Imagine thinking about a business model, in this case the possibility of nationwide sports betting, for almost 40 years, and then finally it happens!
That’s what has just occurred for Michael “Roxy” Roxborough, universally regarded as a pivotal and instrumental figure in the development of sports betting.
Roxborough sat down recently with Sports Handle to offer some advice for individual states and those companies soon to establish legal sports wagering in non-Nevada states. Based on Roxborough’s reputation as the founder and operator of Las Vegas Sports Consultants, the U.S.’s leading oddsmaking concern from 1982-99, sports wagering stakeholders would be well advised to pay attention to what “Roxy” has to say.
A Good First Impression
According to Roxborough, 67, the new national sports betting industry would be better served to begin operations in New Jersey rather than a smaller state, with limited population. Opening in a populous state and being operated by an experienced company, such as William Hill, is more likely to create a good first impression that the industry will benefit from. He cites New York’s Off-Track Betting (OTB) shops, known for largely patronage workers, poor service and dingy locations as a template from which horse racing never really recovered.
If sports betting companies make mistakes and those mistakes get repeated elsewhere, the results could be disastrous. That first impression will be crucial, Roxborough warns.
What Happens in Vegas (Nevada)
Roxborough also advises that the so-called Nevada sports betting model may only really be viable in Nevada, because the Nevada casinos subsidize the sportsbooks through big advertising budgets and by providing a steady stream of customers to the counter. This may not be the case elsewhere.
“Sports betting in Nevada is tied to casinos and has been subsidized by casinos,” he said. “This may work in New Jersey, too, but it may not elsewhere.”
He emphasizes that legislators are lacking in knowledge when it comes to drafting sports betting laws, so they will look at what exists. He cautions that if casinos run the show, they can use sports betting to drive foot traffic, but “if private businesses are running it they must have mobile apps to achieve any level of success,” and that changes the picture for hiring and resource allocation.
“It’s complicated,” he adds.
Achieving success will come down to the level of taxation and being able to generate enough handle, he says.
Dinner last night. L-R: Ned, Art Manteris, Vic Salerno, me, David Purdum, Roxy Roxborough, Anthony Curtis, Chuck Esposito and Hank Goldberg. pic.twitter.com/O833Uf1Nel
— Chris Andrews (@andrewssports) February 3, 2018
On the “Integrity Fee”
Regarding the much-discussed “integrity fee” put forth by the leagues, which may have evolved somewhat into a royalty, Roxborough believes, contrary to most, that paying 0.25 percent to leagues would be a sensible move for bookmakers. “If you don’t pay anything you don’t get anything. There are a whole lot of things a bookmaker could get for that quarter of one percent.”
Roxborough says a league taking a cut of handle would now have a greater incentive to ensure accurate and timely data used for in-game wagering or for a statistic-based bet, such as total yards by a running back. “They might even be willing to indemnify a partner bookmaker if bad data caused an improper payout,” he said.
“A few Super Bowls ago there was a squabble about how many sacks took place. It’s a popular bet. The total was officially changed a few days after the game. So this could be important,” Roxborough said.
Roxborough advises bookmakers to give the leagues some money so they can sit at the table and negotiate with them. One of his ideas is to further stagger game starting times to allow the maximum amount of wagering. “If you insist on not paying them anything, I just don’t see the point of it. You might pay them a sliding scale, lets say up to 1 percent on a 10-team parlay, for example.”
On the Integrity of Wagering, and the Games Themselves
According to Roxborough, so-called “integrity issues” have worked themselves out over time. If sports betting has survived this issue for 50 years as a largely illegal pastime, this shouldn’t be a real issue if it becomes legal. The integrity of the games for the four major U.S. sports is far less an issue than for almost any business you can think of.
He remains skeptical of those who say they made hundred of thousands of dollars on the recent claims that referees impacted some NBA games. “I’m not saying it didn’t happen, only the contention that some people made a lot of money off of it.”
Slicing the Pie
“The NFL always has an idea of what they’re going to do if they don’t win the next round, so don’t think they didn’t have a back-up plan if PAPSA (the recently overturned law prohibiting most sports betting outside Nevada) was tossed out. Their plan, whatever it is, will eventually move forward.”
“Obviously, there are lots of people who want to get something out of sports betting,” he continued. “The leagues and the NCAA are going to want to get something. The problem gaming people are going to want to throw their hat in the ring for something. Local communities where the bet originates, such as those in Pennsylvania, will want something. And, don’t forget the players’ associations. What if they don’t like the deal the leagues negotiate? What if they don’t want their personal names on the betting board?”
Shopping Around in New Markets, and Smart Wagers
Roxborough believes that new sports bettors will be somewhat impaired by the inability to “shop lines” because, most likely, they may have only one number to choose from. He says in Nevada line variations still exist, but not to the extent they used to. If only one bookmaker is allowed to operate in a new market, options won’t be available.
He said, “A player in a new market will have to decide how long he wants to stay in action. If you just bet parlays, you won’t be in action very long. The house take is just too high. Parlays are always appealing because you get a lot more back than you put up. But, those kind of bets will eventually grind you down.”
“Straight bets are just about the best kind of bet you can make and you’ll get a lot of enjoyment for three and a half hours,” he said.
Roxborough in Retirement
Roxborough, who booked bets while in college at American University, quit betting sports when he got into the linemaking business, regarding it as a conflict of interest. Since his retirement, he says he only dabbles in small wagers on things like political elections, English soccer and baseball futures.
The oddsmaking veteran, always known for his natty attire, including designer ties, recalls his sale of Las Vegas Sport Consultants in 1999. “I had a three year non-compete clause and extended it to five. I knew when I left the business that would be it.” Now, the avid horseracing devotee rotates his time between homes in Thailand and Las Vegas with frequent sojourns to places like Santa Anita, Del Mar, Belmont Park and Royal Ascot.
Roxborough currently holds no financial position in any bookmaking or oddsmaking company, his significant place in the history of sports betting and bookmaking quite secure. However, his knowledge and perspective remain a much sought after commodity in Las Vegas and elsewhere.