Pari-mutuel wagering in its application manifests certain peculiarities associated with the psychology of wagerers. A quick article on this topic was presented by William Shanklin in BloodHorse.com. We'll quickly discuss a couple of these peculiarities.
The first is that favorites tend to be bet less than their realistic chance of winning and longshots tend to be be more than their realistic chance of winning. The reason for this is simple. A longshot will pay more than what a favorite will pay. So for a bettor, wagering $2 to win on a favorite at even money is less sexy than wagering $2 to win on a longshot paying 30 to 1. It is similar to the phenomenon where people tend to buy lottery tickets when the jackpot gets high. Bigger potential payouts generate more wagering interest.
The other relates to the relationship between field size and overall wagering interest. Typically when the number of entries in a race falls under 8, the wagering on that race tends to diminish. That is why racing secretaries try to have races with 8 (or more) entries to maximize wagering handle. Another related concept is the concept of partition dependence. This term means that people tend to think some event is more likely to occur if it is partitioned in smaller intervals.
To describe, let's use an example of how many games the Dallas Cowboys will win this NFL season. If you had just two intervals, 0 to 7 games and 8 to 16 games, wagering on this offering would be less than if you had the following intervals: 0 to 4 games, 5 to 8 games, 9 to 11 games and 12 to 16 games. As you can see, this also tends to illuminate the concept that more entries in a wagering offering is better.
There is a point made in the article that coupled entries attract less wagering interest than if each entry was wagered on separately. This does not mean that coupled entries don't have utility. In ProContest.com's pari-mutuel fantasy sports contests, coupled entries are used often as a Field/Other entry, in addition to large fields of players, giving players the ability to select any player, not just those specifically named. This functionality, even though a coupled entry, does tend to increase field size/more partitions, which is typically a positive with regard to wagering handle per race.
Showing posts with label betting. Show all posts
Showing posts with label betting. Show all posts
Thursday, October 31, 2013
Thursday, August 29, 2013
New Jersey Casinos Not Yet Offering Fantasy Sports Contests
Although New Jersey published regulations authorizing pay-to-play fantasy sports contests back in March, not one Atlantic City casino has of yet moved forward with an offering. The reasons for this are discussed in the story, which can be found here. The were two primary reasons discussed detailing why no fantasy games are yet offered. One is that the casinos didn't see a successful path forward competing with larger, national entities such as ESPN. The other is that this is summer and allegedly sports betting only revolves around the NCAA basketball tournament and the Super Bowl.
I'll quibble with both of these reasons, but first I do need to quibble with the article ever equating the concept of fantasy sports contests and betting. Playing fantasy sports games is not betting. Fantasy sports games are a game of skill and by legal definition not gambling, provided the games, gameplay and prize structures fit within the statutory safe harbors. It is just journalistic laziness to refer to such contests as betting.
With regard to the reason that the casinos don't see an easy path to compete with a similar game to the ESPNs of the world, valid point. The key is to find a fantasy sports game that would be attractive to players that the ESPNs of the world can't emulate. Does such a fantasy sports game of that nature exist? Yes. We will discuss that later. Not having a compelling game to draw patrons that would provide sufficient direct and indirect revenue to offset the cost of offering is a very valid point. In my view, none of the existing fantasy games that have been considered have the hope of meeting that hurdle.
The reason for that varies on the type of game. For the league-based season-long contests, the contests are just too long and the casinos rightly have figured out that they may be able to draw customers a few times during the year, but not on a weekly basis for an extended period. For the short-term contests, the prize structures are such that the gross margins of these games are just too thin to satisfy the profit needs of the game operator and the casino.
Regarding the reason that the casinos aren't offering the games because this is summertime and there's no interest in sports contests for money is a crock. Fantasy baseball is going on now and it is indeed quite popular and indeed people are playing for money.
So what kind of fantasy sports contest would have a hope of being viable for Atlantic City casinos? Again, it would have to be something that would be attractive to fantasy sports players and perhaps even sports bettors (even though sports betting is not yet legal in New Jersey). By attractive, that means a game that has a good prize to entry fee ratio (odds if we were talking about betting). Also, attractive means that the margin of the games would be sufficient to satisfy the needs of the game operator and the casino with regard to profit. No sense offering a game that costs more to offer than revenue generated, right? The final nuance of attractive would be a fantasy game that offered some level of exclusivity, something the current large fantasy sports operators can't match.
Is there such a fantasy sport game available that can do this? Yes. YouGaming's pari-mutuel fantasy sports game is such a game. Here's why:
First, the pari-mutuel fantasy sports game concept is protected by no less than 3 US Patents. That takes care of the exclusivity element.
