Times have changed, partnerships are vital, and people may be under-projecting the positive effect sports gambling could have on casinos, American Gaming Association President Geoffrey Freeman said in his keynote address at Thursday’s Southern Gaming Summit.
Freeman once again spelled out the potential for legalized sports wagering in the United States to SGS attendees at the Beau Rivage Resort & Casino in Biloxi, Miss.
“Let’s be clear, we’re not the sports betting association. (But) it’s the sexy issue, and the reason for that is that it’s not about playing defense and preventing something bad from happening, which the casino industry often has to do,” Freeman said. “It’s about seizing a massive new opportunity to grow our industry.”
As we know, the U.S. Supreme Court in December heard an appeal to overturn PASPA, the 1992 bill that essentially limited sports betting to Nevada. The court is expected to announce its ruling sometime between May 14 and June 30. Freeman put the odds at 60 percent for a narrow ruling in favor of New Jersey, 30 percent for a complete overturn, and 10 percent for upholding PASPA.
Whatever the court rules, Freeman nonetheless sees sports betting on the horizon for four reasons: gaming has become more accepted, leagues are more supportive, the states are stepping in, and technology has changed.
“In 1992, you were listening to the sound of a dial-up modem,” he said. “Now, there are more than a thousand casinos in 40 states. This industry has gone mainstream… the states that don’t have gaming are now the outliers.”
He noted that the arrival of daily fantasy sports leagues, such as DraftKings and FanDuel, helped open the leagues’ eyes to what can happen.
“The leagues now see the value of people watching a 9-2 baseball game in the middle of August,” he said.
Estimates have indicated that sports gambling could potentially create roughly $8.2 billion in increased U.S. casino revenue, Freeman noted, which is more than what Las Vegas casinos currently garner. But Freeman went on to say that he believes that figure is low.
“I’m not going to tell you that sports betting is the next invention of slots. It isn’t. But I will tell you the market is bigger than projected,” he said. “When sports betting is finally permitted, I guarantee the amount of money sitting on the sidelines (ready) to go into such things as development and innovation will be staggering.
“I think this market will surprise people in terms of its size. It’s a good revenue opportunity, although it won’t be off the charts.”
He cites this demographic profile: the average DFS player earns $75,000 annually, is 32 years old, and has a college degree.
“Sports is a gateway into the casino,” he said. “It provides the opportunity to do something different with these multimillion-dollar venues that dot the U.S. We need to break people into these properties. This product has the opportunity to help do that.”
Sports betting will need good policy, he noted, to drive the illegal market out of business. That means sensible tax rates, a focus on the customer, the protection of game integrity, and oversight to ensure that patrons bet responsibly.
He also cited a need to work with the major sports leagues, rather than being adversarial, briefly citing the 1 percent integrity fee some leagues have mentioned.
“The fastest way to bring this (sports betting) to market is through partnership,” he said. “We’re working with the leagues to see if there’s a deal to be had. I encourage you to look at it through that lens as well.”
