Veteran casino sports book industry executive, Vic Salerno, in a special commentary for CDC Gaming Report, is warning that the financial fragility of the sports wagering business should temper some of the enthusiasm of industry stakeholders currently salivating over the possibility of the U.S. Supreme Court ruling PAPSA unconstitutional.
Oral Arguments were heard Monday in Washington in the case Christie v. NCAA in which New Jersey is seeking to overturn the Professional and Amateur Sports Protection Act of 1992 (PASPA) that renders single-team sports betting illegal everywhere except Nevada.
Salerno notes sports wagering is successful in Nevada because the state has created a friendly (low tax) environment to conduct business. Salerno, a member of the American Gaming Association Hall of Fame and an industry pioneer in Nevada, believes that sports wagering can only succeed nationally if legal bookmakers offer a competitively priced product, pay timely, and are subject to stringent regulations.
He warns that the sports book industry is a very tough area to succeed because of its low profit margins.
Salerno says, “It is now time for a dose of reality. While the sports betting business in Nevada creates excitement, and can be a significant draw, it is a minor contributor to the overall bottom-line success of Nevada casino operations.”
Salerno, now president and founder of USFantasy Sports and USBookmaking, cautions that if high tax rates force an increase in the cost of making a bet by increasing past Nevada’s and illegal offshore books’ usual 10 percent, “the black market will flourish, and the casinos will flounder under the crushing weight of taxes and open palms.”