Video Game / eSports Video Site Gets High Score from Amazon

Pithy headline aside, the amount of money Amazon is paying for Twitch.tv is ginormous - like to the tune of $970 million IN CASH.  Definitely a high score!  The site is a live streaming site, where users can watch uploaded videos of people playing video games.  Users can upload their game videos, to include commentary, as well as create "programming" in the form of scheduled live podcasts and/or content.

A huge score for Twitch and again shows indirectly the value of eSports as well as documenting the shift from traditional broadcast content toward user-generated, web- and mobile-delivered content.  The Business Insider story reports that in February, Twitch was fourth in peak internet traffic, behind Netflix, Google and Apple.

For more on this story, see the Business Insider article here.

Atlantic City "Bust" For Revel Casino

You know your property isn't that attractive when you can't attract buyers at fire sale prices. That's what happened last week when Atlantic City's Revel Casino didn't attract any qualified bidders at its bankruptcy auction.  Bad bad news.  According to Caesars Entertainment's CEO, not attracting a bidder, "suggests that even at a de minimis price, people are finding it hard to imaging they can make money operating the Revel." That about sums it up for the Revel and likely for a good portion of the current crop of Atlantic City casinos.  As stated in previous posts, here and here, Atlantic City is in big trouble.

As a result, the Revel is scheduled to shut its doors on September 10th.  Stories on this topic can be found here and here.  RIP Revel, it was nice to know you...

New Tribal Casino Near San Francisco Offers Close Alternative to Nevada Casinos

Nevada casinos have been facing the threat from California tribal gaming for years.  Having a large property within an hour's drive from San Francisco ups this by a couple of notches.  The San Francisco area has around 11 million people.  Having a large gaming property within a 60-90 minute drive can not be good news to Lake Tahoe and Reno casino properties.

The Casino Journal reports "after years of planning and 16 months of construction, Graton Resort & Casino officially opened its doors to the public earlier this week. The $800‐million facility is the closest full‐service casino to the Bay Area, and ushers in a new level of sophistication and excitement to Northern California."  The property will have 3,000 slot machines and almost 150 table games, along with over a dozen restaurants.  This is a big operation and will definitely draw, in my opinion.

What is new is that with this property near San Francisco, this property might draw customers that would have traveled to other Northern California tribal casinos.  A previous post regarding a tribal property near a large metro area is here.  Do not be surprised if more tribes will attempt to build facilities as close as possible to the major population centers.  That effort might run into trouble with regard to on/off reservation regulations regarding properties, historical lands and the like, but with so much money in gambling, the trend is set.  Another post regarding tribal casino economic impact can be found here and a post highlighting the strong competition California tribal gaming is to Nevada casinos is here.

I've discussed earlier what Reno and Lake Tahoe casinos could do to combat this threat.  It is controversial in nature, but desperate threats could make controversial solutions more palatable.  To learn about what Nevada casinos could do to differentiate themselves from California casinos, read this post.

Social Casino Games Win Big

Source:  (2012, September) SuperData.

VentureBeat highlights the research findings of SuperData, which shows that social casino games will earn $1.6 billion in revenues this year, climbing to $2.4 billion by 2015.  Social gaming is coming on strong.  With the transition to more casino-type gaming for social gamers, this group is a key target for those operators in jurisdictions where iGaming becomes more prevalent, or even legal for the first time.  The SuperData report focuses on slots, poker and table casino games, so other skill games like fantasy sports doesn't appear to be included, adding even more revenues to this area.

You can find earlier posts that discuss the blending of skill gaming and wagering here and here.

Expansion of Online Gambling in USA Will Lead with Poker

Casino Journal magazine discussed the efforts to exploit online poker as a lead product in the establishment of the regulated internet gaming market in the US.  The article was part of the April 2012 issue.  With the recent DOJ policy change on online gambling's coverage under the Wire Act, which I posted on here, poker is going to follow the expansion of internet lottery as state lotteries are already expanding their operations online.

