Well, it finally happened. This week, the U.S. Supreme Court sided with the state of New Jersey to allow legal sports betting. It overturned a Federal law and returned the decision to allow sports betting to each state as a states’ rights issue.
I have touched upon legal sports betting a couple of times since joining the ABR correspondents a year ago. I knew in my heart that legal sports betting was going to happen. To me, it was a matter of when, not if.
And I felt that being a 20-year resident of Las Vegas, an active sports bettor and a racing person who focuses on newcomers to horse racing that I could bring a unique perspective to ABR readers.
There are still naysayers who want to continue the fight. Sen. Orrin Hatch of Utah wants to reintroduce a Federal law banning sports betting. I’m not sure the appetite is there in the House and Senate to follow through on this.
Former New Jersey Senator and NBA player Bill Bradley, who co-sponsored the original betting ban bill called PASPA (Professional and Amateur Sports Protection Act), told the Los Angeles Times that the Supreme Court ruling will open the floodgates to betting on high school sports. If other states follow Nevada as a role model, this will never happen. It is written into Nevada state gaming laws that betting on high school sports is forbidden.
One of the leaders in the fight to legalize sports betting has been Monmouth Park. In fact, they were proactive enough to hire British bookmaking company William Hill to build a sports book at the Oceanport, N.J. racetrack.
I read where Monmouth Park had hoped to offer sports betting over the Memorial Day weekend. But here is where even a state as proactive as New Jersey must slow down and complete its due diligence.
Since each state is now acting as its own fiefdom, each must pass rules and regulations to oversee this new business. Nevada, again, is a perfect role model as it has already written precise “do’s and don’ts” in maintaining the integrity of sports betting. But if states insist on reinventing the wheel then writing the new regulations will take time.
Another issue I have written about for ABR is the pricing of sports betting. Here in Nevada, the single game price is well known as 11-to-10. You bet $11 to win $10. People outside of Nevada think that creates a 10 percent hold which would make sports betting incredibly lucrative. However, the hold is not 10 percent.
Since this 10 percent “vigorish” is paid only by the losing bettor, the hold is closer to 5 percent. Since all expenses for the sports book comes out of that 5 percent income, it should become obvious that the profit margin on sports betting is actually very tight.
A final point is that the four professional sports leagues – the NFL, NBA, MLB and NHL – plus the NCAA will all seek to be paid for providing the product we sports fans bet on. They have the audacity to call it an “integrity fee.”
This is a key issue as it could raise the cost of doing business. Nevada does not pay an integrity fee to anybody. In fact, it is proven Nevada provides integrity by closely monitoring all bet action for suspicious patterns. Nevada can catch and stop cheaters faster than any league or college can.
If the leagues and the NCAA get their way, expect the single game price in other states to be 11.5 to 10 or even 12 to 10. This is one reason I believe illegal bookmakers will never go away. They can still offer 11 to 10 and you can bet on credit with them.
Richard Eng is the author of “Betting on Horse Racing for Dummies”, an introductory book for newcomers to the sport of horse racing. For two decades, he was the turf editor and handicapper for the Las Vegas Review-Journal. He still handicaps the Southern California tracks and his picks are for sale at www.racedaylasvegas.com. You can email him at firstname.lastname@example.org and follow him on Twitter @richeng4propick and on Facebook.com.