New Jersey Residents Favor Legalizing Sports Betting

Fairleigh Dickinson University’s PublicMind conducted a survey of New Jersey residents to get their opinions on making sports betting legal. New Jersey filed suit against the US stating the Professional and Amateur Sports Protection Act (PASPA) was unconstitutional and violated states' rights. You can refer to a recent post on this blog.

The topic is relevant, and the results are interesting. I would have assumed that, even if a plurality of residents favored legalizing sports betting, that a majority of conservatives would have opposed. That is not the case. With the sole exception of the question of online or internet sports betting, residents approved of the legalization of sports betting in casinos, racetracks and off-track betting (OTB) facilities.

Overall, men are in favor more than women, and liberals and moderates are more in favor than conservatives. But, all groups had a majority (and in some cases, strong) in favor of sports betting. Regardless of what the sports leagues may want, it appears that the people seem to approve of the concept.

The survey questions and responses, broken out by sex and political temperament are shown below, courtesy of the FDU PublicMind website.

a. Would you favor or oppose making sports betting legal in New Jersey at Atlantic City casinos?
	All	gender				ideology
		men	women		liberal	moderate	conservative
Favor	63%	69	58		70	67	56
Oppose	32%	27	36		27	28	38
Unsure	6%	4	6		3	4	6

b. Would you favor or oppose making sports betting legal in New Jersey at horse-racing tracks?
	All	gender				ideology
		men	women		liberal	moderate	conservative
Favor	63%	65	61		68	67	57
Oppose	30%	29	31		27	26	37
Unsure	7%	6	8		5	7	6

c. Would you favor or oppose making sports betting legal in New Jersey at off-track betting parlors?
	All	gender				ideology
		men	women		liberal	moderate	conservative
Favor	48%	51	45		52	51	46
Oppose	43%	42	44		42	42	45
Unsure	9%	6	11		6	7	9

d. Would you favor or oppose making sports betting legal in New Jersey by telephone and the internet?
	All	gender				ideology
		men	women		liberal	moderate	conservative
Favor	26%	30	23		34	27	23
Oppose	66%	63	69		63	65	70
Unsure	8%	7	7		3	7	6

(FDU PublicMind)

Harrah's Names New Online Gaming Head

Some commentators may make more of this than just the obvious, but it is another indicator that the trend for online gaming in the USA is on the upswing after the disaster of the UIGEA. RecentPoker.com reports that Harrah's has named an ex-CEO of PartyGaming as chief of its World Series of Poker and Internet operations. The site quotes the Sunday Times as speculating that Harrah's, by combining these two divisions and installing a seasoned online gambling executive at the helm, may be preparing to possibly expand by acquiring other online gambling assets.

That is speculative, but it does appear that Harrah's is reading the legislative trends in the US, and that their view may be that online gambling is going to make a legal comeback. With the Democrats firmly in control of both houses of Congress plus the White House, the UIGEA could be very short-lived. Please refer to earlier posts here and here with regard to online gambling.

At the state level, it is rumored that California may pursue legalizing intrastate online poker and Delaware is moving ahead with legislation to legalize sports betting, as discussed in a recent post.
This momentum would most certainly been much more muted if the Republicans had won the White House. With the Obama administration, online gambling is viewed as a revenue source and not a vice.

Delaware Sports Betting Bill Progressing

The legislation to authorize sports betting in Delaware passed a legislative hurdle this week. The Delaware House Gaming and Parimutuels Committee released the bill from their committee this week. Certain gaming interests, the NCAA, NFL and anti-gambling interests had been against expanding sports gambling, but the State's need for revenue to relieve a projected shortfall outweighed the special interests' lobbying. More detail on the bill can be found in the Forbes.com article.

The bill keeps the number of casinos at three, but increases the tax rate on slot revenue and institutes a $4.5M sports betting license fee, split among the three casinos. I understand the need for revenue, but increases in gaming taxes don't always translate to increased revenue. In addition, it is important that the casinos are able to generate a profit as well. They are the entities that are taking the business risk.

The sports betting license fee is a bit steep. Assuming the win % on sports betting is 5%, the casinos would have to generate $90M in wagers just to cover the license fee. That doesn't take into their costs of betting lines, sports book property, plant and equipment, advertising and labor costs. The sports bets provided had better be attractive in order to generate sufficient wagering interest. If Delaware just sticks to a sports lottery, requiring a parlay of two or more bets, that offering alone may not be sufficient.

Delaware needs to offer the full spectrum of sports wagers, to include the new pari-mutuel fantasy sports wagers. Fantasy sports is big business, and the three Delaware casinos are racetracks as well, very familiar with pari-mutuel wagering. Also, these tracks already have the proper pari-mutuel equipment in place, just requiring minor software modification to allow pari-mutuel fantasy sports wagers. With almost 30M fantasy sports players in the US, there's a large potential market. Since the population base within a 90 minute drive from Delaware is approximately 35M, there may be as many as 3.5M fantasy sports players as an addressable market by Delaware casinos.

With the pari-mutuel concept, the takeout is much higher than that for parlay bets or straight bets. Pari-mutuel takeout percentages are often 18% or higher. Assuming just a 15% takeout,
only $30M in pari-mutuel fantasy sports wagers would be required to generate the $4.5M to cover the annual license fee. Since the significant portion of the pari-mutuel infrastructure is already in place, this concept could be an easy and profitable portion of the overall sports betting offering.

To learn more about pari-mutuel fantasy sports wagering, see the YouGaming.com website.