In the post-PASPA world, the U.S. betting market is opening up, state by state – and if the European market is any kind of yardstick, there is a huge learning curve to be navigated by operators and customers alike.
In comparison to the standing start Las Vegas sportsbooks had until perhaps ten years ago, and the pretty gradual progress made since, the European market has been evolving through technological advances over the last twenty years or more – and in an online environment with almost completely frictionless competition. The skill required to buy an “off the shelf” package that will get you up and running more or less instantly, with Corporate Social Responsibility and CRM taken care of by the supplier, is almost zero; all you need to worry about is the top of the sales funnel. You want to open up a sportsbook that specializes in nothing but, say, Albanian handball? Sure, go right ahead. As long as the turnover you generate is enough to pay for your white label setup, you’re all good.
By comparison, in the U.S. there has been almost no evolution until very recently. The legal sports betting experience has been virtually exclusive to the casinos of Nevada and New Jersey until the recent advent of limited online offers in those and other states. One suspects there’s a lot of catching up to do.
The days of rapacious margins, especially on outrights (aka futures), are most likely limited, and the idea of looking at a sportsbook’s board during football season to see just the money line, spread line and over/under is also sure to be consigned to history – along with slots that take actual coins and a fair Blackjack game on the Strip.
It seems inevitable that a huge array of other side or prop bets, much like the U.S. has traditionally offered only on the Super Bowl, will spring up on every game in every sport as betting firms seek new ways to appeal to the army of new casual bettors and emulate what’s been successful in Europe. One would imagine that this will take a little time, as it will be an iterative process in each state – nobody wants to have to offer more bets, with more exposure to sharp players, than they need to – but in a competitive dogfight, with the only other differentiator being expensive marketing campaigns, the variety of offers might be the best way to appeal more widely.
However, along with that army of sidebets will come an army of algorithm- and research-based sharp bettors. Given that the bookie has to get every price right, while the value hunter only needs to find a handful of wrong prices, there’ll be a good number of winning players – and this is even more inevitable, given that the margins will be trimmed. The reaction when the news gets out that players are being limited – if indeed that’s legal state by state – is hard to predict, but it doesn’t seem likely that this will be perceived as “fair play” by the general public.
The concept of barring winning players will also inevitably lead to informed players deploying multiple accounts, and operators deploying security measures to put a stop to such activity. Who knows what legal interpretation will be deployed by the authorities by way of countermeasures.
There’s also the question of inside information. When there are limited markets available for each event, things like injury news can make some significant difference to the teams’ chance of winning. Traditionally if, say, a starting quarterback is listed as doubtful to start, U.S. bookies would react by taking that game off the board. However, if you’re offering 200 markets per game, one of them might be, for example, ATS – Anytime Touchdown Scorer, a bet on of player X to score at any point – which in Europe is a very popular bet. If a bettor happens to know that the starting running back for team Y has a slight hamstring strain before the bookies do, the ATS price on the backup running back will be way, way too high. As an operator, what are you going to do? Decide against offering the market, and risk looking a lot less fun to bettors? Bar the sharp players who hit the bet, and risk disapproval when the story gets out? Limit the stake size, and watch helplessly as dozens of new accounts hit the same bet for max stakes, all opened by friends of the sharp bettor? It’s a potential minefield.
Once we add in corporate social responsibility, those concerns will inevitably multiply. The CSR experience is changing the face of the industry across Europe. In the current U.S. environment of largely grey market betting, problem gambling is a difficult subject to deal with – if you have the resources to demand illegal bookies take care of their customers, you’d have already closed them down – but in a world where betting becomes legal, operators must be aware of their responsibilities, and when they’re generating huge amounts of cash, cutting off apparently valuable customers who show signs of distress may not be top of the list.
Anti-money laundering will force its way up the agenda too, although it may well be that the fear of it in gambling circles is significantly higher than the probability of it happening to any great degree. It’s nonetheless hard to see a gambling industry where this isn’t a high-profile concern – in the press, at least.
Add in the press coverage that all the above challenges will generate, and it would be a foolish U.S. online betting operator that didn’t keep a fairly close eye on the European experience to try to shrink the learning curve and stay ahead of competitors. Claims that the U.S. market is fundamentally different are all too audible, but there’s an argument that this is simply because of a lack of opportunity to develop the U.S. market, and if 20 years progress is squashed, concertina style, into the first couple of years of state by state regulation of betting in the U.S., then 20 years’ worth of challenges will land all at once too.
