Are we boldly going where we have never gone before, with legalized sports gambling across the 50-states and maybe even in stadium?
This quickly became the talk of the Internet two weeks ago when NBA Commissioner Adam Silver floated that gambling on professional sports is eventually going to become legal outside of Las Vegas. Incredibly, this shift in the NBA’s sentiment is partially occurring because of the decline of east coast gambling hub: Atlantic City, New Jersey.
Dubbed ‘America’s Favorite Playground’ and to many known as the home and dominion of the fictional character Enoch Malachi “Nucky” Thompson, Atlantic City brings a varied numbered of thoughts from those you would ask. But the city that Bruce Springsteen so famously described in a song of the same name is starting to embody the line: ‘Down here it’s just winners and losers and don’t get caught on the wrong side of that line.’
For at Atlantic City, it has been coming up snake eyes lately, and it is falling into the loser category faster than expected. Three casinos have closed or will close by the end of September 2014, dropping the active number to just six. In 2012, Atlantic City had 14 open and functional casinos. Governor Chris Christie, in 2012 potentially forecasting Atlantic City’s decline decided to challenge the Professional and Amateur Sports Protection Act of 1992, so that New Jersey could begin taking bets on Professionally and potentially Amateur sporting events. After much waffling Gov. Christie, gave a directive that would allow casinos and horse tracks to accepts sports bets.
Silver’s comments seemed to be in direct response to Christie’s push:
“It’s inevitable that, if all these states are broke, that there will be legalized sports betting in more states than Nevada and we will ultimately participate in that,” said Silver, to Bloomberg News.
Technology is playing a major factor in this slow push towards legalized gambling. In the State of New Jersey, residents may gamble on traditional casino games online. This gaming is governed by GPS and has been legal since 2013.
From a sports perspective, it is obvious that Daily Fantasy Sports (DFS) is having a major impact on the marketplace. The recent rounds of funding by FanDuel and DraftKings, who have distinguished themselves as the major players in the space, with increasing revenue reported during the past several quarters is showing that on some level Americans want to put money on sports.
Renowned gambling expert Joe Peta believes that DFS is causing Silver to throw out, as he described, “test balloons” for gambling in the NBA.
“As in almost everything it is follow the money,” Peta told SportTechie. “With the ability to raise revenue…before the end of the decade we will see wide sports betting and the NBA is a key lynchpin for that.”
Peta told SportTechie about a conversation regarding Adam Silver that he has not shared publicly before:
“I got a call from someone, who had a personal relationship with Adam Silver, who at the time was the heir apparent to Commissioner Stern, around a year and a half ago. I was told Adam Silver had read my book and wanted to speak to me, and I said ‘sure absolutely, any time,’ and this person said he [Adam Silver] wants to speak to you because has drawn up a plan to capitalize on sports betting the moment it is legalized in the United States, and they are using the English Premier League as their model, where there are actually kiosks at games and EPL basically takes a toll, some fraction of a penny, for each dollar that is bet on each game.”
Peta continued:
“This person said to me, Adam Silver is driving this and he is very enthusiastic about this. I never met Mr. Silver and I never heard anything more but I watched it with keen interest to then watch the NBA line-up with the NFL and Major League Baseball in testifying against the legalization of sports betting in New Jersey, which seemed to run counter to what I was told about Adam Silver. But when I heard him come out last week, I knew that my source was dead on, because that was a well-placed test-balloon, sort of making the first public intentions known of where the NBA wants sports betting to go in the United States.”
Peta believes that the 1991 law that currently outlaws sports gambling is also on last legs, figuratively speaking. He described the law as being held up by a three legged stool.
“If the NBA is one-third of that stool, and if they completely switch course and support it [sports gambling] well that is going to be a monumental shift in the law makers attitudes.”
Silver in his comments also stated that State economics is a major factor in the shackles of sports gambling being overthrown.
“One of the reasons this is inevitable is that you have 50 states with deficits and this is a very easy way to generate revenue, on a part of the economy that is already in existence but is untaxed,” Peta explained. “I think certainly the decline in attendance and gaming revenue in Atlantic City, helped to drive New Jersey to challenge this rule in the first place.”
Peta stated that one of the reasons the NBA is starting to waver on sports gambling is due to the age of its new commissioner.
“Adam Silver and anyone under the age of the 50 has grown up with sports betting being part of their lives…because it is more of an analytics exercise rather than a forbidden activity,” Peta theorized. “I think that is why it’s going to be changing, and why a test balloon came out now because Silver is of a different generation than David Stern was.”
In multiple conversations with Major League Baseball owners Peta has been told that they believe gambling will “help to stem major league baseball’s increasing demographic problem.” Peta agrees that the reason gambling is so popular with individuals under 40 is that they enjoy analytics, data, and fantasy coupled with short attention spans makes putting money on a game more enticing.
Entrepreneurs in the field are anxiously awaiting the end of the sports gambling freeze. Scott and Ryan Wagner, Co-Founders of Who Ya Got, Inc, just launched a BETA version of their website which allows users to pick games. Their entrepreneurial nature may be coming at the exact right time:
“We agree with Silver’s assessment that engagement in games, especially irrelevant games and those between less intriguing teams, will be enhanced by fans who have a stake in the game.”
For now, they keep their website within the legal parameters.
“We have created a legal vehicle where fans can have that stake without gambling. At WhoYaGot.com users can pick games against the point spread, be ranked based on their success, and compete against friends and the public to prove their knowledge. It’s all the fun and none of the risk.”
The technologists currently sit on the sideline waiting for a European model of sports gambling to take hold here in the United States. Technology will help ease the public into a gambling model no matter whether it is in a local casino or online. For now, we wait for the first bet to be made in Atlantic City or a New Jersey track, and to see what Silver’s next balloon will include.