The Innovation Group published an estimate of historical and projected growth of online gambling in the US that was published along with the article.  The chart is below:

Source:  Doocey, P. (2012, April) Chipping AWAY, Casino Journal, 20-27, and The Innovation Group.

They are estimating a growth rate of over 29% given liberalization in the US.  I don't know if that growth rate can be achieved, but if those numbers are simply a return to what used to occur (or would have occurred) in the US if the UIGEA did not exist, then perhaps yes, these numbers are reasonable.  My view is that the growth rate will be lower for two reasons:

1. Liberalization will take a longer time coming than anticipated, and
2. The economic recovery will continue to be very slow and lethargic.

Even if the growth rate is on the order of 15% per year starting from a baseline of $4.3 billion in 2012, that would result in a number in 2017 of $8.6 billion.  That is almost double the 2012 projection, but well short of the chart's estimate of $15.6 billion.

Comparison of Horse Racing Advertizing

It's well known that the horse racing industry in the U.S. is in decline and has been so for a number of years. To the industry's credit, they are trying to market to attract new customers. This post will show video ads made by a couple of organizations to show the different approaches. In my opinion, all the ads show innovative thinking; however, innovative thinking does not always translate to a good result. Take a look for yourself!

Here's the first one:



What the heck was the thinking behind this? I go to a shoe store, get some horseshoe-shaped athletic shoes and I slam dunk a basketball over a horse. And THAT is supposed to make me want to go to a racetrack and bet on horses? Really? This ad for the "Sport of Kings" obviously was conceptualized and crafted by the "Kings of Stupid." You think that ad was bad? You can't see the first one they put out that had a nerdy-looking guy go to the same store and get an energy drink that could easily be confused with some alcoholic beverage stereotypically-aligned with a particular ethnic group in the US (one could guess by looking at the store clerk - same guy in both ads). After drinking, the nerd started acting like a lunatic. That ad was SO BAD, you can't even see it anymore - it got pulled off of YouTube.

Where in these "Hoof Locker" ads does the viewer get the hook with regard to attention, interest, desire and action to go to the races? I can't see it, sorry.

Now here's another ad that at least gets the message across about horse racing and racetracks:



Now, this is funny and not stupid or ethnically repulsive. There's a one-minute version of this ad also available for view on YouTube. This ad may not get you to the track, but the viewer has no doubt that this ad is about horse racing and the experience of going to the racetrack - hey, you might get to catch a horseshoe! This ad is much better than the "Hoof Locker" ad.

The same group also put out this ad, which I think is the best of the bunch and communicates the benefits of going to the track the best. It highlights the social aspect, fun with friends, younger people, good food, a chance to win, a clean facility, upscale dining environment, getting up close to the horses, the jockeys, etc. - the complete experience. Overall, the last two are much better than the first. What do you think?



There are other posts on this blog that discuss horse racing, which I recommend you peruse. The most recent can be found here, here and here.

Singapore's Airport Sets Passenger Record in 2011

The Casino Journal reported in its February issue that Singapore's airport passenger traffic rose 11.4% in December, continuing the positive trend since the opening of their two casino resort complexes. For the entire year, Singapore's Changi Airport handled 46.5 million passengers. As a comparison point, Las Vegas McCarran Airport handled 41.4 million passengers, well off its high of 47 million in 2007, before the financial meltdown.

A large difference, of course, is that Singapore is a key air traffic hub in south Asia, with a large amount of business being conducted in Singapore proper. Las Vegas' key attractant is the tourist/gaming industry.

Regardless, it is another point of proof to show that expansion of gaming to Singapore was a smart move, paying immediate dividends. You can reference other posts regarding Singapore gaming here, here and here.

BigLead Sports Blog Sold to USA Today

BigLead Sports, now a property of USA Today, published the top online sports property rankings per number of unique visitors, for December 2011. Which is nice for BigLead Sports, they rank at number 6, at 19.38 million uniques. Very nice. Separately reported by the Fantasy Sports Trade Association in its most recent newsletter, is that the USA Today/Big Lead transaction was valued at $30 million. That may or not be nice. Probably nice, though, for the shareholders of BigLead, which allow them to exit.

