Sports betting has seen tremendous growth due to technological innovations and an increased cultural acceptance for activities once considered sinful. Yet it still faces its share of obstacles.
In 2018, the Supreme Court overturned PASPA and allowed states to craft their own sports gambling laws. This marked an exciting yet complex journey for this industry.
Expansion of Legalized Sports Betting
After an initially difficult start, legal sports betting has quickly become an integral part of American life, even among those who don’t engage with wagers directly. Since the Supreme Court’s historic decision to strike down PASPA in May 2018, more than US$180.2 billion has been bet on sports, according to research from American Gaming Association (AGA).
However, many still dislike what they see; Americans aged 50+ are particularly vocal in opposing legalized betting as an antisocial force in society and in sports they love – many do so due to fear it could lead to problem gambling.
State governments have responded to these worries by revising their sports betting regulations. New York, for instance, has banned advertising of sports betting on college campuses while Maryland and Connecticut limit promotional material that appeals to underage players. Massachusetts proposes banning deals where betting marketers pay commission to sports teams, on grounds such arrangements could foster problem gambling.
States that permit sports betting have also begun using their revenues to support specific causes, including problem gambling prevention programs. While some states have set up trust funds, others deposit all or part of it into the general fund; and there are plans afoot to require sports leagues implement “integrity fees,” which would pay professional sports teams in return for improved anti-corruption policing in betting markets.
Responsible Gambling Measures
The new generation of gambling consumers prefer placing multiple bets at once and the industry has responded by providing various betting options. But as these new markets proliferate, so too do responsibility measures need to be implemented more aggressively.
The key component is “duty of care”, or omsorgsplikt in Swedish, which requires gambling companies to actively alert players when their gambling patterns indicate risky betting and offer them assistance and resources – an area which should be reinforced significantly in future regulations.
As part of its responsible gambling measures, using external educational programs is another key measure. While each licensed group offers different content for these programmes, many do not have concrete solutions themselves which poses a serious future threat.
Sports betting in the US is being determined by multiple stakeholders, from state regulators and sports leagues, to casinos and casinos themselves. All parties involved aim at increasing taxable revenue; hence their partnerships with gaming entities such as MGM as NBA’s first official gambling partner or FanDuel for NHL partnering. Even individual teams such as Broncos with Betfred or Golden Knights with FanDuel.
International Cooperation
With the proliferation of betting markets worldwide, sports leagues and teams have increasingly turned their properties over to gambling companies for monetisation – as evidenced by partnerships like those displayed below.
Esports in particular is experiencing unprecedented growth. In certain markets, it has overtaken traditional betting verticals like rugby and cricket betting; online casinos also adore it as an attraction. This trend will likely only continue as the industry expands into emerging markets.
Legalized sports betting has spurred an increase in cooperation between state regulators and law enforcement officials in states without many law enforcement resources, especially New Jersey and Nevada where such resources are lacking. New Jersey and Nevada even formed a task force dedicated to combatting sports betting-related money laundering and fraud.
State and tribal gaming authorities have proven effective regulators of sports betting, eliminating the need for further federal oversight. Instead, Congress and the administration should concentrate on curbing illegal betting markets that lack transparency and safeguards of legal markets regulated by authorities.
Sports betting’s future is being determined by many factors, including legalized sports gambling being legalized in additional states, the growth of esports and globalization affecting its sector. But as betting markets evolve further there remain concerns regarding problem gambling and corruption within them.
Legalization of Online Sports Betting
Not long ago, few could have imagined that betting would become so pervasive. Yet it’s a testament to the free market’s effectiveness that this once illegal activity now takes place within regulated markets and the legalization of sports gambling was brought about through a landmark Supreme Court ruling that invalidated PASPA – a federal law restricting full-fledged sports gambling to Nevada and certain other states.
Since this decision was rendered, several state legislatures have passed laws legalizing sports betting in their jurisdictions and implemented tax rates accordingly, with some states offering reduced rates to ensure legal sportsbooks compete effectively against offshore products while discouraging people from turning to black markets for betting activities.
MGM Resorts International and DraftKings have both taken large strides into sports betting in preparation for a regulated U.S. market, acquiring Caesars Entertainment through MGR Resorts International’s acquisition and providing access to ESPN digital platforms through a partnership deal respectively. But these moves haven’t come without controversy – such as when D.C. City Council bypassed an RFP process in favor of Intralot (an operator known to have close connections with city officials as well as an uncertain relationship with both NBA and MLB regarding “official vs unofficial league data), according to Sports Handle (read more here).
State policy may dictate higher interest rates to boost revenue performance; however, some states are choosing lower rates to ensure legal products can compete against illegal ones at more competitive pricing. Legal sports betting could experience exponential growth by 2022 as states continue to establish and expand their sports betting markets.
