Sports have entertained the masses for centuries. Going all the way back to the early Olympics in Greece or the Gladiator Games in Rome, there have been spectacles to fuel the enjoyment of the masses. Modern sports are no different. We have millions watching now, instead of 20-100 thousand. Since the beginning, the human ability to also wager on any event has accompanied sports for those centuries.
Betting Basics
What is gambling? Well, the according to Dictionary.com the definition is:
” the activity or practice of playing at a game of chance for money or other stakes.”
The basic sports bet is to bet on the outcome of a game – I will put $10 on Cavs to beat the Celtics in Game 3.
That’s simple straight betting. However, most people get some sort of odds to even the playing field. Las Vegas, where gambling is currently legal already, puts lines on each game. Vegas will say that the Cavs will win by 6.5 points. So, if you bet with the odds, then to win the bet, you will have to see the Cavs win by 7 points to win your bet.
The other main bet is the “Money Line” bet where you put a certain dollar amount to win a set amount much like the point spread odds listed above. For example, the Cavs may be put down $100 to win $80 back. You can go against the money line to get more than you put in, but experienced gamblers may “hedge” their other bets to play the favorite in a money line favorite bet.
There are a multitude of bets available at betting parlors in Vegas called Sports Books. In those places, you can literally bet on all types of outcomes or “prop bets” which is short for proposition bets.
Examples of Prop Bets:
- Over/Under bets – The Sports Book will put a number of points both teams will score. You can bet on the score being higher or lower than that number
- First Half Total/Second Half Total – You can also bet just one half of a game, and you can do it at halftime after the game starts. One of my buddy’s friends actually predicts these on Twitter for several sports – https://twitter.com/MrHalftimeBets
- Individual Performances – You can bet on an individual player and how they will perform in a game – Points, Assists, Touchdowns, etc. depending on the sport
- Super Bowl Type Bets – For the Super Bowl in the NFL, Vegas Sports Books have tons of bets like the color of Gatorade dumped on the Coach, which position will score the 1st TD, who wins the coin flip, etc.
Parlays: A Parlay is a bet that will combine results from either multiple games in one sport, across sports or even different results in the same game. In order to win, you have to get all the results correct. Parlays are more like the lottery, so you can win more money than you put in sometimes.
Updated Legislation
Prior to Monday, May 14th, gambling is basically considered illegal except at specified places like Casinos for table games on site, Horse Racing at Off Track Betting Parlors and Racetracks (although there are a ton of apps now that you can use), and the state of Nevada – Las Vegas. On Monday, the Supreme Court ruled that betting on sports is not a federal matter by striking the 1992 law that outlawed commercial sports gambling called the Professional and Amateur Sports Act. The Supreme Court will leave the decision on whether it is allowed to the states. Here is the NY Times article on the decision:
www.nytimes.com/2018/05/14/us/politics/supreme-court-sports-betting-new-jersey.html
Nevada was given an exemption in 1992, but now with New Jersey being the state moving for this overturn, there are 5 other states with similar bills in their legislatures to allow sports gambling – Connecticut, New York, Mississippi, New York, and West Virginia. I’ve heard estimates of upwards of 32 states will enact bills allowing sports gambling in the next 5 years.
What Does This Mean?
So, I’ve been playing Fantasy Sports since the mid-1990s. Ever since I started playing Fantasy Football, my view of the sport did change fundamentally. As a sports fan, my regional bias for the Bears in football gave way to a broader knowledge of the sport and players on all teams. I knew who the 4th WR of the Atlanta Falcons was in 1995. In those early days of fantasy football, the information was limited, so you had to do a lot of pre-season research. Now, in the internet era, Fantasy Sports has taken over. I can access real time injury and starting information in really any sport. I can play Fantasy sports on really any major sport, and thanks to sites like FanDuel or DraftKings, I can play Fantasy Sports every night of the week, if I want. I believe the same effect will happen with this type of legislation for gambling. I think that “fans” will be less loyal to their local team and have “action” on games all over the country.
Now, I know guys, one of my best buddies, Steve, who I am going to start a gaming/fantasy podcast with (stay tuned), has an app where he can bet on games now. However, he is a real gambler. I don’t think the regular gambler will be that much affected by this decision. In fact, the regular gambler who is active now, may still place their bets in the methods they use now. More on this later, but there may be a cost difference in going with the state sanctioned method versus the “black market” or off shore approach.
I think the decision opens up sports gambling to the average fan. The fan who did not gamble except for the Super Bowl. It is unclear how this will all work out yet, but there is talk that the major sports will integrate the gambling experience in their consumption. For example, the NBA may have a ticker at the bottom of the screen with the game odds. I’ve heard sites like ESPN will have a way to bet on the game in real time on your phone. So, why wouldn’t an average fan put $10 on their home team from their phone like they do with a quick Amazon purchase.
