BETTING ON GAMBLING
Murphy’s keynote speech lays out plan to make New Jersey sports wagering capital of nation
SECAUCUS, N.J. — It’s 11 a.m. on a Wednesday and New Jersey governor Phil Murphy is pitching the state to a room full of people who want to make money in sports gambling. They’ve gathered at a convention hall in Secaucus for the Betting on Sports America conference, a wild west of possibilities with gigantic dollar signs.
“Nationwide we are in the early days of what is estimated to become a multi-billion dollar market, and that’s just the revenues that sports betting operators will earn from hundreds of billions of dollars in bets,” Murphy tells the assembled. “My vision is for New Jersey to continue to lead the way and be both the intellectual and technical capital of online sports wagering in the United States, the place where new technologies are built and proven, and the place that other states emulate in creating a regulatory structure that allows the marketplace to be able to thrive.”
That this is happening in broad daylight, in front of television cameras, is a testament to how quickly a onceillegal enterprise can be legitimized.
It was just 11 months ago that a Supreme Court decision allowed states — in addition to Nevada — to regulate sports gambling, and 10 months since Murphy cast the first legal sports bet in the state – for Germany to win the World Cup.
He’s hoping these big-picture bets on a new industry come with a better payoff and there is reason for optimism. Murphy said $2 billion has been wagered in the state since his losing bet, and next year, he said, New Jersey is looking to overtake Nevada as the top state for sports betting.
New Jersey isn’t the only entity looking to capitalize on the emergence of a new market. Outside of the room where he spoke, vendors had set up a vast wonderland of sports-gambling related booths. There are leather chairs with “The Book” embroidered in white thread. There’s a delightful wall of donuts. Bars are manned by women dressed like referees. In fact, so many booths look like sports bars that it’s clear to see where all this is heading; out of the casino and straight to consumers.
There are video gaming consoles, companies that sell data, software or security for existing online gambling sites and those no doubt to come. Many of these operators are new and U.S.based, but a great number of them are based overseas, where sports betting has been legal for decades. If you wanted a short hand to understand this conference, just think of men with British accents explaining sports wagering to men without them. Also, everyone has visited the gambling paradise of Malta.
These gaming products are being built for markets that do not exist yet. Some states have legalized sports betting, others are considering and some are unlikely to enter the market at all.
“If we step back in the U.S., sports betting was legal in only a few places for years and it was mostly Nevada,” said Robert Davidman, a partner at Fearless Agency and a speaker on sponsorships. “Most people in the U.S., with the exception of the sharps … people don’t know how to bet. They look at these numbers and they get confused and they turn it off or they think, ‘Oh we can’t do that.’”
Professional American sports leagues offer credibility and name recognition to these companies, so partnering with the NBA can open the door well beyond basketball fans.
“There are people all across the country who aren’t familiar with it and frankly might not be comfortable with it,” Cleveland Cavaliers VP of global partnerships Shelly Cayette said. “But if a team partners with the company it might make Cavs fans feel better about it.”
It’s just, is the average American sports fan — the couple sitting in the bleachers or the mom and dad taking their daughter to her first NFL game — ready to have their favorite sports come with in your face sports betting?
And that’s something each league is wrestling with, some more publicly than others.
“There needs to be with these sponsorships, the ability to engage the consumer, teach them how to do it, create an experience that’s easy, that allows them to understand what they’re doing, and make it fun,” Davidman said. “…One of the problems is the operators who come from the U.K. and from Europe, they come with the mindset is that everybody knows what this is. The reality is, no one knows what this is . ... You as the team have that relationship with the fan. You then give the operator the opportunity to have that conversation with the fan.”
Bill Ordower, EVP and general counsel for Major League Soccer, said he could soon see a team with a jersey patch from a betting company if only because soccer audiences are used to those affiliations due to similar arrangements in the Premier League. Kenny Gersch, the EVP of Gaming and New Business for Major League Baseball, said he wanted to see sports books use official MLB data and stats and partner with the league.
There’s also this sense that the rules are all about to change. And why wouldn’t they? It was just a year ago that all of this was illegal in all but one western state, now dozens of states are implementing their own systems. There are still some legal impediments, and one panel was devoted simply to the Wire Act and the impact its interpretation was having on wagering and state lotteries.
“The Wire Act was part of a package of organized crime bills that then-Attorney General Robert F. Kennedy supported, “Mark Hichar, an attorney whose expertise is in gaming law. “At that time they were thinking of telephones, everything traveled over a wire.”
Now, with cell phones and satellite uplinks and electronic transfers, decisions about the future of this industry are being made within the framework of 1960s technology. And few expect a fractured congress to do anything to fix these issues, so decisions are made one court decision at a time.
Are you getting a sense of the chaos in this new market and, attendant with it, the opportunity?
There is gold in the New Jersey hills, and in New York’s too if the legislature were willing to open the market. People will get rich, bettors with less to wager than Phil Murphy will lose their shirts and the average sports consumer is about to get an education in how it all works.
Whether they like it or not.