Let's look at the comScore ranking and then discuss the valuation of the BigLead property and why or why not the valuation may be reasonable:

Top 15 Online Sports Sites (December 2011)
Unique Users (USA) (000s)
Source: www.comScore.com

1. Yahoo 53,239
2. ESPN 43,252
3. Fox Sports 37,836
4. NFL 26,286
5. Sports Illustrated 20,132
6. BigLead Sports 19,384
7. CBS Sports 18,097
8. USA Today 15,646
9. NBC Sports 14,891
10. SB Nation 9,694
11. BleacherReport 9,178
12. Sporting News 8,798
13. MLB 7,132
14. Stack Media 5,832
15. JUMPTV 4,197

So, was the $30 million price for BigLead Sports a good one? Let's take a look. This site could be described as a blog and aggregator. It has some unique content, but it also pulls in selected material from other sites, to include other owned "partner" sites. It appears to rely on an advertising model as its primary revenue driver. Given the high number of monthly unique visitors, that isn't such a bad idea.

OK, so is the price fair? The assumed valuation for BigLead is $30,000,000 / 19,384,000 or $1.54 per unique visitor. If that is now the going rate for a sports website, that might put a downward bias on the value of similar properties. If the evaluated property had significant additional revenue streams, typical of pay-to-play fantasy sports websites, then $1.54 per unique visitor would have to be augmented by a more common metric associated with gaming sites, such as annual revenue per user or a multiple of gross gaming revenue. Overall, fairly well done by BigLead Sports as they started a blog in 2006 and just under 6 years later have a $30 million exit.

Zynga Exploring Online Gambling

Wall Street Journal's MarketWatch reports that the the Facebook-focused social games provider Zynga is talking to potential partners with regard to expanding into bona fide online gambling. This follows last month's reversal by the Department of Justice on its position regarding the Wire Act. Until this reversal, the government's position was that the Wire Act prohibited all online gambling. Now, their position is that the Wire Act prohibits only online sports betting, which is actually in line with how the law was written.

Zynga, which is now traded publicly under stock ticker (NASDAQ: ZNGA), does provide an online poker game, which players compete for virtual chips, rather than actual money. According to the story, 7 million play this game daily. Zynga is wise to at least look at this possibility, as it is possible that their social games may not have much consumer growth left. In addition, they may be looking to spread out and not be as dependent on Facebook as a customer channel.

As explained in an earlier blog post, the gaming spectrum can be broken down into three component areas: entertainment, skill and wagering. Zynga operates now primarily in the entertainment area, with their poker for fun offering moving into the skill area. If as a public company, they now need to keep Wall Street analysts' lust for growth satisfied, a move into the wagering area may be required.

The issue for Zynga is if their brand is too tightly coupled to fun, social gaming and they would not be successful competing against true gambling brands such as Caesar's, Wynn and Las Vegas Sands. In addition, online gambling is likely to be approved on a state by state basis, with each only offering a few licenses. Zynga would have to compete with established gaming brands as well as tribes, for these scarce licenses. These licenses quite possibly may fetch triple-digit millions each. Zynga may be well served to try and locate unique gaming opportunities that will allow them nationwide exposure quickly, without having to battle on a per state basis. Also, if such gaming opportunities can be independent of Facebook, that would allow Zynga a direct channel to customers without having to pay the expensive Facebook "toll."

Hawaii Again Considers Gambling

KITV reports that the Hawaii legislature is considering legal gambling. Specifically, the current proposal is to allow slot machines and video poker machines in hotel and resort properties. It is a good start, but not really the best. Hawaii should allow full casino gambling in their hotel properties. Slot machines and video poker will generate good revenue to be sure, but the addition of table games would be the attractant to pull the full measure of gambling visitors, particularly Asian patrons, who enjoy Baccarat.

