Nevada became the blueprint and the benchmark for every state considering legalizing sports betting when the Supreme Court made it a possibility with the repeal of the Professional and Amateur Sports Protection Act in May of 2018.
Las Vegas was the sports betting capital of the world. It was a tourist mecca. Its regulatory structure represented what regulators in states with aspirations of creating legal sports betting economies considered the standard.
The eccentricities of individual states with very individual gambling legacies – or none, as in the case of Tennessee before legalizing sports betting last year – prevented a complete cut-and-paste of the type of rules and infrastructure that made Nevada what New Jersey Department of Gaming Enforcement Director David Rebuck once called ???the gold standard.???
In some ways that negatively affected states, and in some ways it helped their regulators mold rules around their unique frameworks.
Either way, it helped reveal where Nevada, the elder of this sports betting enterprise dating to 1949, fit in this modern mechanism where a wager is not just a bet on a game, but an economic driver for local schools or water projects, a new extension of modern fandom, an engagement tool for sports leagues and television networks thirsting for consumers.
This isn???t just $50 on the Cowboys anymore.
Sports betting landscape crowded with competitors, unlikely allies
New Jersey, in surpassing Nevada in monthly handle multiple times since it launched in June of 2018, vetted the theory that online sports betting represented the future of the business. Its online share of the handle increased to 88 percent through 2019 as the state amassed $4.5 billion in handle. Nevada hardly suffered, finishing 2019 with $5.3 billion in handle, but lagged far behind in mobile production, which was made more painful in the coming months when the COVID-19 pandemic forced the closure of casinos, physical sportsbooks and their online iterations.
???I think there are things that [Nevada] can glean from other jurisdictions,??? Brendan Bussmann, a partner with Global Market Advisors told Casinowithclass. ???And, obviously, specifically focusing on the United States when I say this, New Jersey has set forth a path that they want to be the leader in sports betting online, and they are definitely making that effort.
???And I would consider them in a much more advanced regulatory and technology position than some of the things that we’re currently doing here in Nevada today.???
But even with 24 states in some form of legalization and implementation of sports betting – including neighboring Colorado – Nevada (and specifically Las Vegas) retain a prime importance in the American ecosystem, industry experts including Bussmann say. It???s a position, they contend, that is unlikely to be eroded no matter how many other states follow and what their monthly revenue reports reveal in comparison, even if neighboring California – the plum aspiration of the industry with 39 million residents and scores of professional teams – ever adopts legal sports betting, the experts assert.
Nevada, they say, will remain important not because it was first or continues to seed institutional knowledge to other state regulatory bodies in sudden need of expertise.??Las Vegas will remain a destination – perhaps more than ever – for all those new sports bettors from the Northeast and Midwest hoping to now experience on a grand scale this demystified new pastime that was once the domain of illegal offshore websites or the neighborhood bookie in their home states.
Vegas, they say, will be just fine.
???I think that Las Vegas is still the only place in the US that can legitimately be described as a sports betting destination,??? Chris Grove, a gambling industry analyst at Eilers & Krejcik Gaming told Casinowithclass. “I don’t think you find that sort of scale and density of sportsbooks that you find in Vegas anywhere else in the U.S., and, honestly, I don’t think you’re likely to for some time to come, in a world where dozens of states offer their own casinos, yet people still travel to Vegas to gamble on a regular basis.???
Bussmann agrees that Nevada sports betting remains a benchmark, albeit not a perfect one in all aspects. And even as its economy is driven ever more by tourist families that may never place a bet, Nevada needs modernization, he said, in its gaming structure. And there are lessons to be learned by gazing east.
???Nevada is still and always will be the sports betting capital as it currently leads in gaming or sports betting revenue, but also from the standpoint of setting and establishing the baseline for states,??? Bussmann said. ???With that said, though, I think there are some things that Nevada can evolve from and as it’s looked to other jurisdictions that have expanded, one of those obviously is the technology advances that have come with mobile registration and being able to register via mobile.
???And I think the other thing that we saw through the pandemic while the casinos were shut down, not that we’re out of the pandemic, is the ability to fill your account. In 2020, to have to create drive-throughs through a porte-cachere so a sports bettor can log in and add funds to his or her account, that???s not good.???
