As Supreme Court will rule, everyone should let Vegas be the model for success
December 12, 2017 3:00 AM
by Scott Schettler
Last week the Supreme Court heard arguments for and against repealing the Professional and Amateur Sports Protection Act (PASPA). They could clear the way for single game sports wagering countrywide.
If PASPA goes down then it must be decided if sports betting is to be controlled state by state or on a federal level. Their decision is expected to be announced in June. The early predictions are sports betting will be OK’d in some form.
Sports bettors nationwide are rooting for a repeal. If they get it don’t expect a seamless Las Vegas betting style transition overnight. So many issues must be thought out before the first wager is taken.
The logical approach would be to welcome Las Vegas corporations that are established in booking sports, then stay out of business decisions, sit back and tax it. That makes too much sense.
Fighting sentiment with logic is almost impossible. First, consider that Las Vegas’ geography is a big reason for the happy medium between Nevada regulators and privately owned Nevada based casinos.
Don’t laugh, think about it. We’re an island contained by a desert. The Nevada Gaming Commission and Gaming Control Board can police, monitor and tax the business in an effective secure way because we’re contained in a small area that’s conducive to oversight. Put multiple sports betting operations in NYC and try to monitor them. What could possibly go wrong?
Say a state government partners with a Las Vegas sports betting entity. Will the new government partners simply keep out of the way or, knowing politicians, will they want their hands on the switch? Las Vegas casinos are obsessed with pleasing the Feds so they will leave us alone. So far it’s worked.
That won’t be the case in the new rookie operations around the country. Will the out of state sportsbooks be diligent in monitoring the action and bettors and filing the mountains of Suspicious Activity Reports and Casino Transaction Reports required by the Feds? Will Las Vegas casinos turn over partial control to another entity and risk losing their license when and if something goes wrong? It will; Goes Wrong is the favorite.
Begin with politicians in control of government, state or federal, who consider themselves sports betting and handicapping geniuses or have “others” touting them. The second guessing begins with the first losing month. We’re not dealing with slots here, booking sports is a gamble, i.e. you can lose. Now we have friction between Vegas sportsbooks and their out of state clients.
A good month dealing sports will show around a 5% profit. Will the new states cut the pot right out of business? A 5% win is a very good month but booking sports is gambling not slots.
It’ll be tempting for rookie politicians to misread the nature of the business, the profit margin is small and fragile. It can be taxed right out of business. We haven’t dealt with the professional players and the players’ union yet or the owners. And now the elephant in the room being college players wanting in on it; believe me that’s going to happen.
If any government, state or federal, runs it themselves and books with their “own money,” i.e. the tax paying public is the bookmaker with no say in it, how long before we see a headline like: “State of NJ Gets Middled for $18 Million.” I don’t imagine they will book that high but who knows. Who gets the blame for bad numbers and how out of whack will the vig and payoffs be?
I sound like Chicken Little screaming the sky is falling; after all, other countries have successful bookmaking operations. The UK has hundreds of storefront betting shops, Ireland has Paddy Power. There are huge offshore books although they are mostly free from government meddling. Could they operate in our political climate?
Let’s end with this cheery thought: What a spot for sophisticated hackers and scammers both inside and out. They will find the weak spots. Take care.