(By Philip Trampe) New York’s 2019 budget has a $4.4 billion deficit with a huge cut to health care, according to Governor Andrew M. Cuomo. At the same time, according to various surveys, 46-49% of Americans claimed to place at least one sports bet a year making the US black market for sport betting according to a number of estimates to be worth around $100-200 billion. Some New Yorkers even bet on political events and managed to win. Why not push this money out of the shady underground, make it taxable and use it among other things to close budget loopholes in the regulated states and protect players risking their money on illegal offshore bookies with no benefits to the state they live in?
Look at New Jersey. Since Governor Phil Murphy signed A 4111 on June 11, legal bettors in September have more than doubled handle month over month to hit over $6.1 million dollars a day. Sportsbooks held a huge $24 million in September working out at an average $800,000 in revenue generated per day, with online and mobile betting contributing $104 million in handle, or 56% overall. $24 million in hold equates to 13%, comfortably above long-term averages. The month-over-month breakdown reveals the explosive growth in legalised sports betting in New Jersey. Whilst legalised sports betting remains in its infancy in the state, the evidence already suggests it is generating a boom for bookmakers and, ultimately, tax collectors like never before.
Sports Betting Will Need Strong Measures
Legalizing sports betting would of course require strong measures to protect legal businesses, players’ rights and the integrity of the games. A legalised, regulated gambling industry is the best way to protect the consumer. In the UK, bookmakers are obliged to dedicate 30% of their advertising material to responsible gambling, with all adverts including ‘when the fun stops, stop’ motto. Moreover, all staff working in UK betting shops are trained to spot the signs of problem gambling and they are obliged to refuse bets from someone who appears to be at risk, whilst providing them with information on how to get support from one of the UK’s many problem gambling charities like GambleAware, all funded by the betting industry. Basically, that’s the same thing some bartenders did to me a couple of times on West Side of Midtown Manhattan when they served me water instead of another beer saying that it was “enough for me”.
Contrary to popular belief, no legal, licensed and regulated bookmaker ever has any interest in match fixing. Licensed and regulated bookmakers are obliged to cooperate with the gambling authorities whenever there is suspected match fixing. It is the bookmakers who sound the alarm in the first instance when they notice irregular betting patterns, which not only are unprofitable but also deter customers from believing that the sports events they are betting on are transparent and fair.
Betting Can Generate Huge Revenues and Rating
A regulated betting industry which is allowed to advertise can generate huge revenues and ratings for broadcasters of sports that are popular with bettors. Barclay’s Sandler estimated that sports betting ads could contribute as much as 4% to Google’s 2019 revenue. The betting industry spends around £200 million per year in the UK on advertising on TV, money which trickles down into the sports themselves via sponsorship deals, prize money and investment in players and teams.
This creates a compelling entertainment proposition and competitive activity in order for the sport to appeal to fans who may consider it a viable betting medium. Much of this commercial investment in top-class sports also trickles down to the grassroots level, with many betting companies choosing to directly invest in and support local and amateur sports as part of their commitment. However, the law should protect legal players and forbid unfair competition. Since you can’t really ban all illegal bookies by IP (people will start using VPNs), you can forbid media companies from advertising and sending them traffic.
Sports betting is entertainment and should be fun. The aim with regulation of the industry in the USA is to put illegal companies out of business, make money taxable and protect users who would rather bet $100 legally knowing that they can withdraw in the event of a win. And, of course, taxes are paid on each and every bet.
Eighteen more states will sanction and regulate sports betting in 2019, including New York. Some say that the national legalisation of sports in the US appears to be impossible. Utah will never legalise it and other states may be much slower. However, Utah quickly legalized same sex marriage in 2013 when that outcome seemed unlikely. As such, I remain optimistic about their decision-making. The future for a regulated industry and protected bettors in the USA looks bright.
Philip Trampe is an executive at US-bookies.com.