The day has finally come! By a 7-2 vote, the justices of the United States Supreme Court have ruled that PASPA is unconstitutional. This opens the door for widespread legalization of sports betting. This was a decision that had been sitting on the books for a while, but May 14, 2018 will go down as a landmark day in the industry and in the world of sports as a whole.
The immediate impact is not up for debate. States that have already made progress towards legislation are now free to move forward and we will see New Jersey open up its sportsbooks in very short order. Pennsylvania, West Virginia, and Delaware, which already allows parlay wagering at its race tracks, are ready to move quickly. Many other states will follow suit as they want to grab a piece of the pie. The opposition from the sports leagues has waned, as they have changed their tune from not wanting it at all to making sure that they get a cut in any way possible.
Overall, this is a great thing. It creates freedom and flexibility for those who just want to bet on a game at the local casino or at the bar. It will introduce more public money into the betting markets, which could create opportunity for astute bettors. Most importantly, it doesn’t have to stay hidden. People don’t have to pretend that it’s not there. Those that were concerned about the safety of playing offshore no longer have to worry about that element of the industry. Regulated environments will now exist in the flesh, so to speak. The uncertainty of sending your money to an offshore sportsbook can be a thing of the past if you want it to be.
Bettors already established in the offshore markets can keep doing what they’ve been doing. Some detractors of today’s ruling are pointing out things like the tax rates and higher vig that will be experienced with brick-and-mortar betting, but this doesn’t change a ton for the offshores or those that play there. In some respects, a more regulated environment in the US, like there is in Europe, could be a stepping stone to more responsibility from the offshore operators. There are some watchdog websites out there that will call out sportsbooks for not paying customers or for other disputes, but there is very little oversight in that market and it can be a gamble in and of itself to play with some of the operators offshore. Many are very responsible and have longstanding reputations, but this may further limit the number of disputes and problems for those that do opt to play with these offshore sportsbooks.
As mentioned in one of my previous articles before today’s historic ruling, now we have to see what happens on a state level. There are a few states ready to move and others that will be positioning themselves to move. What will bettors pay for vig in these states? Will we see an industry standard of -115? Vegas still operates with the standard -110, but doesn’t have to worry about an integrity fee and has a tax structure that is fair for both sides. How many other states will agree to those provisions? How hard will the leagues dig in on the integrity fee? That money has to come from somewhere, as the hold percentages for sportsbooks in Vegas tend to sit in the 5-6 percent range. With slices of the pie going to the states and the leagues, what will we see from state to state with different tax rates or different integrity fees?
Today is a huge day because legalization is now a reality. This was the first step in a long, arduous process to see how each state adopts legislation and see how quickly things are able to move. For the consumer, additional options and opportunities will always be a good thing and, let’s be honest, this hurdle should have been cleared a long time ago. The stats and figures are always brought up about monies bet legally and illegally for sporting events and other things.
Ultimately, today is a win because people are allowed to do what they want with their money. The grey areas of the offshore market are no longer a worry for those who were concerned about that. As my one buddy said, “I like not having to explain to my bank why I’m trying to deposit a $1500 check from Singapore.” Many of us understand that the edges will be smaller in a regulated environment, but are we willing to try 5-10 cents of vig and 1-2% of edge for the safety and security of betting the way it’s done in Vegas? Some will and some won’t. The offshore market won’t go away. It will undergo changes to adapt and try to stay in the game with as much of a market share as possible.
Many thought this day would never come. Many thought this day would come, but not this soon. Many thought this day made too much sense not to come. No matter where you stand on the issue, it will be very interesting to see what happens in the days, weeks, and months following this ruling.
