Another Super Bowl, another year to ponder the costs of America’s arbitrary sports betting laws and what they cost the brick-and-mortar casino industry. This time around, however, there seems to be some sustainable momentum that could one day bring things to something resembling a logical resolution.
As most everyone knows, the state of New Jersey has been aggressively pushing for legal sports betting for many months now. As it relates to gaming at the federal level, the government has been more focused on money laundering, via the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) than sports betting, but the two issues dovetailed in late December when FinCEN wrote the American Gaming Association (AGA) about the rise in prevalence of third-party bets being placed at windows in Las Vegas.
In the letter, the Treasury stated that such third-party bets are “facilitating criminal activity and posing a money laundering risk to the U.S. financial system.” It was an opportunity for the AGA to point out the relative sizes of the illegal and legal sports betting markets, with the implication that the time to narrow the gap has come, one that the Association didn’t miss.
“Current law banning sports betting is clearly failing,” said Geoff Freeman, president and CEO of the AGA, in his written response to the Treasury last month. “The AGA is closely examining the current state of sports betting, the laws that govern it and the best way forward for the gaming industry.”
Freeman estimated that the illegal betting market for the Super Bowl is around $3.8 billion, or nearly 40 times larger than the $100 million in Super Bowl bets that Nevada is expected to take in this year. In the 12 months ended last November, the state of Nevada took in $3.875 billion in legal bets. Estimates for the size of the illegal sports betting market in the U.S. are all over the place. On the high end, the illegal sports betting market could be as much as 100 times larger than the legal one, and that’s using the high-end estimate of $380 billion that was produced by the National Gambling Impact Study Commission over 15 years ago. Current high-end estimates put the number closer to $300 billion.
In any case, the illegal market dwarfs the legal market, and not just in the U.S. In a report issued last fall, the International Center for Sport Security reported that that $140 billion is laundered annually through sport betting, that 80 percent of global sports betting is illegally transacted, and therefore invisible to regulators and investigators. The report concluded that, “the clear responsibility is with countries and governments to disrupt and correct the vulnerability of sport betting to transnational organized crime.”
The way we’ve done that historically is to legalize, regulate and offer a better product than what’s available on the street. As New Jersey and, now, Indiana, promote legislation that will, at the very least, put them first in line if and when the federal government revisits is antiquated and impractical approach to the laws governing sports betting in America, it would be helpful if more states followed suit. Legalized sports betting in the U.S. is most likely still a long-term play, but you wouldn’t be in this business if you weren’t patient.
MARK YOUR CALENDARS
Here at BNP Media Gaming Group we are producing two events in the coming months that I would like to encourage you to take a look at. The popular Southern Gaming Summit/Bingo World show returns to Biloxi this May 5-7, and the conference program will lead off with a keynote speech by Keith Smith, president and CEO of Boyd Gaming. The program is set and covers the most up-to-date topics in the industry, including sports betting, by the way. You can see the full program and a list of confirmed speakers to date at www.sgsummit.com.
In July, we will present Casino Marketing & Technology at The Rio in Las Vegas; July 14-16, to be exact. This event, which many of you have known as Casino Marketing, will offer all the marketing education attendees have come to expect since its inception in 2004, plus a new track of technology sessions that will address how marketers can leverage the many technologies that promote marketing goals. The event will once again follow Raving’s Host Development Conference, which will take place July 13-14. The Romero Awards and a very special Lifetime Achievement Award luncheon will also be on the program. Full details will be released later this month, so I encourage you to check us out at www.casinomarketingconf.com.