Taking sports betting to global market

Jun 7, 2005 7:42 AM


For the past 20 years, David Lee has been a luminary in Nevada’s race and sports wagering industry. Most recently he was corporate race and sports director for Mandalay Resort Group, where he directed and oversaw race and sports wagering for seven world-class hotel-casinos in Nevada.

Prior to Mandalay, Lee served in similar positions with Harrah’s and the Holiday Casino.

Since 1991, Lee has been associated with the Nevada Pari-Mutuel Association — initially as a charter member and for the last six years as a full participant on the pari-mutuel committee.

Lee is also president of International Race and Sports Consultants, a consulting firm that has collaborated with major gaming corporations, tribal gaming operations and international organizations in helping to establish legal sports wagering in various venues outside of Nevada. He has also assisted foreign governments in writing and implementing regulatory requirements for race and sports wagering.

His expertise in dealing with the international gaming community was among the reasons Lee was recently tapped by Scientific Games to establish an International Sports Division that will be headquartered in Las Vegas.

Lee, who carries the title of vice president, said he is currently looking for a 2,500-square-foot facility, although he’s already begun laying the groundwork for Scientific Games’ new sports wagering operation.

"We’re working with several countries right now, including Mexico, Korea and European marketplaces," Lee said. "We’re also looking at Australia and South America."

Scientific Games already has in place a racing division that operates and provides hardware and computer software for racetracks and off-track betting facilities worldwide.

"We’re now going into existing casinos throughout Europe, the Caribbean and Mexico and putting in cutting-edge sports wagering equipment, digital boards and other equipment," Lee said. "In a sense, we envision ourselves as the international version of Leroy’s sports books."

Besides supplying the latest in high-tech bet processing equipment, Lee’s division will provide betting lines and other risk management services — just like any Nevada bookmaker.

"I expect to have on staff at least three bookmakers in Las Vegas who will assist in managing the risk of operation," Lee said.

Although "managing the risk" sounds somewhat foreboding, Lee says the bookmaker side of the operation is actually a "fun job."

"It’s always been an exciting process," he said. "This is the only corner of the casino where you make bottom line decisions moment-by-moment.

"You don’t have that risk when managing a slot floor or table games — those operations pretty much run on their own with a built-in risk factor," Lee said.

The two sports book packages that Scientific Games is offering the international community are both turnkey operations, Lee said.

"In the first scenario, we supply the equipment, hire the staff and train them, and give the owners a fixed percentage of the revenue," Lee said. "In the second scenario, we do everything the same way, except we’re partners with the host/owner, sharing in the expenses and revenues."

Lee said the potential market for sports betting on a global scale is virtually limitless.

"Really, for the first time, sports wagering is going international — there has been an expansion of betting on American sports outside the U.S.," Lee said. "Oddly enough, this new phase of international sports betting has been fueled in part by the off-shore sports book industry."

Lee said that off-shore sports books have brought an awareness to American sports that wasn’t available in foreign markets.

And, while off-shore books have had a head start, Lee is confident there is a huge market for legal, licensed sports books in international jurisdictions.

On a local level, Lee is also optimistic about the potential for interstate horse and sports wagering in Nevada.

"While I was at Mandalay Resort Group, I wanted to be the first casino to handle interstate wagering," he said. "We were ready — we had the off-track facility in place. I knew we could sell and compete with off-shore betting."

Two years ago, the Nevada legislature approved interstate race betting, but the Gaming Control Board is still in the process of drafting the regulations. An insider told GamingToday that those regulations could be ready within the next few weeks.

Even though Scientific Games currently has no role in interstate race wagering in the U.S., Lee said he is excited for his Las Vegas colleagues.

"While on the pari-mutuel committee, I could see the excitement and interest of the members, so I’m happy to finally see interstate wagering come to the state," he said.

One of the technological issues that had to be satisfied for interstate wagering to proceed was a telephone system that ensured wagers were posted from qualified bettors. A cellular phone with global positioning and other enhancements seems to have satisfied regulators, which last month approved a couple of systems for use by phone bettors.

"These phone systems will be a major step for Nevada," Lee said. "Imagine you’re at lunch or on break from work. You can use your cellular to get racing information, the entries, even handicapping information. Once you’ve made your choice, it’s then a simple matter to place the actual bet."

Lee said technology has become a vehicle that can transport race and sports wagering to new heights.

"We’re currently working on a lottery system in which a player takes a team, guesses the score and makes other predictions surrounding the game," Lee said. "We’ve never been to this point before. There’s really no limit to where these things can take us."