Mobile betting represents a major improvement area for Nevada
Modern humans can facilitate dining, dating, shopping and commuting on a smart device. In states that have legalized sports betting most successfully, mobile and online betting has been the driver. Though state legislatures and regulators have moved at varying speeds to reach these conclusions, the ability to establish and fund accounts and make wagers online is viewed as a key facet of a successful market.
Statistics show it does not ???cannibalize??? profits from retail parlors or other forms of gaming. It allowed states like New Jersey to maintain some tiny semblance of an industry when COVID-19 smothered the gaming sector by forcing the closure of every casino property in the country.
Nevada regulates online sports betting, but it is often a source of derision or at least frustration from social media gambling personalities and industry insiders alike. In-person registration and funding are at the center of it. They are the vestiges of a monopoly Nevada no longer possesses.
???Look, I think anyone using an app on their phone expects to be able to kind of sign up and do everything that they need to be able to do to use an app just on their phone,??? Grove said. ???That’s a pretty standard expectation for consumers with any kind of app.
???And so I do think that it’s probably disjointing to consumers to realize that there are additional steps outside of the app that they need to take in order to bet with their phones here.???
As long as New Jersey keeps hauling in billions in yearly handle – depriving New York as much as $6.3 billion in lost tax revenue with its residents crossing bridges and tunnels to place legal mobile bets unavailable to them at home – it will be that comparison
One industry analyst told Casinowithclass that ???the other states are learning more from New Jersey at this point??? because ???they’ve got physical and they’ve got online and they’ve managed to make them both work.???
Circa Sports, South Point and William Hill sportsbooks were spurred to offer drive-through service when their physical sportsbooks were shut down this spring so customers could open or replenish accounts or cash winning tickets. Circa operations manager Jeff Benson told Casinowithclass at the time that he hoped that the episode would spur state regulators to modernize. The Nevada Gaming Commission signaled such a possibility recently, in late June moving ahead with a plan to explore cashless wagering systems.
Kudos to @IGTNews for their quick work introducing innovative digital products in Nevada. Hopefully this will be the first of many positive developments we see for consumers and public health from the introduction of payments modernization. https://t.co/3IklkOPnnk
— Bill Miller (@BillMillerAGA) July 13, 2020
Bussmann said those first steps and the July 15 Nevada Gaming Control Board discussion ???removing the requirement of separate wagering accounts for pari-mutuel horse race wagering,??? according to the meeting agenda, were a major step toward modernization for Nevada. The proposal is scheduled for implementation in September.
???There’s definitely some things that Nevada is looking at, but needs to continue to look at, to evolve in the sports setting world as technology advances have moved forward,??? Bussmann said, ???to be able to know your customer better, be able to understand them as well as put in the financial mechanisms to track suspicious activity, as well as have responsible gaming measures in place to expand upon those that may have a problem or may want to set their own limits.
How will the sports bet of the future be placed in Nevada?
Bussmann expects the act of betting in Nevada to evolve into a hybrid experience as the state improves its mobile and online offerings, and as Las Vegas becomes a more frequent showplace for the college and professional sports that gambling stigmas once prevented from coming there. The Golden Knights, aided by a rookie-season run to the Stanley Cup finals, are a local passion entwined with sports betting culture at T-Mobile Arena, and the Las Vegas Raiders take up residency this season, bringing the NFL???s long-standing ancillary relationship with gambling to the forefront. COVID-19 shutdowns scuttled an NFL Draft staged before the Bellagio fountains.
???I think that the younger generation obviously will continue to use mobile much more, but I think Vegas will always be Vegas,??? Bussmann, ???in that, even if it’s March Madness and you’re sitting there and watching all these games, you may be betting solely from your mobile device, or you may be going up to the counter. And obviously in-game wagering plays a role in that and what people are able to do.
