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January 19th, 2019

frank-caractureGaming: Online Betting News

Online Sports Betting:
If Nevada Can’t Stop Its Spread, Then State Will Lead It
By Frank X. Mullen

Get ready for a seismic shift in gaming that has been a long time coming.

For more than 40 years, Nevada was the only state to offer legal casino gambling, including sports betting. The Silver State fought against any plans to expand legal wagering in the U.S., other than at race tracks.

It was a long, losing battle. Atlantic City casinos opened in 1978, eventually followed by legal gaming in several other states and in Indian casinos. In the late 1990s, off-shore Internet gambling took hold, offering poker and, eventually, betting on sporting events.

Over the years, Nevada interests have transformed from staunch opponents of on-line gaming to cheerleaders for Internet sports betting. A bill now in Congress, called the GAME Act, would legalize sports betting nationally and spur other forms of Internet gaming.

“A component of the GAME Act would allow states to get into internet gaming if they choose to,” says Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada, Las Vegas. “We’re already there. Pennsylvania passed it and (New Jersey, Delaware and the U.S. Virgin Islands) have some sort of Internet gaming.

“What (the GAME Act) would encourage and what industry would prefer is that sports wagering be accessible to mobile and other Internet platforms.”

Many Nevada casino owners no longer fear cyberspace betting would reduce profits, and even if they do, the die has been cast, says Fred Lokken, political science professor at Truckee Meadows Community College in Reno.

“(Nevadans) realized the horse is way out of the starting gate,” he says. “There’s so much off-shore activity going on, so much money involved, and the casino corporations are losing revenue. Nevada is the recognized entity that can sort this out and help establish appropriate rules and regulations and, at the same time, make sure revenue flows to Nevada. I’m kind of surprised we didn’t do it years ago.”

How much money changes hands illegally? Estimates range from $80 billion to $350 billion annually. Nevada wants a cut, and also wants to help determine the regulations.

Robertson says Nevada has the expertise to lead the changes if the GAME Act passes.

“The federal government and a lot of people in the industry would like to see some kind of framework set up so that you don’t have a bunch of different laws in different states trying to regulate an interstate activity,” she says. “That’s what the GAME Act would do, spell out what the federal government would like to see in a regulatory environment so that states treat it consistently… That’s the goal.”

Not everyone is on board, though. Las Vegas billionaire Sheldon Adelson, chairman of the Las Vegas Sands, declared his opposition to on-line betting in 2013 and has doubled-down since then. He has said he will spend as much money as it takes to defeat on-line gaming proposals. Most recently, the Adelson-backed Coalition To Stop Internet Gambling unsuccessfully tried to block Internet gaming in Pennsylvania, which is slated to go on-line next year.

Among Adelson’s objections: Internet gambling would expose children to gambling and feed an addiction in adults who can’t afford to loose. “Click your mouse and loose your house,” he wrote in a column for Forbes. In that piece, he also says that on-line gaming is “suicidal” for Nevada casinos because they would be cannibalizing their own businesses and eventually smaller “non-branded” web sites would saturate the market with cash incentives that will undermine corporate profits.

Steve Wynn, another Las Vegas heavyweight, also has spoken out against the expansion of on-line gaming, saying he agrees with Adelson that web-based systems won’t be of any advantage to Vegas.

But several other major Nevada players, including the MGM and Caesar’s, are proponents of Internet wagering, which is already legal in Nevada. Some observers say the traditional objections, both moral and economic, just don’t hold water.

“The industry pretty much agrees that it’s not going to have much of an impact on Nevada,” Robertson says. “People are betting illegally. Sports betting is not a large part of gaming revenue in Nevada. A very small percentage of visitors come to Nevada for the primary purpose of sports wagering. (Gamblers) are finding illegal channels. Many corporations that offer sports betting in Nevada often are licensed in those other jurisdictions anyway. And they have systems in place for such things as sports integrity monitoring, tech support and having relationships with regulators.”

She notes that when casino gaming expanded elsewhere, Silver State interests worried that “Nevada would basically die. That didn’t happen although it did have greater impact on Northern Nevada.” According to academic studies, Reno and South Lake Tahoe – which depend on patrons from Northern California — experienced substantial slowdowns with the advent of Indian casinos; Las Vegas, an international destination, had continued growth until the 2007-2009 recession, the studies note.

And the moral argument that children will fall prey to digital gaming? “We’ve gone down that road with Internet porn,” Lokken says. “Informed parents will take advantage of safeguards.”

He says allowing U.S. corporations to get a piece of the Internet action has advantages for players: “With off-shore sites, there’s no guarantee you’ll get your winnings and you can’t appeal to any regulators,” Lokken says. “At least the corporations will play by the rules.”

The change is destined to happen, he says, because the industry has reached a point where brick-and-mortar casinos aren’t paying off the way they used to. “It’s a crazy industry; they’ve been doing the same things over and over and not getting much out of it,” Lokken says. “Investments in China casinos are not paying off. They can bring that market to their doors via the Internet.”

But don’t bet on national on-line gaming happening real soon.

“I don’t know what motivation Congress has to take on a gambling bill,” Robertson says “Clearly, there are more pressing issues the public wants addressed.

“… I’d love to see regulated sports betting [expand]. It’s clearly happening illegally already and the smartest approach, no matter what, is to have clear regulations that would help protect consumers and the integrity of the process.”