The new book on American sports betting
Joe Asher has been CEO of William Hill US since 2012. In that time, he has overseen the growth of the company’s Nevada operations to more than 100 full service & kiosk locations, making it the state’s sports betting leader. As calls to update America’s sports betting laws have intensified, Asher’s perspective on the topic has been among the most valued in the industry. Casino Journal Executive Editor Charles Anderer spoke with Asher on the current sports betting market and future growth scenarios.
What’s driving the momentum surrounding legalization of sports betting in the U.S.?
Asher: It’s a combination of things. It starts with Senator Ray Lesniak and Governor Chris Christie in New Jersey. (NBA Commissioner) Adam Silver has really put a lot of focus on the issue as well. There are broader factors such as ESPN, the surging popularity of sports and sports betting, along with the Internet. Those are the main things driving the increased focus.
Adam Silver wrote, “I believe that sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated.” That was a pretty effective statement from our industry’s standpoint.
Asher: If you listen to his comments and read his op-ed piece in the New York Times, he did not just wake up on Tuesday morning and decide to write that. He clearly reflected an understanding of the issue and had given substantial thought and attention to it. He has obviously spent a fair amount of time in Europe, where sports betting is widespread, particularly in the UK. The NBA has played games in London. He and the league have put a lot of thought into their position on this.
Technology has also played a role, hasn’t it, particularly with younger people?
Asher: In a broader sense, I think we’re seeing the effects of generational change, not unlike what you’ve seen with social issues such as gay marriage. Different generations think differently. Technology is implicated in a number of ways, starting with the spread of information. Results are available in real-time now; you don’t have to wait for the morning paper. Adam Silver talks about being at a game in Brooklyn where the guy in front of him was betting on the game during the game on his mobile device. Clearly, technology is playing a role.
Have you put a number on the size of a legalized U.S. sports betting market?
Asher: No, but it’s definitely a massive market. The amount that is bet in the U.S. on sports is in the hundreds of billions of dollars, at least. People are betting with their bookies, they’re betting on off shore websites, they’re doing daily fantasy wagering. They’re betting on sports today.
What’s at stake for brick-and-mortar operators here?
Asher: It’s a significant opportunity if brick-and-mortar operators end up with the licenses. Especially in the northeast, where the sports betting culture is unique. It’s hard to quantify, but sports betting will be a larger percentage of gaming revenue elsewhere in the country than it is currently in Nevada.
The size of sports books varies considerably in Nevada; you have some huge operations on The Strip and smaller operations once you get off of it. There is no one-size-fits-all blueprint there, even on The Strip. You go into SLS, and their sports book is built into a burger restaurant. It’s smaller than most of the ones you see on The Strip and yet it does really well. People will be able to build out sportsbooks in a way that makes sense within the context of their property.
New Jersey alone would be a $10 billion handle market, in my view, which is three times the size of the Nevada market, by virtue of the population and the intense sports betting culture that you see there. A sportsbook in the Wynn casino in Boston or the MGM property in National Harbor would do massive numbers.
Sports betting would seem to be a logical way to bring younger customers in as well.
Asher: No doubt about it. Younger people are betting on sports already today, so the ability to offer sports betting legally in casinos would be attractive to a younger demographic. One of the big things we need to think about is that sports betting is a widespread activity right now that needs to be brought out of the shadows and into the sunlight.
Speaking of the popularity of sports betting, fantasy sports sites have boomed in recent years and there is a wagering component to many of them. What does the regulated casino industry need to understand about that market?
Asher: It’s attracting a young demographic, particularly when we’re talking about daily fantasy. And I think the jury is still very much out on daily fantasy sites in terms of their legality. To the extent that a state legalizes daily fantasy, is that consistent with PASPA (the Professional and Amateur Sports Protection Act of 1992)? I think there are a lot of legal questions that haven’t been addressed yet by the courts, which is why casino operators are taking a wait-and-see approach on the daily fantasy.
There’s also a question about the business model and the advertising costs. I was on a panel with one of the daily fantasy executives recently and he said the only company making money off of daily fantasy right now is ESPN because of all the advertising revenue.
At the end of the day, however, the major sports leagues’ embrace of daily fantasy is an embrace of sports betting, because it is gambling, and it is sports betting. To their credit, when the NBA decided to go into daily fantasy, the Commissioner also became vocal on his views of sports betting in the U.S. today.
Can you talk about the impact of mobile technology on your Nevada sports book business?
Asher: It is a rapidly growing part of the business. In Nevada, you have to be physically present in the state to wager and your location is geo-located every time you bet. It’s especially popular with the in-play wagering piece of the business. We still do a large percentage of that in the sportsbooks, but it’s certainly convenient to bet on a mobile device. They still have to go into a physical location to open their account and people show up in person to fund and withdraw as well. Importantly, mobile wagering has been additive; it has not in any way cannibalized the existing retail business, which is growing as well, albeit at a slower rate than the mobile business.
How would you sum up the paths to sports betting legalization in the U.S.?
Asher: There are two avenues, in my mind. One is through the courts. There is the ongoing litigation related to the New Jersey sports betting case in the Third Circuit. There will be litigation in other circuits as well, challenging the constitutionality of PASPA and, ultimately, you’d expect the Supreme Court to take up the issue. The other is the congressional route, which is what Commissioner Silver has suggested, where PASPA is repealed and replaced with a federal bill that establishes standards for an individual state to uphold if it decides to offer sports betting. The standards could relate to issues such as geo-location, age verification, and protections against insider trading.
But, ultimately, it would be up to the states to decide whether they offer sports betting, the way it is with all other forms of gambling. That’s the way it should be in our Republic, and that’s what makes sports betting in the U.S. such an unusual issue.
Joe Asher is chief executive officer of William Hill US. Asher has an extensive background in the gaming industry and a lifelong passion for the race and sports betting business. He can be reached at www.williamhill.us.