I posted about this topic last year, which you can read here. Casino gambling is a great fit for resort properties. The patrons will enjoy outdoor activities during the day, and enjoy gaming during the evening. The property will garner great revenues both day and night.

The time for this has come. Hawaii, you have the chance to become THE gaming/resort destination in the US. If you added top-notch entertainment, you may beat Las Vegas at its own game. I don't think Las Vegas would want you legalizing gambling. If they don't, does that tell you something?

Fantasy Sports Business Potpourri - December 2010

FantasySportsBusiness.com has an excellent post (Compete.com Reports Fantasy Reach for September) which you should read if you have an interest in the popularity of fantasy sports and which sites attract the most hits. Continuing their unique visitor dominance (based on my recollection) are Yahoo, ESPN, CBS Sports, with a newcomer - the NFL. These players are definitely the big hitters. Not to say that the next tier of fantasy sites aren't big, but the next 15 sites not affiliated with the Big 4 above you would need to aggregate to match the just the NFL's fantasy site unique visitor numbers. Of the Big 4, CBS Sports is the only site that has a big selection of the pay-to-play games. Fantasy sites can break down between games, information, prediction and support.

Game sites can break down between pay-to-play (entry fee) of various buy-ins and free-to-play games. If you are a game-heavy site that is relying on free games, you better have high traffic (e.g. Yahoo).

Information sites also break down between free and pay (premium). These sites that are relying on premium content may face difficulties going forward in my opinion as sites like Yahoo, CBS Sports and Fox's free fantasy information content is pretty good and the differential between free information and premium information may be very small.

Prediction sites may be of dubious value. I personally am not convinced. If interested, read my recent post on the accuracy of one particular website's picks for the 2010 NFL season. If a prediction site has got a really good track record, I can see folks paying for that knowledge, particularly if the fantasy sports player partakes in pay-to-play games. Really good accuracy on a consistent basis would be the key.

Support sites are sites that provide ancillary goods and services to the fantasy sports industry like trophies, draft boards and news blogs (like this one). This blog doesn't get high traffic, but those who like the content patronize the site and this site isn't geared to earn a living for anyone. For other support sites, they're selling their goods and services, so they are evaluated like a typical online storefront.

Lots of unique visitors is the likely cause of the death of a smaller pay-to-play fantasy game website, Sandbox.com. The affiliated story is here. The story relates that their unique visitor totals were in the 20,000 per month range. As a comparison, Yahoo's fantasy sports site had over 6,000,000 unique visitors in September 2010.

Let's take a swag at what Sandbox was facing economically. Taking their unique visitor number and saying all of those were customers that were on their $10/month subscription plan ($120/year revenue), that puts their fee revenue at $2.4 million. For the sake of argument, we'll assume the site has no other significant revenue streams. Since current pay-to-play fantasy games are contests where a decent portion of the entry fees are paid out in prizes, we'll assume that 80% of the entry fees are paid out to players in prizes, leaving 20% as gross profit. This puts their gross profit at $480,000. From that money, costs such as technical development (games and web development), hosting, information services (e.g. statistics feeds), personnel, marketing, taxes, etc., need to be paid. That may be a difficult budget to manage, so without really unique games (hard to come by in the current fantasy sports genre), getting by on just 20,000 unique visitors per month may not have been enough to keep the doors open.

The article finds it interesting that Sandbox is referring players to CBS rather than NBC, since that company is part of the NBC Sports umbrella. It does make sense because Sandbox operates pay-to-play games, which CBS Sports is the big player in that segment.

California Tribal Casino Opens Hotel Putting Further Pressure on Northern Nevada Gaming

The Sacramento Bee reports on the opening of a 300-room hotel, spa and amphitheater at the Thunder Valley Casino, north of Sacramento. This is bad news for gaming properties in northern Nevada. Northern Nevada has definitely been hit by the recession as well as the explosion of tribal gaming in California. By adding lodging to their property, Thunder Valley is even that much more of a draw for gamblers that want to spend the night at a property, but not drive all the way to Nevada. This is a good move for Thunder Valley and bad for Northern Nevada.

