The Local Bookie Isn’t Going Anywhere if Sports Betting Expands in U.S.By Brett Smiley | Published: March 6, 2018 at 10:30 am
In this installment, we turn to the current U.S. sports betting landscape. As you are probably aware, full-fledged sports betting is illegal everywhere but Nevada while a black market proliferates online and through, yes, local bookies. Americans place and estimated $150 to $400 billion (quite a range) in sports wagers annually through these unregulated, unlicensed operators, whose revenue is tax-free.
And that last point means that they can offer better lines and more competitive pricing. Of course, many sports bettors will prefer to bet with legal, licensed operators if they come to fruition with the possible repeal of the federal ban on sports betting (the known as PASPA) via the Supreme Court Sports Betting Case, Murphy v NCAA, in which a decision is expected in April or May. But many will not. Which brings us back to John, who opines on what’s happening in various statehouses across the U.S. where sports betting legislation is on the table, if it hasn’t already passed.
The Sports Leagues’ Desired “Integrity Fee” Might Be the Best Thing To Happen to Local Bookies and Offshore Operators, Thus: The Local Bookie Isn’t Going Anywhere if Sports Betting Expands in U.S.
SportsHandle (SH): Do you feel threatened by the possible legalization of sports book wagering in New Jersey, with more states to follow?
John: Threatened? Are you kidding? It’s a source of great optimism. As a sports wagering service provider, I am extremely cautious of the perception that we are mob-related and illegal criminals. Legal sports wagering takes me one step closer to mainstream America. My customers and their associates already consider me to be a normal guy with an interest in sports. I help people enjoy sports. I am not in the league of even a small-time pot dealer. Those people have a stigma.
SH: So, are you saying that it will be good for your business?
John: Hell yes. If New Jersey has to book bets at 12/10 or 13/10, everyone will want to flock to me since I provide traditional odds at 11/10. Please understand, no player can win over the long-term at 13/10 sports betting odds. They’ll get killed and quit betting altogether. In the end, I would say 90% of the public simply gives up after sustaining long-term losses. In New Jersey, it will just happen faster—unless, they come to me!
SH: If they want to come to you, how convenient is that?
John: Do you think it is convenient in Nevada? You have to drive to a casino, park your car and get out and make a bet. Most people say that takes at least thirty minutes. If you are lucky enough to win, you have to do the same thing in reverse. We get customers who are tired of having to go to a casino to cash their winning tickets. They come to me primarily for convenience. By the way, parking at a New Jersey casino or race track will be a lot longer walk and will take more time.
SH: But sports book wagering has gone mobile and now people can bet on their phones. Many states are looking to implement mobile apps or platforms.
John: So do we, and I am still much easier. In New Jersey, the customers will have to open an account, which is cumbersome, and then fund it periodically. There is no paperwork in my business and no banking records. We operate on credit. Theoretically, our customers can sit back and watch their winnings grow without ever having to fund an account.
SH: Do you think any of these states are doing it right — and by that I mean not imposing such a high tax rate that the sportsbooks can offer competitive lines — such that some of your clients might have interest in setting up an account with a state-licensed sportsbook?
John: I’d say very few states are doing it right. I’d say West Virginia, they seem like they’re being realistic. What I don’t understand is, Nevada’s been in business for what, 50 years? Why wouldn’t a state come out there or at least contact Nevada and look at a blueprint that’s worked? Why are they trying to recreate the wheel? I think the problem in some of the states is that the politicians don’t understand that this isn’t a slot machine and a guy will put in a dollar and you’ll get 20 cents of it over time. If this was legal for the Super Bowl, how much would Pennsylvania and New Jersey have lost on that game?!
SH: That would have been a nightmare.
John: They’d be so far behind the eight ball it would take them six months until they dug out and made any revenue. And I don’t think they understand that as a sportsbook you’re only holding about 5%. And with this ‘integrity tax’ or whatever the leagues are trying to call it, I mean that’s just absurd. Without sports betting, there wouldn’t be a third of the viewership watching these games.
SH: Any final thoughts?
John: The likelihood of all the states coming together and establishing one set of rules, payout odds and policies is just not imaginable. The biggest opportunity that I see immediately on the horizon is that the leagues commanding a piece of the pie will adversely affect these states and possibly Nevada, and cause the casinos in Nevada to move from the 11/10 odds relationship. I think we are going to pick up a lot of business. I see the need to have a larger host staff!
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