One day before the subject of sports betting got its own panel at the MIT Sloan Sports Analytics Conference in Boston, it was already driving the conversation. NFL COO Maryann Turcke declared at the very first panel of the day on Friday, ostensibly about building data-driven organizations, that sports betting will “change everything” in terms of the way fans consume and engage with sports.
Turcke is almost certainly right. But her tense needs updating. Sports betting is changing the equation already.
Saturday morning’s “Skin In The Game: Sports Gambling’s Emergence In The U.S.” panel was unique in that, for the first time at Sloan, legal sports betting on a widespread level in America was treated as a reality of the moment, not a distant “if/then” proposition.
Sure, there was plenty of focus on the future; moderator Jeff Ma, of MIT blackjack team fame, kicked off the conversation by asking what the experts thought the sports betting industry will look like in 20 years. But for the most part, the panelists — William Hill CMO Sharon Otterman, Perform CCO Andrew Ashenden, ESPN broadcaster Doug Kezirian, FanDuel Group President and COO Kip Levin, and Sportradar U.S. President Matteo Monteverdi — focused on the here and now of a business that has been on a steep trajectory since the U.S. Supreme Court overturned PASPA less than 10 months ago.
Here are some of the notable topics and most compelling insights from the hour-long roundtable:
Get online or get lost
Thee first two words out of every panelist’s mouth when asked which states are doing sports betting right were “New” and “Jersey.” And if you know anything about the early days of regulated sports betting in NJ, you know almost all of the growth is on the online/mobile side.
“Mississippi is only retail,” Monteverde pointed out. “Clearly that limits dramatically the adoption. To see this business growing, you need to see the mobile regulated.”
Levin added that if part of the point of regulating sports wagering is to steer bettors away from the black market, allowing mobile is essential. “If it’s going to go … retail only,” Levin said, “it’s going to take a long time to convert those customers over.”
But even the betting set-up in New Jersey could be more progressive, Ma suggested, as he scoffed at the notion of needing a land-based partner to offer mobile betting. “Imagine you couldn’t set up an eCommerce site unless you had a physical store,” the moderator chimed in.
Otterman, as was the case at various points throughout the hour, played the role of semi-contrarian: “I think the magic is going to be a combination of online and retail,” she said.
Minimizing the ‘friction’
Following on Levin’s point about it being nearly impossible to squeeze out the black market if mobile betting isn’t legal in more states, there was a fair bit of talk about points of “friction” found in the early days of regulated betting. “The more friction that regulators put in the system,” Ma said, “the much smaller chance that this is ever going to really replace the black market.”
Levin noted that payment processing is a huge point of friction right now, but he believes that will get better over time.
Then there’s taxation, which varies wildly from state to state.
“States like Pennsylvania where the tax rate is so high, it’s really hard to compete against the illegal market,” Otterman opined. “We want to compete on a level playing field because we want to keep consumers safe.”
Everybody’s two favorite words: integrity fees
We hope you had “integrity fees” somewhere on your Bingo card coming into the panel. Those dirty words to describe the sports leagues getting a cut of the handle or the revenue popped up a couple of times, and were referenced as one of the sources of the aforementioned friction.
The good news for those of us who’d like to see the term “integrity fee” fade from the discussion permanently is that at the panel it was frequently accompanied by the word “silly.”
“It is silly, the tax,” Monteverdi insisted. But then he clarified: “It’s not silly that the leagues should have integrity programs.”
In-game betting taking off
The ability to make and take wagers during the game, whether on an individual play/point/inning/period or on real-time-updated odds for an end-of-contest bet, is central to industry growth, everyone on the panel agreed.
“We’re already seeing north of 50% of handle on NBA games in-play,” Levin cited regarding FanDuel Sportsbook.
In-game betting is particularly important for baseball, Kezirian said, because it couples nicely with sitting down, having a beer, and watching an inning or two rather than committing to watching an entire three-hour game to sweat your bet.
In addressing Ma’s opening question about what the landscape will look like in 20 years, Ashenden went straight to in-game betting, saying that the European models indicate it will just become more and more prevalent.
For love or money?
The most contentious topic of the panel spun out of a question of whether it’s money or entertainment that fuels most bettors. William Hill has come under fire for limiting or even banning “sharps” who’ve had success, putting Otterman on the defensive somewhat as she directed the conversation toward the company’s emphasis on recreational bettors.
Otterman disputed the assertion that William Hill doesn’t welcome winning bettors. She said, essentially, that the rumors aren’t true, saying of the publicized claims, “We were picked on a little bit because we’re the largest bookmaker in Nevada.”
But moderator Ma was persistent in gently and respectfully pushing back. “It’s too hard to get money down if you’re winning,” he said. “I had hope that legalization would change that, but I’m not sure if it will.”
For what it’s worth, Levin said that FanDuel regularly surveys new customers and is receiving positive news about conversions of both casual and serious bettors. “The percentage of people who have never bet before is growing,” he said, “and the percentage of people who have bet with an offshore book is growing.”
The rising (crimson) tide of PR stunts
FanDuel got its share of attention in December when it paid out futures bets on Alabama to win the NCAA football championship a month before the results were in. Ma asked Levin if the gambit, which FanDuel said at the time would cost it about $400,000, paid off.
“It worked out as we had actually hoped, because it created this big story and buzz, we got a ton of PR,” Levin said. “And then [Alabama] lost … and it became another story again.”
Ma countered that paying out “seems ridiculous,” saying treating losing bets as winners gives FanDuel’s business “zero credibility.” But Levin insisted it was worth it and that they did a careful analysis of what they stood to lose — and he admitted they decided on the payout plan at the time they did in part because the book hadn’t seen a heavy rush of futures volume on Alabama yet.
In the wake of Major League Baseball trying to stifle betting on spring training games, as well as a mildly controversial first year of legal Oscars betting in New Jersey, the idea of less traditional betting markets was examined by the panel.
Kezirian said he understands where MLB is coming from with regard to betting on exhibition games. The host of the upcoming ESPN show Daily Wager emphasized that leagues need to be cautious and do their due diligence, and always explore “worst-case scenarios.”
As for Oscars betting, Levin said FanDuel had no expectation about being able to take bets on the awards before the New Jersey Division of Gaming Enforcement suddenly said they could. And even then, he said, interest from bettors was modest.
“It’s not a huge business opportunity,” Levin said. “It’s more about doing something different, getting the PR value, and making people aware.”