Wednesday , August 15, 2018

What Would Legal Sports Betting Look Like? Many Are Turning to Nevada for an Answer

As legislatures eye geysers of tax revenue in the wake of the May 14 Supreme Court decision leaving legal sports betting up to each state, officials wondering how much that haul could be are looking to Nevada. It’s the only state that permits wide-open wagering on a full menu of sports, including single-game betting both at casino sports books and via mobile devices.

David Schwartz should know. He’s the director of the Center for Gaming Research at the University of Nevada at Las Vegas, and his phone has been ringing off the hook since that Supreme Court ruling. “I get a lot of calls every day,” Schwartz says. The callers, including officials with various state governments, are looking for “clarification,” he says, about sports betting’s potential.

Transaction processors, too, are looking to Nevada as a mature indicator of what the potential market could be as other states legalize sports betting. The Supreme Court has unleashed “the biggest expansion of the gaming market you’ll ever see,” says Joe Pappano, senior vice president of the gaming division at Worldpay Inc. Ultimately, he predicts, at least some states will mimic Nevada in allowing mobile bets. “Mobile has to be part of the offering,” Pappano says.

(Image credit: Benjamin Lambert on Unsplash)

Part of the curiosity about Nevada’s experience has to do with the fact that the CGR has compiled numbers on sports betting in the state going back to 1984. The story they tell is one of dramatic growth almost from the start. Gamblers put down an estimated $895 million on sports bets at 51 casinos and other locations in 1984, according to UNLV’s numbers. By 2017, that volume had ballooned to $4.9 billion and locations had swelled to 192.

Meanwhile, the amount sports books earned on this action—the sums they kept after cashing out winners—grew from almost $21 million to just under $249 million. The most popular sport for bettors is football, which attracted $1.76 billion in bets last year, or 36% of the $4.87 billion total. The No. 2 sport, basketball, took in $1.48 billion. Baseball ($1.14 billion), parlay-card bets, and other sports accounted for the remainder.

Multiple states have introduced bills at various stages aimed at authorizing, or at least relaxing restrictions on, sports betting. Some 15 states introduced bills in 2017, with several considering more than one, according to Legal Sports Report, a newsletter that follows sports betting. New Jersey, which legalized sports betting Monday, introduced a bill last year to legalize the activity at casinos and horse-racing tracks.

That followed a bill introduced earlier that would simply repeal the state’s longstanding ban on sports betting. Meanwhile, in Washington, D.C., there are two bills in the House of Representatives that would authorize states to legalize sports betting.

Nevada and three other states, Delaware, Montana, and Oregon, were exempted from the Professional and Amateur Sports Protection Act, the 1992 law that banned states from legalizing sports betting. That was the law the Supreme Court nullified last month. Earlier this month, Delaware started allowing single-game betting on a range of sports at any of the state’s three casinos. Before, the state only allowed parlay-card bets (bets on multiple game from a list of the day’s contests) and only on National Football League games.

But is it fair for these and other states to look at the example of Nevada, which after all has had time to develop a mature sports-betting industry—and has had the wide-open market pretty much to itself? Schwartz says he can’t blame those out-of-state officials for calling. Nevada’s experience, he says, is “the best example we have right now.’

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