for more access and affordable prices, teams and leagues need to find new revenue sources, and gaming is the biggest one sitting out there to be had.
Are there issues and concerns about game fixing or an illegal element that could go on? Yes. But those concerns have been weighed and dealt with for every other questionable revenue stream, and federal acceptance and legislation can and will be a big step in legitimizing what will come. It will be smart, calculated, engaging and very profitable.
So as New Jersey politicians and track operators continue to wage a battle in the courts against the anti-sports gaming lobby, other states and companies who have found a way make their money; some boldly, some quietly. Many businesses small and large are following and hoping that the gamble The Garden State is taking will be an economic win for all in the long run.
Until that happens, all bets, legal ones outside of Nevada anyway, are off.