I had a post last year that discussed a radical approach to helping Lake Tahoe and Reno hotel casinos compete - putting legal brothels in the properties. That idea was discussed in a Casino Operations class at UNLV last spring and it was not rejected out of hand by the students. What should be noted is that I'm not the first to pose the idea. The mayor of Las Vegas, Oscar Goodman, posited the same idea for Sin City back in 2007. He took some heat for his position, but an opinion piece in the Las Vegas Review Journal supported him. I do too. It makes sense for Las Vegas but makes even more sense for Northern Nevada gaming properties. In fact, it might be a matter of survival.

Tropicana Adding Cantor Gaming's Mobile Product

The Las Vegas Sun reports that the Tropicana is the latest casino to add Cantor Gaming's mobile wagering system. Cantor's system is already installed at the Palazzo and M Resort. I believe that Cantor has an agreement with the Hard Rock, but the system may not be installed yet. Cantor isn't exactly taking Las Vegas by storm, but they are making progress and picking up casino installations.

The Sun story reports the deal to mobile gaming for the Tropicana's upcoming revamped race and sports book, as well as other public areas, such as pool areas, restaurants and bars. This installation is part of the Tropicana's $165M renovation. The Las Vegas Review Journal reports the deal is larger - that Cantor will actually RUN the renovated Tropicana sports book when it opens this fall.

If the Review Journal story is accurate, Cantor running the sports book is a bigger deal. Selling a wireless network coupled with their proprietary games is one thing; taking the responsibility and potential liability of operating a sports book is another. Cantor, if successful, will provide new competition to Leroy's and Lucky's, the two major sports book operators in Nevada. Cantor's mobile gaming system would be a differentiator.

Cantor is the only mobile gaming system approved by state regulators, so they are in the first-mover position in this application area. If Cantor indeeds leverages this and also enters the sports book market, they could easily become a real threat to Leroy's and Lucky's. With regard to the other nascent mobile gaming providers, they are definitely in the rear and losing ground fast.

Tropicana Undergoing Facelift

The Las Vegas Sun reported that the Tropicana will be undergoing a renovation that will cost upward of $165 million. Part of the thrust of the article is that the Tropicana will be losing some of its history, which is accurate. Of course, recent history for the property hasn't been that good, as it emerged from bankruptcy just last summer.

What the management team wants to do is retheme the Tropicana to a South Beach theme from the mix and match of decor installed over the 50 year history of the property. This is actually a very good thing. As the article states, often properties get "renovated" by blowing them up and rebuilding from scratch. The Tropicana will spend a fraction of the cost of a new build to refresh the property.

In addition, management is focusing the market position to a "best in class" position, which means that in their market tier, they are tops. That is also a good thing. The Tropicana isn't going to be able to compete with Wynn or the Bellagio, but they can compete with the mid-tier properties. Also, since the Tropicana is on the northern end of the Strip, their close competition, the Sahara, Circus Circus, Stratosphere (and the Las Vegas Hilton to the east), appear to be beatable properties. The makeover could put the Tropicana as the top property in this area.

I, for one, look forward to visiting after the renovation is complete.

2010 NFL Draft Breaks Viewing Record

The Associated Press reports that more than 45 million viewers watched a portion of last month's NFL Draft. The draft changed to a prime time format for this year, with round 1 on Thursday night and rounds 2 and 3 on Friday night, with rounds 4 through 7 on Saturday. This experiment of the NFL to leverage its popularity year round was successful. Last year, there were a record 39 million viewers, easily eclipsed by this year's mark. The NFL Draft has increased in popularity along with the rest of the league. In 2001, the draft attracted 23.5 million viewers. Viewership has just about doubled in a decade.

