Inside Gaming: How would legalizing U.S. sports betting change Nevada's industry?
Legalizing sports betting in the U.S. would be bad news for local street-corner bookies and the Internet’s unregulated off-shore gambling market.
But could the idea hurt the Nevada sports betting industry?
If legal sports books pop up in California Indian casinos, for example, would the Strip’s high-end gambling facilities dry up? This question doesn’t need an answer today. We’re a long way from legal sports betting moving beyond Nevada.
Expanding the activity, however, has gained renewed interest in the past few months.
The commissioners of three of the four major professional sports leagues — led by the National Basketball Association’s Adam Silver — said legalizing sports betting eventually will need to be addressed by their governing bodies.
The Washington-based American Gaming Association (AGA) wants its membership to choose the best course to take on subject. ESPN The Magazine devoted much of its Feb. 16 issue to sports betting, including lengthy pieces on Silver and Las Vegas resident and noted sports gambler Bill Walters.
A Minnesota legislator this month introduced a bill to legalize sports gambling in the state.
For now, the Professional and Amateur Sports Protection Act, known as PASPA, makes this discussion somewhat moot.
PASPA, which was enacted in 1992 by Congress, confines legal sports wagering to Nevada, Delaware, Oregon and Montana. Unlike Nevada and its high-tech, multimillion-dollar sports books, the other states offer just small-stakes betting through parlay cards or a lottery.
Short of PASPA’s repeal by Congress, the U.S. Supreme Court will have the final say on sports wagering in any other states.
New Jersey has been fighting since 2012 to legalize sports wagering in Atlantic City casinos and at racetracks as a way to prop up the state’s sagging gaming industry. A federal judge blocked New Jersey’s effort in November, although supporters hope an appellate court will take up the issue this year.
Minnesota’s sports betting backers want to challenge PASPA, saying the state has casinos and racetracks and is using gambling revenue to build a new stadium for the NFL’s Minnesota Vikings.
The discussions center around money. The states want to tax the activity to fill budget gaps. The athletic leagues, meanwhile, could demand a cut.
Proponents long have said bringing sports gambling out of the shadows ensures game integrity and protects customers.
All this is well and good, but nothing changes unless PASPA goes away.
In a November New York Times op-ed piece, Silver said sports gambling is thriving as an underground industry, despite PASPA. He said states should be allowed to legalize and regulate wagering on professional sports.
Boyd Gaming Corporation CEO Keith Smith said that idea has some merit, but he doesn’t believe sports gambling should expand into all gaming markets. Boyd operates casinos in eight states, including nine in Las Vegas and Atlantic City’s Borgata Hotel Casino and Spa.
“We make money in our sports books,” Smith said. “We provide good amenities, and they are profitable. I’m just not sure sports betting belongs in every state.”
Jay Kornegay, who manages the 30,000-square-foot Super Book at the Westgate Las Vegas Resort & Casino, said other jurisdictions “would have a tough time emulating Las Vegas.” He doubts an Iowa riverboat casino sports book could match Las Vegas during Super Bowl weekend or March Madness.
“There are still plenty of more reasons to come here,” he said.
Most of Nevada’s major gaming companies — MGM Resorts International, Wynn Resorts, Limited, Caesars Entertainment Corporation, Station Casinos, Inc. — own and operate sports books. Single casino companies hand the sports and race wagering over to a manager to reduce risk.
CG Technology manages the sports books for nine casinos in Las Vegas, including The Venetian, M Resort and Hard Rock. William Hill US has nearly two dozen locations, including the D Las Vegas, SLS Las Vegas and Silver Sevens.
Both companies would jump at opportunities outside Nevada.
The amount of money wagered on sports by Nevada casino customers has increased in each of the past five years. In 2014, gamblers wagered $3.9 billion on sports, an increase of 7.7 percent over 2013.
Analysts credit technology for the growth. Many sports books offer mobile applications for smartphones and tablet computers and in-game wagering, which allows customers to bet on games in progress.
National Hockey League Commissioner Gary Bettman said this month that sports wagering doesn’t concern him. The NHL is “not as big a factor in betting as football and basketball.”
He’s correct. Hockey wagering is so small, the Nevada State Gaming Control Board doesn’t separate out the figures. As a comparison, Nevada gamblers in November placed $400.7 million in bets on college and professional football — a single-month record for the sport.
Bettman said sports betting would have to be a consideration for NHL owners if a franchise lands in Las Vegas, including whether wagering lines could be set on games involving the home team.
Up until 2001, sports books could not take bets on football or basketball games involving teams from University of Nevada, Las Vegas and the University of Nevada, Reno.
Kornegay summed up the feelings of the sports book industry if a similar ban were implemented by the NHL.
“It would be odd to accept wagers on our collegiate teams and not the local professional franchise,” Kornegay said. “I think it would send the wrong message to the rest of the country. Hopefully, it won’t be a factor in Las Vegas getting a team.”