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Legalized Sports Betting and the NFL

Legalized Sports Betting and the NFL

Do you know how much was wagered on sports last year?

You can’t, because almost all was bet illegally.

 

My estimates are higher than you might think.

It was approximately 225 billion.

That’s more than the combined revenues of Starbucks, Microsoft, &Goldman Sachs.

 

 

 

How will its’ legalization affect the NFL?

Here’s what we know.

1)      TV/video audiences will increase. 

Viewers will have more of a vested interest.

Younger crowds seeking “instant gratification”will now find the game more compelling

because they’ll be ableto wager on 100’s of“live action” bets during a game.

 

2)     The outcomes of contested replays will be like watching a photo finish in a horse race.

There will be lots of controversy. 

 

3)The NFL will reciprocally endorse Sportsbooks and casinos.

 

The bottom line:

Increased viewership = increased advertising revenue = increased franchise value.

 

Here’s what we don’t know.

1)      How much will the NFL be able to withdraw from the sportsbooks?

Legalization was a 10th amendment issue allowing states to have individual

jurisdictional rights. These negotiations could be autonomous, but Congress still has the right

to implement a national regulatory network. It probably will. 

 

The league will want:

  1. a) A percentage of revenue
  2. b) “Sports Betting Rights”

(The NFL owns the product that sports books are using to generate their own revenue.)

  1. c) “Integrity Fees”

(To keep it simple, let’s just call this compensation to promote honesty.)

None of the above are paid by entities in Nevada.

All of the above will probably be rolled into one fee or percentage of revenue.

 

2)     Will the NFL make more from their proposed percentage of revenue or from advertising?

New Jersey is the second recent state to legalize sports wagering.

They’re expected to have approximately 200 million in gaming revenue per year.

If taxed at 1%, we’re only talking about 2 million dollars, or a little less than the average NFL salary.

Multiply the above by 20 states (assumed over the next 3 years),

and the figure becomes 40 million, or only 1.25 million per team.

 

Conversely, advertising revenue should increase dramatically.

The only reason that most viewers are watching a televised MAC conference game

on a Tuesday evening is because they bet on the game.

 

More bettors = more viewers = more advertising dollars.

Your definitive answer is advertising.

 

 

 

Will it lead to concerns about players or coaches being influenced by the betting line?

In July of 2008, NBA referee Tim Donaghy, was sentenced to 15 months in prison for making bets on games

and conspiring with so called “low level” mob associates to effectively alter outcomes. 

I’m not a conspiracy theorist, and believe this to be the exception,

and do not expect the principals to be influenced by the line.

 

There are five major reasons why it has become increasingly difficult to affect the outcomes of games.

1)      Most major sports leagues are aware of the potential negative ramifications and have revised

guidelines for behavior of referees/umpires.

2)     Social media makes it pretty tough to get away with anything.

3)     Athletes don’t want to risk losing their benevolent salaries.

4)     Refs don’t want to go to jail.

5)     Most importantly, the SCOTUS ruling now makes wagering more “main stream”

diminishing the possible involvement of those taking bets illegally. 

 

 

 

 

Will it make games more competitive?

From a gambler’s perspective the contests may be more exciting, but unless rules are

 changed to accommodate “live” betting, the game will not be more competitive.

 

 

 

 

 

Do you think legalized betting will increase fan interest, and how will it affect you?

As discussed, gambling action will increase ratings.

It could pull some viewers from the “Red Zone”.

Color commentators will be able to openly discuss point spreads.

 

Although TV ratings have declined (but not as much as reported) ad costs have still increased.

Gamblers will watch anything if they have a vested interest.

 

How will it affect you?

As of today (8-9-18), you can legally bet in four states: Nevada, New Jersey, Mississippi and Delaware.

Others to quickly follow should be: Connecticut, Rhode Island, New York, Michigan and Pennsylvania.

Eventually sports wagering will go from a Monopoly (Nevada), to an

Oligopoly(right now), to a “free market” (mostly nationwide legalization).  

Nobody wants their constituents going next door to spend taxpayer’s money

in a neighboring state.

I expect that at least 32 will opt for legalization.

 

Uncertainty doesn’t make life worth living, quite, but it does make striving and

Gambling worth attempting.

-Walter Kirn

 

We’ve already legalized it.

Let’s not politicize it.

Let’s responsibly enjoy it.

If you win lots, you’ll be taxed for it.

 

For the 99% that don’t do their homework….

Deduct it.

 

John Rothschild

#1 New Release/Best Seller

Simon and Schuster’s

“Football Betting Made Easy”

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