With this large viewership, the next step would be to craft a skill contest that could extract revenue from these rabid NFL fans. The game concept would allow viewers to win prizes by correctly predicting draft picks. There is a particular contest scheme that would work extremely well for the NFL draft, which will be discussed in a future post.

Horse Racing Still In Trouble

Horse racing in the US has been in trouble for some time. In the old days, racing was the only legal gambling activity in the US outside of Nevada. With the advent of expanded casino gambling, Indian casinos and lotteries - not to mention online gambling - racing is just one of many gambling outlets competing for market share.

In addition, the racing fan is older. A previous post discussed the age of racing enthusiasts. They're not getting any younger, which will be the end of racing if not reversed as generally dead people don't bet on the ponies, but have been known to still vote.

Not to brag too much, but I wrote a "critically acclaimed" post analyzing the racetrack industry according to Porter's Five Forces model. Who were the critics? Well they were a friendly audience to be sure, but I did receive positive feedback from a noted industry expert, who is quoted in the Casino Journal article which will be subsequently discussed.

Casino Journal magazine had a great article in its February 2010 issue regarding racing. The article does a good job of highlighting the indicators of racing's decline and does a fair job of analyzing why racing is in decline. Adding this blog's post regarding Porter's model will add additional color to the reader's inquiry.

What surprised me in a negative way was that my incorrect impression that racing handle was at least keeping static, albeit not growing. Not the case. The article states that total racing handle (i.e. bets) fell from $15.2 billion in 2003 to $13.6 billion in 2008. Even the off-track handle, which was supposed to be the strongest element (on-track handle was known to be an issue) fell from $13.3 billion in 2003 to $12.2 billion in 2008.

The article touts the promise of off-track betting, betting exchanges and racinos to help racing's future. Not including betting exchanges, the other concepts have been in place for several years and racing is still in decline. Betting exchanges have a flaw in that they are peer-to-peer bets with a low commission (takeout). They are not going to be able to generate sufficient revenue to save the industry and quite possibly will cannibalize the existing higher takeout pari-mutuel wagering base.

What is important to note is that none of these concepts do a thing to address the core issue facing horse racing - the increasing age of the racing enthusiast demographic. The sport needs younger horse players. No one has come forward yet with a concept that holds the promise to do that. There is a new concept that is in early stages of development that might "crack the code" to solve the need for new horse players while also generating increased pari-mutuel revenue for the industry.

References:

Doocey, P. (2010, February), Post Time for Change: Racinos won't save racing - Some fresh ideas might, Casino Journal.

Las Vegas Construction Meltdown Details

To say that Las Vegas' construction has taken a hit is one thing, but to see the details of the crisis makes it quite poignant. The Las Vegas Review Journal as a great article that discusses the current status of several large construction projects halted mid-construction due to the economic downturn.

What drives the point home are the pictures of project after project showing building frames and skeletons. One of the buildings looks more like something you would see from a war photograph rather than Las Vegas. Very sad.

Las Vegas gaming revenue is still down significantly, with Nevada casinos actually posting a loss last year (you can see the blog post here). I don't see the Las Vegas construction situation improving anytime soon unfortunately which is disappointing because Las Vegas is a great town.

Nevada Casinos Post Rare Loss

KNXT reported that for only the second time in history Nevada casinos lost money on an annual basis. The first year that happened was in 2003, while the economy was recovering from the dot-com bust and 9/11. In that year, the 260 largest Nevada casinos lost a total of $33.5 million.

This year?

This year, the 260 largest Nevada casinos lost $6.8 billion, 202 times as much money as they lost in 2003. Huge loss. $4 billion of that loss was by casinos on the Las Vegas Strip. President Obama telling people to stay away from Las Vegas wasn't helping things any. Now you know why the mayor of Las Vegas was so peeved.

The Record-Courier reported additional data concerning the Lake Tahoe and Stateline area, which lost $19.3 million. They define large casino as an operation that earn revenues of over $1 million, so the smaller operations aren't counted in this metric.

