We have reached the dog days of the summer, a period in which sports networks are so desperate to fill programming slots that, for example, ESPN2 aired a spikeball tournament last week in primetime.
Despite the lull in the annual sports calendar, the sports betting industry continues to round the curve at the pace of a high-powered Formula 1 vehicle. Shortly after the Fourth of July, a contingent of the nation’s top state legislators converged in Boston for the National Council of Legislators From Gaming States (NCLGS) summer meeting. Following the three-day event, the vast majority of participants from the conference trekked down to the Meadowlands in northern New Jersey for SBC Summit North America, one of the world’s largest sports betting conferences each year.
The events took place in a volatile period for the gambling industry. With inflation at a four-decade high, bettors are seeing their purchasing power erode while some economists warn of a potential recession in subsequent quarters. Speculation has mounted that the Federal Reserve will lift its benchmark interest rate 0.75 percentage points later this month after the consumer price index rose 9.1% year-over-year in June, one of the largest annual gains since 1981. St. Louis Fed President James Bullard urged the U.S. central bank to increase the year-end rate to a range between 3.75% and 4%, a level that may cool the domestic economy.
“It is important to make sure that you are spending within whatever your limits are, and that limit might come down during a recession,” FanDuel CEO Amy Howe told CNBC’s Contessa Brewer during an SBC panel appearance.
“The way we look at it, even if the market was working, there was going to be some form of consolidation.”
— Sports Handle (@sports_handle) July 13, 2022
Since the U.S. sports betting market is still in early innings, Howe is unsure of how inflation will impact FanDuel’s near-term business outlook. Flutter, FanDuel’s parent company, traded around 7,800 pence early this week, down roughly 33% year-to-date.
“I can safely say we’re in a very good position, being part of the largest global gaming operator in Flutter,” Howe added.
Other hot topics at the conferences
Down to the wire in Massachusetts
Legislative leaders in Massachusetts face a July 31 deadline to hammer out the differences in two sports betting bills before the session formally ends on the final day of the month. Massachusetts state Rep. Jerry Parisella, chair of the state’s Committee on Economic Development and Emerging Technologies, projects that sports betting could bring the state approximately $60 million in annual tax revenue. Parisella serves on a committee that is tasked with negotiating a consensus on the disparate bills.
A House bill, H 3977, calls for a 15% tax on mobile sports betting gross gaming revenue, far below the proposed 35% in Senate bill S 2844. The bill in the House allows for wagering on college athletics, while the Senate version contains a carve-out that prohibits operators from accepting bets on college sports. Parisella does not support a full ban.
“It’s just not feasible. It almost makes it not worth doing sports betting if we exclude a market that’s worth about 40 percent of the bets,” he said.
Sports betting in Massachusetts: Senate President Karen Spilka says she’s hopeful compromise is coming as time runs out https://t.co/yRaezrRhBA
— Alfonso Straffon 🇨🇷🇺🇸🇲🇽 (@astraffon) July 17, 2022
There are other key differences. The Senate bill prohibits the use of credit cards to fund sports betting accounts, a provision the House version allows. One argument for the provision, Parisella contends, is that the monitoring of credit card transactions serves as a tool for fraud detection.
Parisella opened his NCLGS keynote address with an anecdote on a late night he had with several colleagues the previous evening. “They gave me odds of -260 that I would be here on time,” he joked.
Parisella isn’t setting a line on the chances that a sports betting bill will make it to Gov. Charlie Baker’s desk this year. “I don’t know if I can lay the odds, but I really want to make sure it gets done,” Parisella told Sports Handle. “I think we’re missing the ball — I’m confident we can make it happen.”
Focus on responsible gaming
Beyond Howe’s comments on spending within your means, several panels focused on solutions for improving services associated with compulsive gambling and mental health as it relates to sports betting. Sportradar, a leading sports betting data provider, announced the launch of Athlete Wellbeing, an initiative for leagues, teams, and college governing bodies to help mitigate the negative impact of sports wagering on the mental health of athletes. Sportradar Chairman Jeff Yabuki also spoke on the mental health challenges posed by today’s intense business climate in a keynote address moderated by SBC executive Sue Schneider.
New York state Sen.Joseph Addabbo Jr. addressed problem gaming issues at another SBC panel on leadership and player protections. Of the approximately $300 million New York has brought in through tax revenue on sports betting in 2022, roughly $6 million has been earmarked for new addiction programs.
“We knew when we introduced mobile sports betting in New York that it would cause an increase in problem gambling issues, but we were prepared for that eventuality,” Addabbo said. “Although this is a great start, more needs to be done.”
Tech startup encouraged by partnership with Apple TV+
The micro-betting technology startup nVenue has gained strong visibility through a partnership with Apple TV+. Under the partnership, the predictive analytics company has provided live, on-screen probabilities during each at-bat on Friday night MLB broadcasts aired on the streaming network.
Over the first half of the season, nVenue’s proprietary machine-learning platform has yielded some interesting results when it comes to micro-betting. nVenue CEO Kelly Pracht pointed to an at-bat early in the season when Los Angeles Dodgers infielder Max Muncy struck out after getting ahead 3-0 in the count to illustrate the vast capabilities of the artificial intelligence platform.
“The data said that his strikeout probability should have risen at a time when, counterintuitively, it should not have,” Pracht told Sports Handle. After crunching the numbers, nVenue’s historical data sets found that Muncy’s strikeout probability in 3-0 counts remained at a level far above the league average. In order to quantify the data, the platform had to sift through a large number of splits to determine the probability. The technology has the capability to determine the probability rather quickly, she emphasized.
The Odds Are Good for Apple TV+’s MLB Streams, Courtesy of nVenue’s Live Predictive Algorithms https://t.co/VgaYAQQRc9
— Joe Lemire (@LemireJoe) April 16, 2022
Rather than overwhelming viewers by occupying the entire screen with data, Pracht lauded Apple TV for taking a simple approach by placing the odds probabilities in the bottom right hand corner, below the batter.
“We can give so much data that it can fill the screen and nobody wants to see that — it’s about the score,” she said. “They are brilliant at keeping it nice and simple.”
Ticketing procedures on data scouting
A panel at NCLGS in Boston tackled issues related to how legal sports betting has impacted the business of sports. There, Dave Friedman, legal counsel for the Boston Red Sox, fielded a question on how the club plans to treat the dissemination of information transmitted by illegal data scouts inside Fenway Park.
The practice, commonly known as courtsiding, occurs when a spectator sends a game update to an unauthorized sports betting data provider through a code, in an attempt to front-run a sportsbook. The Red Sox, Friedman responded, have the right to eject the data scouts from the ballpark based on club ticketing procedures. At the same time, the franchise may also consult with MLB on how to approach the situation, he added.
Also last week, BetMGM renewed an official sports betting partnership originally struck with MLB in 2018. Four years ago, MGM Resorts made history as the first official sports betting partner of the league.
— MGM Rewards (@MGMRewards) July 16, 2022
Major League Baseball has at least one year remaining on an official sports betting data partnership with Sportradar, industry sources told Sports Handle. MLB also has data partnerships with several other providers, most notably Genius Sports and Stats Perform.
Friedman, a former clerk for ex-Supreme Court Justice John Paul Stevens, recalled a period when then-Chief Justice William Rehnquist ran an NCAA Tournament pool out of his office. Rehnquist died in September 2005, more than a decade before the U.S. high court’s historic PASPA decision on sports betting. Since the repeal of PASPA in May 2018, more than 30 states have legalized sports wagering.