Ever since the United States Supreme Court (SCOTUS) decided to hear New Jersey’s claims, ultimately, about being able to allow sports wagering within their borders, with optimism for a positive ruling, a number of states have passed or are considering laws to permit sport wagering.
Additionally, in that same hope, more than a few gaming operators have retained “sportsbook experts” to help them evaluate and assess what their needs and opportunities will be now that SCOTUS has shown wisdom, allowing states to be the masters of their own sports wagering fate. But who qualifies the experts?
By the sheerest of coincidences a former associate, now running a fairly large property in another state, and I were speaking. In the course of conversation we were speculating about what impact legalized sports wagering would have on regional casinos. He mentioned that they had retained a particular person as their advisor on sportsbooks.
Normally I am a reserved person, not easily surprised nor prone to involuntary reactions, but when I heard the name of their retained expert, I burst out laughing like an old Woody Woodpecker cartoon.
Inspired by the conversation, I made a few calls and found there are a surprising number of people representing themselves as experts on sportsbook operations, some of whom had never worked in or managed a book and some who had worked in sportsbooks but had neither risk nor operational management experience.
In fairness there are some great people out there who have managed some of the largest sportsbook operations Las Vegas has ever seen, but there are far fewer of those people who are legitimate experts than a number of those who are currently self-proclaimed experts.
My point though in raising the topic, centers on a desire to see sportsbooks operated cleanly, effectively and profitably, especially if sports wagering becomes legal nationwide. Sports wagering is the only part of the casino that does not rely purely on math and while math is a strong part of good book operation, lines are usually established based on a blend of analysis and an opinion of what the betting public will respond to coupled with how much risk the book is willing to be exposed to on a particular game or combination of games.
Line movements made by an inexperienced person can lead to a disaster for a book, while movements made by a pro will protect the book and keep the bettors in action. Even the physical design of a sportsbook can make a big difference in operations, customer flow and profitability of a book.
Foremost for every casino considering adding a sportsbook, should be deciding early on if their book operations will be as a casino amenity to help keep their regular gaming customers from going somewhere else or if the book will be a magnet destination like so many of Nevada’s super-books.
Casinos should also decide early on about their exposure limits, nature of marketing, if they will be a low-limit, parlay card focused operation or a high-limit bookmaker targeting premium gamblers or something in between.
Oddly both ends of the business can be equally profitable. Many years ago, two of the most profitable books in Las Vegas were the Stardust super-book, on one end of the spectrum, and the Castaways “Hole in the Wall” book, on the other end. Both were vastly different in their size and customer targeting yet both were roughly equal in their respective profitability.
Coming back to the main point though, now that SCOTUS has done the right thing and tossed the federal ban against sports wagering, many a casino and lottery operator should decide what they want a sportsbook to do for them. After that is decided, then hire a properly vetted (do not just accept their resume, check them out) sportsbook expert to help develop physical layout and operations of the book to fulfill that goal.
Some advice though, for those casinos looking to add a sportsbook – get someone with legitimate book operating experience. Regulating or auditing sportsbooks is a far cry from actually operating a sportsbook, which requires an understanding of risk management, line movement and the role of the book as a part of the casino operations.
On a separate note, over the last few years it seems like every few months we see the passing of a prominent gaming executive, entrepreneur or regulator. Last week was no exception.
Bart Jacka, a former Nevada Gaming Control Board Chairman, and in my opinion one of the better ones, passed away. He knew the difference in enforcing the regulations so as to kick out and keep out bad guys, while not enforcing so tightly as to prohibit the growth of the industry as it was evolving.
A legitimately good person who understood the needs of gaming from both the regulator side and the operator side. Wish we had more like him.