After Spreading Like Wildfire, U.S. Sports Betting Grinding Down

July 12, 2022
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Last month’s heartbreaking defeat in North Carolina coming on the heels of a similar failure in May in Minnesota could be the new normal for the campaign to expand sports betting across the United States.

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Last month’s heartbreaking defeat in North Carolina coming on the heels of a similar failure in May in Minnesota could be the new normal for the campaign to expand sports betting across the United States.

It would be difficult to find a business success story comparable to the growth of the legalized sports-betting industry from one to 30 states in just four years and two months since the U.S. Supreme Court lifted a federal ban.

But the easy part might be over, according to Brandt Iden, head of government affairs for Sportradar US.

“This is the first time we’ve seen since PASPA (the Professional and Amateur Sports Protection Act of 1992 which banned expanded sports wagering) was overturned really, the electoral turmoil that’s out there from a political standpoint,” Iden said during a panel discussion on Sunday (July 10) in Boston at the summer meeting of the National Council of Legislators from Gaming States (NCLGS).

This is an election year which has included redistricting in many state legislatures and it is harder to educate new lawmakers on complex issues like sports betting, said Iden, who served as a Republican state representative in Michigan from 2015 to 2020.

“Gaming is a very difficult vote to take,” he said.

Last month, proponents fell just one vote shy of passing a bill to allow online sports betting in North Carolina, which was one of the industry’s top legislative targets for 2022.

Minnesota and North Carolina rejected sports betting at least in part because the issue became politicized, according to Iden.

“And we haven’t seen that before,” he said.

Joseph Solosky, managing director of sports betting for NASCAR, said many states which have not yet legalized sports betting “are in what’s called NASCAR Country.”

“North Carolina, Georgia, Alabama, Texas — these are all states that I think the handle will only increase for NASCAR,” Solosky said.

They also are deeply conservative states politically, making sports betting a particularly tough issue for gaming lobbyists.

Luisa Woods, vice president of gaming for Delaware North, said it is important for leagues and sports-betting companies to collaborate in making sports betting more popular.

“As a partner, we all have the opportunity to craft sports-betting experiences that are tailored to your fan base, to your customers in a way to engage with them,” Woods said.

The next state on the sports-betting agenda is Massachusetts where the legislature faces a July 31 deadline to pass a bill which could import a UK model of advertising restrictions.

Known as a “whistle-to-whistle” ban, a pending proposal in Massachusetts would bar any advertising by sportsbooks during televised games.

The Senate version of the Massachusetts bill includes the “whistle-to-whistle” provision but the House bill does not.

If the Senate bill becomes law, Massachusetts would become the first state to approve such a restriction.

Iden and Dave Friedman, executive vice president of the Boston Red Sox of Major League Baseball, agreed that such a ban might violate freedom of speech protections in the First Amendment of the U.S. Constitution.

“Advertising is a big issue, especially for us,” Friedman said.

The “whistle-to-whistle” ban, he said, is “unprecedented; doesn’t make any sense to us … and I think that’s actually unconstitutional.”

Ontario is the only other jurisdiction in North America contemplating legislation similar to Massachusetts, according to Iden.

“However, I do think that this conversation will continue to permeate around the country in these states that haven’t passed sports-betting laws until such time as the industry steps up and does something to sort of curtail the advertising,” Iden said.

“The industry needs to be the leader in this space so the regulators and the politicians don’t do it for us.”

Friedman said the partnership between the leagues and the U.S. sports-betting industry has improved considerably since the leagues abandoned the concept of an integrity fee on sports-betting handle.

An integrity fee “is really unlike anything any other industry that I’m familiar with has,” Friedman said.

“I think the things that we’re asking for now (such as payments from sportsbooks for league data) are easier to explain.”

Rich McKay, the president and CEO of the Atlanta Falcons in the National Football League, told a Georgia Senate Committee in March 2020 that team employees actively search their stadium for spectators collecting real-time data illegally.

But Friedman said illegal data scouts have not been a problem at Fenway Park, home of the Red Sox.

“I’m not actually aware of a situation where we caught someone doing that, but if we did, we would have the right to throw them out, and then we might phone Major League Baseball to see what else could be done,” he said.

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