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 βchange everythingβ 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 morningβs βSkin In The Game: Sports Gamblingβs Emergence In The U.S.β 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 βif/thenβ 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 β 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 β 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 panelistβs mouth when asked which states are doing sports betting right were βNewβ and βJersey.β 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.
βMississippi is only retail,β Monteverde pointed out. βClearly that limits dramatically the adoption. To see this business growing, you need to see the mobile regulated.β
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. βIf itβs going to go β¦ retail only,β Levin said, βitβs going to take a long time to convert those customers over.β
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. βImagine you couldnβt set up an eCommerce site unless you had a physical store,β the moderator chimed in.
Otterman, as was the case at various points throughout the hour, played the role of semi-contrarian: βI think the magic is going to be a combination of online and retail,β she said.
Minimizing the βfrictionβ
Following on Levinβs point about it being nearly impossible to squeeze out the black market if mobile betting isnβt legal in more states, there was a fair bit of talk about points of βfrictionβ found in the early days of regulated betting. βThe more friction that regulators put in the system,β Ma said, βthe much smaller chance that this is ever going to really replace the black market.β
Levin noted that payment processing is a huge point of friction right now, but he believes that will get better over time.
Then thereβs taxation, which varies wildly from state to state.
βStates like Pennsylvania where the tax rate is so high, itβs really hard to compete against the illegal market,β Otterman opined. βWe want to compete on a level playing field because we want to keep consumers safe.β
Everybodyβs two favorite words: integrity fees
We hope you had βintegrity feesβ 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 whoβd like to see the term βintegrity feeβ fade from the discussion permanently is that at the panel it was frequently accompanied by the word βsilly.β
βIt is silly, the tax,β Monteverdi insisted. But then he clarified: βItβs not silly that the leagues should have integrity programs.β
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.
βWeβre already seeing north of 50% of handle on NBA games in-play,β 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 Maβs 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 itβs money or entertainment that fuels most bettors. William Hill has come under fire for limiting or even banning βsharpsβ whoβve had success, putting Otterman on the defensive somewhat as she directed the conversation toward the companyβs emphasis on recreational bettors.
Otterman disputed the assertion that William Hill doesnβt welcome winning bettors. She said, essentially, that the rumors arenβt true, saying of the publicized claims, βWe were picked on a little bit because weβre the largest bookmaker in Nevada.β
But moderator Ma was persistent in gently and respectfully pushing back. βItβs too hard to get money down if youβre winning,β he said. βI had hope that legalization would change that, but Iβm not sure if it will.β
For what itβs worth, Levin said that FanDuel regularly surveys new customers and is receiving positive news about conversions of both casual and serious bettors. βThe percentage of people who have never bet before is growing,β he said, βand the percentage of people who have bet with an offshore book is growing.β
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.
βIt worked out as we had actually hoped, because it created this big story and buzz, we got a ton of PR,β Levin said. βAnd then [Alabama] lost β¦ and it became another story again.β
Ma countered that paying out βseems ridiculous,β saying treating losing bets as winners gives FanDuelβs business βzero credibility.β But Levin insisted it was worth it and that they did a careful analysis of what they stood to lose β and he admitted they decided on the payout plan at the time they did in part because the book hadnβt seen a heavy rush of futures volume on Alabama yet.
Off-the-beaten-path betting
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 βworst-case scenarios.β
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.
βItβs not a huge business opportunity,β Levin said. βItβs more about doing something different, getting the PR value, and making people aware.β