By James F. Peltz, Hugo Martin and Lance Pugmire
Los Angeles Times
Suddenly, all bets are on regarding the future of American sports gambling. A surge in betting caused by the Supreme Court’s lifting of a federal ban on sports wagering is expected to trigger new gaming sources and burnish existing sports books in Las Vegas casinos — but also spawn a battle among horse-racing tracks, Indian casinos and card clubs as they try to grab a slice of the added action.
The high court’s move overall could unleash a torrent of gambling nationwide that hitherto was illegal and totaled at least $150 billion a year, according to the American Gaming Association, a casino trade group that estimates 97 percent of current U.S. sports betting is illegal.
And the amount illegally bet on sports might be as high as $400 billion a year, noted Brian McGill, a gaming analyst with the research firm Telsey Advisory Group.
“The process will now begin for each state to pass a law to allow for sports gaming,” he said in a note to clients.
California Assemblyman Adam Gray, a Merced Democrat, said Monday he would pursue a constitutional amendment that, if approved by voters, would allow sports betting in California.
“It is time to bring this multibillion-dollar industry out of the shadows,” Gray said in a statement.
Gray and other state legislators have tried four other times since 2012 to allow sports betting in California, but none of the bills reached the governor’s desk. Approval would raise a list of questions, including: What should the tax rate be on wagering? Where would that tax revenue go? Can the betting be done on the internet as well as at physical locations? What types of bets would be allowed and on what sports?
Meantime, DraftKings Inc., the leading player in the popular online daily fantasy sports business with nearly 10 million customers, announced it would jump into the sports-betting market in light of the ruling.
“DraftKings will be able to harness our proven technology to provide our customers with innovative sports betting products,” DraftKings Chief Executive Jason Robins said in a statement, adding that his firm also remained “fully committed” to continuing its fantasy sports business as well.
Robins said DraftKings would start working with states that allow sports betting and that “the addition of online and mobile sports betting holds the potential to generate billions of dollars annually for cash-strapped state governments.”
FanDuel Inc., DraftKings’ main rival in online fantasy sports, likewise signaled it would enter the sports-wagering field, saying “we will bring innovation to the sports betting space” and “create a sports betting product that fans will love.”
Gaming stocks jumped as investors saw the ruling as fueling additional revenues for the major casinos’ sports books. The gainers included MGM Resorts International, Caesars Entertainment Corp. and Boyd Gaming Corp.
“We’re embracing it and looking at it as an opportunity, not a threat,” said Jay Kornegay, director of the sports book at the Westgate Las Vegas Resort & Casino.
“We’ve been preparing for this,” Kornegay said. “With the expansion, we might reach a demographic we’ve never seen before, with a lot of people introduced to sports betting for the first time.”
MGM Resorts also applauded the ruling, saying it gives the states “the opportunity to protect consumers and benefit the public by regulating and taxing sports betting.”
Nevada was exempt from the sports-betting ban that was lifted by the Supreme Court. The Nevada Gaming Control Board, which regulates the state’s industry, said it supported the court’s ruling and “looks forward to acting as a resource and sharing our model” with states that choose to legalize sports betting. The American Gaming Association likewise praised the ruling as “a victory for the millions of Americans who seek to bet on sports in a safe and regulated manner.”
“Today’s ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent and responsible market for sports betting,” the group said.
The Pechanga band of Indians, which in March opened a $285 million expansion of its resort and casino in Temecula, Calif., said they consider sports betting a “potential amenity” to the gambling already offered in its casino. Pechanga Tribal Chairman Mark Macarro said in a statement that “we look forward to engaging in a conversation with fellow tribal leaders, policymakers and industry stakeholders to see if there is a path forward for sports betting in California.”
However, Kate Lowenhar-Fisher, chair of the gaming practice group at law firm Dickinson Wright, said California would likely be a “tricky jurisdiction” for legalized sports betting, largely due to the compacts negotiated between the state and the Indian casinos. Tribes with compacts that do not specifically mention sports betting may decide to renegotiate those agreements, and that could take years, she said.
“There was gridlock over internet poker, so I shake my head, wondering whether the state gaming authorities and tribal gaming authorities can actually agree on something,” she said. “I wouldn’t necessarily bet on it.”
Although California and some other states already allow gambling on horse racing, the tracks want part of the new, larger wave of sports betting as well.
“We would pursue (a sports book) at every one of our racetracks,” said Tim Ritvo, chief operating officer of the Stronach Group, which owns Santa Anita Park in Arcadia, Calif., and other tracks. Noting his tracks’ experience with betting,
“This is a new form of gaming that we should be entitled to,” Ritvo said. “What we’d want is a level playing field.”
The professional athletes on which the legal bets would be made also are paying close attention to ensure they aren’t left out of any financial bonanza in wagering. The players unions for Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League last month said in a joint statement that “the athletes must also have a seat at the table to ensure that players’ rights and the integrity of our games are protected.”
Major League Baseball and others also made a point Monday of saying they want to ensure the integrity of all sports involved in legal wagering. Asked if the spread of legal sports betting places games more at risk to being fixed in any way, Westgate’s Kornegay replied: “Absolutely not. It’s a better deterrent and more protected being open and regulated than being underground.”
But some are troubled that as legal sports betting widens, so does the prospect of gambling addiction among Americans.
“Torn on the recent court ruling allowing gambling,” NASCAR driver Brad Keselowski said on Twitter. “Should be great for our sport but I’ve also seen gambling ruin lives.
“If you choose to gamble on me or anyone else please be responsible and if you need help, get help,” he said.