The DIY of sports betting for casinos
As readers well know, the U.S. gaming industry has hit the ground running in the legal and regulated sports betting space, the initial chapter of which will be well-chronicled in next month’s inaugural issue of Sports Betting Management.
As with all things legal and regulated, one can run into walls as easily as into open fields of opportunity. In this case, the casino industry has already been well-served by its national advocate, the American Gaming Association, and by the institutional knowledge accumulated in existing sports betting jurisdictions, particularly Nevada and New Jersey in the U.S. and Europe overseas.
Of course, there are potential snags such as tax rates that threaten to hamper the competitiveness of legal operators and decisions that could detract from the quality of the existing product, such as the District of Columbia Council’s approval of a sports betting bill that gave a mobile gaming monopoly to lottery operator Intralot. There’s a healthy debate in the industry whether such arrangements give operators the flexibility they’ll need to keep pace with rapidly changing betting and betting-related technologies. But, in defense of DC, the lottery did build a two-year review provision into the bill that could allow for privatization if performance and results warrant it (or not).
Then there is the prospect of federal regulation, which reared its head last month with a bill introduced by Sen. Charles Schumer (D-NY) and Sen. Orrin Hatch (R-UT) that would have the U.S. Justice Department set minimum standards for states to offer sports betting. Ever since the Black Sox scandal of 1919 in which gamblers paid ballplayers to throw a World Series, elected officials have lived in mortal fear of green-lighting anything that soils organized sports beyond all redemption, sports being a primary source of escape from increasingly harsh political and economic realities. Hence the now-retired Hatch’s statement that as soon as the Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA) last May, he began working to “ensure we were doing everything possible to protect the integrity of sports from corruption.”
Industry actors have anticipated all that, of course, tangible proof being the announcement one-month prior of the establishment of the Sports Wagering Integrity Monitoring Association (SWIMA), a not-for-profit group funded by the industry, staffed with representatives from legal and regulated sports betting jurisdictions and tasked with ensuring a safe and secure betting environment for consumers. This includes partnering with state and tribal gaming regulators, federal, state and tribal law enforcement, and other various stakeholders todetect and discourage fraud, as well as other illegal or unethical activity related to betting on sporting events.
SWIMA’s chief integrity officer is George Rover, former assistant attorney general and deputy director of the New Jersey Division of Gaming Enforcement when online gaming was successfully rolled out in the Garden State. At G2E last fall, Rover signaled that just such an endeavor was likely.
“I think you will see states form something collaboratively for some form of technical monitoring,” he said. “You have some organizations over in Europe and from everything I’ve read is very effective. It enables operators and regulators to share information very quickly to determine if there’s any unusual or suspicious behavior; I think you’ll see something like that in the U.S. at some point. Once that comes to fruition I think it would put to rest the idea that stats are not able to handle sharing information between themselves.”
The creation of SWIMA gave some teeth to the industry’s reaction to the Schumer-Hatch bill, showing once again that the best defense is a good offense.
Sports betting in the U.S. is interesting on so many levels, not least because it gives states a chance to apply lessons learned in the service of progress and success. For instance, in a webinar presented by Eilers & Krejcik and GeoComply last month, former Nevada state senator and Gaming Control chair Mark Lipparelli made the case for technical consistency, the dearth of which has hampered brick-and-mortar casinos for years. “It serves the industry well if there could be a degree of consistency from state to state,” he said. “There will always be differences, but to the extent that depart dramatically, whether it’s things like mobile wagering, bet restrictions, or registration requirements… every one of those introduces a new software version, and when software frameworks have to be changed multiple times with lots of revisions, you introduce the risk of vulnerability. When people ask if we should be concerned about people getting on to these sites and impacting what’s happening with software, every time you make software more complex you introduce the possibility of risk.”