Why you should care
Because all bets are now off.
This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.
WHAT TO KNOW
What’s happening? Following last year’s decision by the U.S. Supreme Court to end the federal prohibition on sports betting, states across the country have moved to legalize the practice — and cash in on the $60 billion business. With its original series Against the Spread, OZY provides an in-depth look at ways in which legal gambling will change the future of your favorite sports … possibly for good.
Why does it matter? The nationwide shift in how we follow and consume professional sports is guaranteed to have a spillover effect on everything from finance to politics to media. But the question is: for better, or for worse? On one hand, innovative modes of betting offer new ways to build lasting bonds with fans or even boost otherwise unpopular sports. But it also raises new questions about the explosive mix of competition and big money.
HOW TO THINK ABOUT IT
They’re betting on it. As far as gambling goes, Major League Baseball and the NBA made clear they’re not on board — unless they get a cut of the profits. Calling for so-called “integrity fees” of around 0.25 to 1 percent, aimed at funding efforts to make sure their sports remain untainted, experts say it’s actually “a cash grab” to ensure they don’t “leave the sports betting discussion empty-handed.” In New Jersey alone, sportsbooks have taken $1.95 billion in bets from June 2018 to April 2019; just 0.25 percent would add up to nearly $5 million in that span — from a single state.
Spectator sports. Pro teams are also seeking to harness the powers of legalized gambling to boost their fan base. Squads from the NBA and NHL are already developing in-stadium lounges, interactive television channels and apps designed to keep fans engaged by letting them place wagers during games. These betting platforms offer teams a fresh route to building a lasting connection with fans, who’d otherwise look to external sportsbooks instead — in addition to helping the teams’ bottom line. It’s working too: Some 90 percent of Sacramento Kings fans who placed predictive bets in the team’s Skyloft Lounge came back for more.
Up-and-coming. Gambling is also boosting a sport that has yet to make the leap into a big spectator draw: lacrosse. The fastest-growing high school sport, its collegiate presence — up from 30 NCAA men’s programs in 2001 to 72 now — is key for expansion into middle America, while its demographics (primarily well-off White people) align well with active gamblers. The high-scoring game is also a handicapper’s paradise, and given its under-the-radar status, bettors with in-depth knowledge of the sport could easily gain a solid edge.
Inside track. But with serious cash comes serious problems — and just like with the stock market, insider betting remains a threat in sports gambling. Think about what the inside dish on Kevin Durant’s calf would have been worth in the early games of the NBA Finals. That’s why states are currently mulling legislation either prohibiting operators from allowing people with exclusive information to place bets, or punishing bettors who use such information. Meanwhile, a federal bill is in the works with language nearly identical to rules that govern insider trading as it applies to securities. While these moves might appear preemptive, experts say solid legislation is crucial to prevent big-money betting from marring sports.
WHAT TO READ
A Former ESPN Editor’s Big Bet on Sports Gambling, by Tony Rehagen in the Columbia Journalism Review
“Millman knew the money and audience was there. At ESPN he created the gambling beat, devoted an entire issue of the magazine to the subject, and set up ‘Chalk,’ a vertical dedicated to odds, trends, and gambling culture. Readers responded.”
Media’s Big Bet: Sports Wagers Will (Hopefully) Keep Viewers Watching TV, by Brian Steinberg in Variety
“What better way to get people to watch live TV than to give them the chance to figure out how to make money off it?”
WHAT TO WATCH
How Legalized Sports Gambling Is Affecting the Gaming Market
“If you really want to bring the illegal market into the regulated market, then it’s very important that they have access to mobile sports betting.”
Watch on Nightly Business Report on YouTube:
The Surprising Sports People Are Betting On
“Tennis, same sort of thing: People will bet set by set, or game by game. You’re taking a longer event and chopping it down into a much shorter event, so people can make their bet and know whether they won or lost in a short period of time.”
Watch on Fox Business on YouTube:
WHAT TO SAY AT THE WATERCOOLER
Competitive cash. When most people think of gambling, chances are they see the considerable risk of losing big. But what if betting were actually a sound investment? Like their traditional financial counterparts, sports mutual funds deal with longer-term investors who are often looking for a newer, more diverse set of investment avenues for their cash — while peer-to-peer betting exchanges pit bettors against one another for an agreed upon price and line, just as they would in day trading.