California Sports Betting Bill Moves Forward

The California Senate Appropriations Committee passed SB 1390, a bill authorizing sports betting in California, out of committee to the Senate floor for vote.  This is a big step, following on the heels of New Jersey's passing of a sports betting law in January.  As explained by the bill's author, California needs to have a sports betting law on the books so when the anticipated legal battle between New Jersey and the US Department of Justice is fought over the constitutionality of the Professional and Amateur Sports Protection Act (PASPA), California will also have an interest in the outcome.

What has been unexpected has been the bi-partisan support for this measure.  The bill had to pass through both the Governmental Organization and Appropriations Committees, with votes required to move them out (Appropriations actually needed votes to move in and to move out).  All three votes were unanimous, with no abstentions.  Both Republicans and Democrats are in support.  This bill has a real chance of getting through.  To track the bill's progress, you can use this link.

Nevada, currently the state with the de facto monopoly on sports betting, has got to be concerned.  If New Jersey implemented sports betting, yes, that would have some impact on Nevada.  If California implemented sports betting, what does Nevada have left as an attractant to California customers, still a major source of gaming revenue?  There was a previous post that posited an idea to help the northern Nevada casinos deal with increased gaming competition from California.  If sports betting comes to California, all of Nevada may need to consider this.

New Jersey's Split Personality With Regard To Legalizing New Gambling

New Jersey.com reports an AP story regarding the results of a recent poll that shows conflicting desire for various new legalized gambling options within the state.  What it shows is that residents desire to add sports betting to the gambling options of the state, but that they like their gambling at brick and mortar facilities.  The recent poll showed that 58% opposed the establishment of online gambling, with just 31% supporting (the remainder undecided).  This poll occurred after a positive vote desiring sports betting and having the associated sports betting bill signed into law by Gov. Christie.  So more gambling is OK, but not just "any" gambling.

With regard to sports betting, the almost opposite result showed in the poll.  The recent results showed that 60% wanted legal sports betting with just 26% opposed and 14% undecided.  Sports betting (but not online - at physical locations) is what New Jersey residents want.  Since sports betting is happening in large measure anyway, but illegally and not regulated and taxed, legalization helps bring this already existing gambling into the open and also will help generate tax revenue for the state.  A true win-win.

Kentucky Derby TV Ratings Up for 2012, but Appearances are Deceiving

Last Saturday the first of the Triple Crown races was held, won in a late surge by I'll Have Another.  Horse racing in the US has been in a decline for a number of years and is looking for good news where it can.  Related posts on US racing can be viewed here, here, here and here.

It was reported that television viewership was up for the 2012 Derby.  A Paulick Report story noted that the Derby obtained more viewers (14.8 million) than each of the following 2012 sporting events:  the semi-final NCAA men's basketball game between the UK and Louisville, the Daytona 500 auto race, and the Masters golf tournament.

To be fair, the comparisons are all against cherry-picked examples.  The story didn't compare them against major college post-season bowl games or MLB, NBA or NFL playoff games.  The numbers for the 2012 Kentucky Derby were about the same as the average viewership for the weekly Monday Night Football (MNF) game in 2011.  That isn't bad, but remember Monday Night Football is broadcast on a cable network (ESPN) and not an over-the-air broadcast network that has more reach (NBC).  The last year an over-the-air network (ABC) broadcast MNF, it averaged 16.3 million viewers per week, significantly more than the 2012 Kentucky Derby's 14.8 million.  Also, the Kentucky Derby is one of the big races whereas Monday Night Football is the only football game telecast that day, but there are 17 of them per year.  The AdWeek story on MNF's viewership can be found at this link.

From the Paulick Report story*, here are the top 20 Kentucky Derby Nielsen rating TV markets:

1. Louisville 50 KD
2. Cincinnati 34 KD
3. Ft. Myers 62 F
4. W Palm Beach 38 F
5. Buffalo 51
6. Columbus 32
7. Knoxville 59
8. St. Louis 21
9. Boston 7
10. Indianapolis 25
11. Tampa 13 F
12. Orlando 19 F
13. Baltimore 26 PK
14. Richmond 58
15. Pittsburgh 23
16. Greensboro 46
17. Milwaukee 35
18. New York 1 BS
19. Nashville 29
20. Providence 52
21. Dayton 64

*In the original list W. Palm Beach, Buffalo and Columbus tied for #4 and New York, Nashville, Providence and Dayton tied for #19.

I added a couple of pieces of information to the list.  First, I added the city's TV market ranking per the StationRanking.com website.  Second, I added the letter "F" to markets in Florida and either "KD," "PK" or "BS" to markets closest to the racetracks hosting the Triple Crown races: Kentucky Derby, Preakness or Belmont Stakes.  Cities close to Triple Crown hosting tracks should generally have good viewership interest.  Florida, facetiously known as "the retirement state," has a large body of senior citizens, which is the stereotypical horseplayer demographic.

Analyzing this body of data, the results don't look as good.  Only three Top 25 US TV markets are in the top 10 of the Derby viewership markets (St. Louis, Boston and Indianapolis at 8-10).  Of the entire 21 markets listed, only 7 are in the US Top 25.  Of the top Derby TV viewership markets, 4 of the top 10 and 7 of the 21 markets listed are ranked 50 or lower in the top US TV markets.  Of the markets that are close to Triple Crown-hosting tracks or are in Florida, 8 of them are in the top Derby viewership markets.

Overall, although Derby viewership may be higher than previous years, the overall viewership is not all that impressive and skewed toward those markets expected to be interested in the Triple Crown races.  Given the average age of the horse racing enthusiast is 50 or older, racing still hasn't figured a way out of the problem that their fan base is aging and in truth, literally "dying off."

NYRA Takeout Scandal: CEO and General Counsel Fired

There's a big scandal brewing at the New York Racing Association.  Late last week, the State of New York's Racing and Wagering Board, released an interim report into their investigation of incorrect takeout rates.  A telling quote from the report, “various NYRA officials, including the president/C.E.O., were aware that the ‘takeout’ rate was above the legally allowed rate, yet continued to collect it,” appears damning.  Yesterday, the NYRA Board suspended, the ultimately fired the CEO and General Counsel.  In addition, as reported by BloodHorse.com, the state's Inspector General's office began a formal investigation, which could ultimately result in criminal charges and perhaps lead to the stripping of the licenses to operate the Aqueduct, Belmont Park and Saratoga racetracks.

The Daily Racing Form is also involved in this story.  According to the report, there was an email exchange between the NYRA CEO and the publisher.  Apparently, the publication forwarded an email stating the NYRA was overcharging.  The CEO verified the charge and asked the publisher to keep that information confidential, which the publication did, until the issue was discovered and publicized separately.  Quoting the story, "according to the report, 'Mr. Hayward (NYRA) emailed Mr. Crist (DRF) on August 1, 2011, confirming that the reader was correct and requested that Mr. Crist keep the information confidential. Mr. Crist agreed.' "  Why have an industry publication that won't break this kind of news story?  The New York Daily story on this topic can be found here.

Horse racing in the US is in bad enough shape without these devastating self-inflicted wounds.  How much more damage can this industry take before the public and the politicians determine enough is enough?