As this various states enact how this will take place, I believe there will be very sophisticated apps created to access the various sports, much like FanDuel and DraftKings. In fact, I believe those sites will have 2 portals or options for their members – one for Daily Fantasy and one for sports gambling. Ironically, about 18 months ago, FanDuel and DraftKings was fighting the legislative battle to stay open in several states, as the various legislatures wrapped their hands around whether Daily Fantasy was gambling. Well, this decision eliminates that issue. As far as the US Government is concerned, the states can decide if they want to allow sports gambling.
Bigger Issues
The legalization of gambling does have a lot of bigger effects.
Technology – Clearly, technology will expand in this area. There are already apps that allow you to bet real time on games, like my buddy, Steve, uses. However, the competition for being the main portal to deliver betting services will give rise to several start ups and larger entities like the sports networks – ESPN, Fox Sports, etc. will create portals on their sites to capture revenue. I like this idea. I mean when I was doing Fantasy Football in the mid-90s, I literally had to call in my lineup to the Commish every week. Now, I can change my lineup 1-5 minutes before kickoff from my phone. The on demand world we live in will allow new industry and investment in this sports gambling area.
Addiction Counter – The main opponent to the legislation will most likely be groups that see gambling as a vice. Now, gambling is a vice. Many a person has blown their life savings, lost homes, etc. to gambling. To me, this decision does not change things. If you wanted to gamble before, then you would have. Does legalizing marijuana increase usage or more importantly addiction? I don’t think so. However, the readiness of having gambling apps and betting houses will definitely open the door to greater issues. So, I expect that in every state where sports gambling is enacted there will be a portion of the funds going to Gamblers Anonymous or other addiction treatment programs. I want to be clear that gambling is a vice and can be addictive, however I do not think the legislation itself will lead to a significant increase in addiction. Yes, the usage will be more prevalent and easier, but any addiction expert would probably say that access is only one aspect of addiction.
States Role – Every state will decide how they will be involved in the process. However, I’m pretty sure states like Illinois, who are broke, will find a way to get a cut of very bet done in this method. States may have a transaction charge, percentage or something to collect additional revenue. For this reason, I’m not sure regular gamblers will choose the state sanctioned method. If the cost is higher and the state mandates the charges, then from an efficiency standpoint, it may not make sense.
Sports League Participation – Some leagues may, like the states, want a piece of the action. I’ve heard terms like “integrity fee” where a league like the NBA will take up to 1% of the bet and funnel that money to their team owners in some fashion. Again, the effect of this will work 2 ways, the same bets held now will cost more or pay less to the winners. On the other side, if a league like the NBA is all in on gambling, then the interface with their fan base will be influenced on broadcasts, ticker tapes, and even betting portals. So, all of this will be hashed out in the coming months.
Players Participation – The bigger issue will be if college sports will be included in the process. One of the reasons for the 1992 Act was to keep the “integrity” of the game. You cannot have players throwing games or point shaving (trying to control the line of a game). In addition, as a coach or organization or university, you cannot have players actually gambling on the game for the same reason. So, the wall between bettor and competitor has to be well established or the “fixing” of games will be very likely. Think about how boxing has become a joke for the most part, guys like Don King have been accused of rigging boxing matches or setting up fights to just control the betting and purse. We can’t see that in football and basketball or the games will be meaningless.
Vegas/Casino Viability – Will the legislation change the viability of Vegas or local casinos? If I can bet on my phone, then what is my incentive to go to the Casino or take that annual guys trip to Vegas during March Madness? Well, I think Vegas will be fine. There are some smart people out there that must have saw all this coming. Vegas has made itself a total family destination with shopping, shows, and other gaming, so it should be good. Local casinos will likely push state legislatures to not all the electronic apps or ask for a cut of the proceeds to stay viable. I mean people go to the Casino for blackjack and craps more than the sports book. However, if a guy like me, who never goes to casinos can bet online on my phone versus going in person to the Casino, I’d be all for the app. Horse tracks have been struggling all over the country, so they may opt to get sports betting on site, too. I’m curious to see how this plays out.
Beyond Sports Impact – We have been talking exclusively about sports betting. However, this type of legislation could open the door to a more global appetite to betting on all different outcomes. I was listening to Mark Cuban talk on Rich Eisen the other day on the topic, and he was talking about how people may be able to bet on TV shows like the Bachelor or his show Shark Tank. So, this decision may make betting a lot more common not just in sports on all aspects of life.
Final Analysis
Here is what I know. The Supreme Court decision on Monday will have a huge impact on our lives going forward. It is to be determined what that will all look like. However, sports betting combined with changes in technology and our on demand world will make betting on sports and potentially other events more prevalent. The change will most likely lead to new industry and jobs around something has been around for centuries. Personally, I’m excited to see what happens, and I’m going to do a podcast about it.
What do you think about all this? Do you bet on sports now? Will you bet more? I want to hear your thoughts.
Wegs