???And that’s not only because of what you’re able to see on a TV, but now with the sports facilities we have here, where these events are also going to be here, like, eventually a Super Bowl, like, hopefully hosting a March Madness tournament, whether it be a first or second round or a regional, or maybe even a Final Four at some point, those types of things as that regulation starts to evolve from the standpoint of allowing that younger customer to be able to act in a gaming facility like they do in every other transaction they do in the world.???
Circa sportsbook operations manager Mike Van Ermen, whose company was an early Nevada operator to open in Colorado, said during the recent SBC Digital Summit that ???our biggest indicator of ???Will we be attempting to get into a state??? is the remote registration.???
???Here in Nevada, with the absence of remote registration, we???re somewhat beholden to our physical location which is on Fremont Street. If you live up in Reno, it???s a little bit harder for you to currently get a Circa sports mobile wagering account and so one and so forth,??? he said. ???But with Colorado, the presence of remote registration, that takes all the physicality out of it and now if you compare something from point a to point b, we can sit there and say, ???Well, look at our golf odds, look at our NASCAR odds, look at the limits we???re taking on the app.???
???We want to compete based on product and we don???t necessarily be beholden to a specific location, so something like New Jersey, something like Colorado that has remote registration, now the key factor for a customer can be product.???
States develop different betting cultures through history, regulations
There is the image of an East Coast bettor, generally symbolized by a New Jerseyan or Pennsylvanian, thumbing through bets on a mobile device. And certainly, mobile betting has been a boon to both states, with smartphones becoming the dominant mode of wagering in these northeastern states of huge populations and long commutes.
And then there is the image of the Vegas bettor, trundling to the betting window, cash over the counter, betting slip soon back in hand. Over-sized lounger, some drinks, some food, and multiple games on massive screens in a sportsbook.
Grove isn???t sure the stereotypes fit. But if there are differences, he believes they???re a product of environment.
???I don’t know that you can generalize. I think different people, no matter where you are, want different things from the sports betting experience,??? he said. ???I think that if you had the equivalent of the Wynn sportsbook, the Cosmo sportsbook, Caesars sportsbook, the Mirage sportsbook, if you drop, somehow, all of that into New York City, I think people would flock to those outlets.
???So, I don’t think there’s anything unique about the behavior necessarily, of an East Coast versus a West coast bettor. I think it’s just more about what’s available to them. And if my option is sort of driving to Atlantic City to sit in a sportsbook there, or to just use my phone and to not bother with the sportsbook experience ….???
Bussmann agreed, noting that while Nevada bettors were able to brandish a ???wager pager??? in the 1990s, the process of betting was established in the desert by a wealth of retail choices within relatively close proximity on The Strip or elsewhere. The Northeast, with its sprawling population, he said, was always going to create a different experience, just as it will, he added, in every state that legalizes sports betting. And there, too, cultural norms made the act of betting something that didn???t require an exhaustive commute.
???I think it goes to the experience that Vegas offers versus the New Jersey market, that it’s a hike if you had to go place all your bets down at Atlantic City from Midtown Manhattan versus hopping on a ferry and wait until you’re halfway across the Hudson and placing a bet,??? he said. ???I think it also speaks, though to a market that was, and I say this about the whole Northeast market, whether it be New Jersey or Pennsylvania or New York or anywhere else.??
???My standard joke as this was getting ready to be debated in the Supreme court, and after it was heard back in December of ???17, was ???How easy is it to find a bookie in the Northeast???? And I always used Philly as the example. You walk into a bar and say, ???Hi.??? So, having the ability to be able to bet on a mobile device has been out there, has been the norm.???
Nevada???s desert stronghold could be surrounded by gambling competitors
Richard Branson has a vision. And in keeping with the billionaire mogul behind his dozens of Virgin-branded projects from record labels to airlines, it???s ambitious. And theoretically very good for commerce in the state of Nevada.
The reason: Branson wants to get Californians there more efficiently.
Californians pour into Las Vegas each year, gambling, eating, taking in shows, spending loads of money, according to the latest annual report from the Las Vegas Convention and Visitors Authority, which was published in 2019. They really like poker on the east side of the border.
They were statistically more likely than visitors from other areas to have visited more than once in a year, come primarily to gamble and spent at least five hours a day doing so. They overwhelmingly came to Vegas for the purpose of gambling, as compared to tourists from elsewhere.
