Winners, losers of sports betting legalization
David Purdum and Darren Rovell, ESPN
The Supreme Court’s landmark decision on Monday to strike down PASPA (Professional and Amateur Sports Protection Act) — the 1992 federal ban on legal sports betting in the United States — lays the groundwork for the creation of a multibillion-dollar market. Like a buzzer-beater that covers the spread, the ruling immediately creates winners and losers.
Let’s run through some.
Winners
New Jersey: The Garden State spent $8.6 million in legal fees during a six-year fight with the sports leagues. New Jersey got knocked down repeatedly and looked down and out when in June 2014 the Supreme Court declined to hear then-Gov. Chris Christie’s first plea. The state regrouped, pulled off a stunning upset and now appears poised to reap the benefits. Gaming research firm Eilers & Krejcik’s most conservative estimate has New Jersey generating $250 million in sports betting revenue a year.
Owners: Mark Cuban said the value of sports franchises doubled instantly when the Supreme Court released its ruling Monday. That seems a little bullish, but the next set of TV contracts will tell the story. With the NFL deals up after the 2022 season and the NBA deals up after the 2024-25 season, there’s plenty of time for the betting market to mature. By that time, Amazon could become a broadcaster and a betting operator.
Sports data companies: Stat services have been the gambling play for sophisticated investors for years now, as the right information is the new oil. The companies that have relationships with the leagues and already understand what gamblers want are in a prime position. Sportradar, Perform and Genius Sports, for example, already have established partnerships with sports leagues. They also have the infrastructure in place to gather and disseminate data.
In the future, that data will be currency, with the speed and reliability of it adding to its value. Cuban, Washington Wizards and Capitals owner Ted Leonsis and Charlotte Hornets owner Michael Jordan are among the investors in Sportradar.
Gambling companies: Names like MGM, Boyd Gaming and Caesars Entertainment saw their stocks rise on Monday, as did British firms Ladbrokes, William Hill and Paddy Power Betfair. Since the latter have spent years in the legalized gaming business, they have a huge head start. American gambling companies are adept at risk management and are motivated to stay relevant.
The betting public: The majority of recreational sports bettors — say, those who drop 20 bucks on a game for fun — will have a recourse through gaming regulators that they don’t currently enjoy in the underground market. They will be assured of getting paid when they win and won’t have to mess with any of the hassle of shipping money offshore or sneaking it in an envelope to their local bookie.
Legal bookmakers: Americans aren’t exactly killing it with their sports picks. Statewide, Nevada sportsbooks haven’t had a losing month since July 2013. It remains good to be the house.
Rest is here…