Who says that gambling is recession-proof? Not any more. Not that this was completely unforeseen. Nevada gaming revenue had been declining for a while, but to actually incur a loss of this magnitude has to shake up Nevada. You can read previous posts on this topic here and here.

Fantasy Sports Market Metrics

The Fantasy Sports Trade Association 2010 Winter Business Conference was held this week in Las Vegas. A recap of industry statistics was printed as part of the conference attendee booklet. Here are a few snippets to highlight the large size of the fantasy sports industry. The bulk of the fantasy sports industry is in the US and Canada, with the concept slowly gaining traction in the rest of the world.

Fantasy sports participants

USA - 27.1 million (age 12 and above)
Canada - 2.8 million (age 12 and above)

Economic impact

$800 million impact within the fantasy sports industry
$3 billion impact across the sports industry

Fantasy sports participation by sport - USA

Football - 22.2 million
Baseball - 12.5 million
Racing - 9.6 million
Golf - 8.4 million
Hockey - 8.1 million
Basketball - 5.4 million

Fantasy sports participation by sport - Canada

Hockey - 1.87 million (are you really surprised?)
Football - 672 thousand
Baseball - 476 thousand
Golf - 420 thousand
Racing - 350 thousand
Basketball - 196 thousand

Due to the current economic situation, the growth in the industry has flattened but overall there hasn't been a decline, which is actually good news. "Flat is the new up..."

Sources:

FSTA Market Study, Ipsos, July 2009
FSTA Consumer Behavior Study, University of Mississippi, July 2008

Lack of Parity in NFL Increases Sportsbook Risk

The Chicago Sun-Times has a nice article on the lack of parity in this NFL season. The NFL has been touting the "any given Sunday" line for years, stating that any week any team can beat any other team. This year, that tagline has been shown to be completely inaccurate. Do you really think the St. Louis Rams or the Oakland Raiders have a snowball's chance in hell of beating the New England Patriots, Minnesota Vikings, Pittsburgh Steelers or Indianapolis Colts? Nope.

Now TV ratings are not suffering, but there has been some impact with regard to attendance at the home stadiums of the poor teams. The lack of on-site attendance will have a future impact with regard to finances of the poorer teams as although there is sharing of television revenue, the teams use attendance revenue to assist with singing bonuses, etc. So, in this case the rich get richer and the poor get poorer.

Sportsbooks also suffer from lack of parity. That's due to the particulars of spread betting. Bettors put up $110 to win $100. So, for example if the Raiders and Chiefs were playing, with the Chiefs favored by 3 points, if you bet the Chiefs, they would have to beat the Raiders by more than 3 points in order to win the bet. If they won by just 3 points, the bet would be returned and if they won by less than 3 points (or lost the game outright), you would lose.

The sportsbook makes money by taking $110 from bettors on both the Raiders and Chiefs. They take in $220, pay the winner their $110 plus the winnings of $100, and the sportsbook keeps $10, or about a 4.5% profit.

This system works to ensure the sportsbook makes money if you can get equal bets on both sides - in the example equal bets on both the Raiders and Chiefs. Point spreads are set to help ensure this occurs. When the two teams are evenly matched, the spread is low, with the converse when they are unevenly matched. In theory, you can set the spread large enough to attract equal action. In practice, that doesn't always happen.

This is the problem with the current lack of parity in the NFL. If some teams are just horrible, they are just not going to attract betting interest, unless the spreads are set to a dangerous level. Usually, a very high spread may be 13 points. With the current disparity, a game between between a top team and a bottom team might have to have a spread of 20 points or more to attract ANY betting interest on the poor team. So far, favorites are winning and underdogs (particularly of the poorer teams) aren't winning (even against the spread). If all the betting action is on the favorites and the favorites win, there aren't losing bets on the underdogs to finance paying the winners. That means the sportsbook has to pay out of their pocket, which means the sportsbook actually loses money.

Parity in the NFL isn't just good for the fans - it's good for the sportsbooks too.