Their average budget of $658.06 per visit was higher than any other demographic that gambled.
According to the report, 18 percent of visitors to Las Vegas in 2018 originated in Southern California. The 2019 study found that visitors were gambling longer and spending more than in previous years.
Just eight percent landed at McCarran International Airport. It???s four hours up Interstate 15 if they want to do the movie version of the commute.
In Branson???s $4.8 billion hypothesis, high-speed trains would whisk Californians from Southern California to the Strip, fresh, centrally-located and ready to dump their money onto Las Vegas Boulevard.??
Where Nevada sports betting fits in
But would they stay home if one of the litany of sports betting measures ever succeeds? And if a mobile component was included, wouldn???t they become thumb-swipers like their East Coast compatriots rather than languish in traffic heading to a nearby sportsbook?
???Should sports betting be legalized at some point in California, whether that be through the tribes proposal, the legislature or something else that people still will come to Vegas because Vegas is still Vegas,??? Bussmann asserted.
Bussmann and Grove agree that Las Vegas??? status as a tourist destination that also happens to have widely available legal gambling will help insulate it against neighboring states expanding their gambling offerings.??
???I can come here for a weekend. I can go out on a Friday night and go dine at Wolfgang or Emeril or somewhere else in between, wake up Saturday morning, bet as much as I want on college football, maybe place my bets in, go over, hit a round a golf, come back, watch some further games, go have a great dinner, play some blackjack and call the van, hop on the plane the next morning or get in the car,??? Bussmann said. ???There’s very few places you can do that and have all those different aspects that I can have great food, great service, entertainment, sports and casino gaming all in the same destination. And it works. You know, and that’s been the continued evolution of Vegas moving much more to the non-gaming side dating back to ???98, when it went from 50-50 over. And now it’s basically two thirds non-gaming, one third gaming.???
Added Grove: ???California has casinos and California still represents, depending on how you look at it, something like a quarter of the total visitation to Las Vegas. So, it’s obvious that there’s something more at play than just the ability to place a bet.???
Grove noted the now-debunked theory that legal sports betting options throughout the United States were also theorized to hamper Nevada gaming revenue. Meanwhile, Nevada continues to thrive and states like New Jersey helped rocket the national legal handle to more than $22 billion.
???I don’t think there’s any reason why it has to be a negative hit. Bettors in California already have plenty of options for betting illegally on their phone. So it’s a false dichotomy to say they’re either coming to Nevada or they’re not betting at all,??? Grove explained. ???So, all of those options really exist in the status quo. And certainly there’ll be some people who currently come to a Las Vegas sportsbook from California that now go to a California sportsbook. But the other side of that scale is that legalizing sports betting will also introduce a lot more people to sports betting in general, will create a lot more sports bettors and a lot of them will want to come to the place where it happens.???
Grove said the most apt analog is the poker boom of the early 2000s, when online, regional and Las Vegas enjoyed what he describes as a ???simultaneous peak.??? Everyone thrived.
???It’s not a zero sum game where just because it becomes legal in one place, another destination has to suffer, or because now you can do it online that retail has to suffer. It doesn’t have to be about the sense of Vegas versus the rest of the country, or, retail versus versus online. … We’re pretty early in this market,” he said. ???If you took the perspective that a lot of people are taking on sports betting, now you’d say, ‘Okay, imagine a world in the 2000s where all of a sudden, every casino in Indiana and Pennsylvania and Illinois, they all had poker rooms where they didn’t the night before.??? Well, that seems like it’ll just kill poker in Vegas because now those people are not going to come to Vegas. And the exact opposite occurred, right?
???The World Series got bigger and bigger every year. Overall traffic to poker rooms in Vegas soared. New rooms opened, larger rooms opened. So, you know, that this idea, again, that has to be a zero-sum game, I don’t think is necessarily born out by the experience that we’ve had with the expansion of gambling and in general in this country. And then I think that specific examples, poker???s really instructive.???
And ultimately, Vegas, is still Vegas. And what happens there still matters.