Second, the games can have gross margins that will satisfy the profit needs of the casinos and game operator. For typical "daily" fantasy sports games, gross margins may vary from 5% to 10%. Given the costs of operation, it will be practically impossible to have profitable games. The pari-mutuel fantasy sports games can easily have gross margins in the 20% to 30% range, and can be offered in the "daily" format. Now if you compare that to the theoretical margin on a straight sports bet, which is 4.54%, this advantage is substantial.
Third, the pari-mutuel fantasy sports games can also offer games with high gross margins while offering superior prize to entry fee ratios (odds if we were talking betting), allowing the game operator and casino to meet their profit objectives.
So given a game where one out of every five entries can win a prize, where the top prize is 100 times the entry fee, the gross margin of such a game is greater than 20%, and having a level of exclusivity for the casino(s) that offer it, one can see that this kind of game would have a level of attractiveness to Atlantic City properties.
Also, this kind of game would be attractive to offer in an online format to the casino(s)' customers. Unlike some of the free play casino games used as a marketing tool, this game format can be offered online in a pay-to-play format, generating revenue and awarding cash prizes. This offering of course done in a branded format. The casino will be able to extend its brick and mortar presence with a revenue-generating game.
There is another potential advantage to such a game, but it will have to wait until New Jersey is officially allowed to offer sports wagering. Such a game can also be offered in a wagering game format, which current fantasy sports games will have great difficulty doing, and even if they did, would not result in a superior wagering game to conventional sports betting.
I'll quibble with both of these reasons, but first I do need to quibble with the article ever equating the concept of fantasy sports contests and betting. Playing fantasy sports games is not betting. Fantasy sports games are a game of skill and by legal definition not gambling, provided the games, gameplay and prize structures fit within the statutory safe harbors. It is just journalistic laziness to refer to such contests as betting.
With regard to the reason that the casinos don't see an easy path to compete with a similar game to the ESPNs of the world, valid point. The key is to find a fantasy sports game that would be attractive to players that the ESPNs of the world can't emulate. Does such a fantasy sports game of that nature exist? Yes. We will discuss that later. Not having a compelling game to draw patrons that would provide sufficient direct and indirect revenue to offset the cost of offering is a very valid point. In my view, none of the existing fantasy games that have been considered have the hope of meeting that hurdle.
The reason for that varies on the type of game. For the league-based season-long contests, the contests are just too long and the casinos rightly have figured out that they may be able to draw customers a few times during the year, but not on a weekly basis for an extended period. For the short-term contests, the prize structures are such that the gross margins of these games are just too thin to satisfy the profit needs of the game operator and the casino.
Regarding the reason that the casinos aren't offering the games because this is summertime and there's no interest in sports contests for money is a crock. Fantasy baseball is going on now and it is indeed quite popular and indeed people are playing for money.
So what kind of fantasy sports contest would have a hope of being viable for Atlantic City casinos? Again, it would have to be something that would be attractive to fantasy sports players and perhaps even sports bettors (even though sports betting is not yet legal in New Jersey). By attractive, that means a game that has a good prize to entry fee ratio (odds if we were talking about betting). Also, attractive means that the margin of the games would be sufficient to satisfy the needs of the game operator and the casino with regard to profit. No sense offering a game that costs more to offer than revenue generated, right? The final nuance of attractive would be a fantasy game that offered some level of exclusivity, something the current large fantasy sports operators can't match.
Is there such a fantasy sport game available that can do this? Yes. YouGaming's pari-mutuel fantasy sports game is such a game. Here's why:
First, the pari-mutuel fantasy sports game concept is protected by no less than 3 US Patents. That takes care of the exclusivity element.
Second, the games can have gross margins that will satisfy the profit needs of the casinos and game operator. For typical "daily" fantasy sports games, gross margins may vary from 5% to 10%. Given the costs of operation, it will be practically impossible to have profitable games. The pari-mutuel fantasy sports games can easily have gross margins in the 20% to 30% range, and can be offered in the "daily" format. Now if you compare that to the theoretical margin on a straight sports bet, which is 4.54%, this advantage is substantial.
Third, the pari-mutuel fantasy sports games can also offer games with high gross margins while offering superior prize to entry fee ratios (odds if we were talking betting), allowing the game operator and casino to meet their profit objectives.
So given a game where one out of every five entries can win a prize, where the top prize is 100 times the entry fee, the gross margin of such a game is greater than 20%, and having a level of exclusivity for the casino(s) that offer it, one can see that this kind of game would have a level of attractiveness to Atlantic City properties.
Also, this kind of game would be attractive to offer in an online format to the casino(s)' customers. Unlike some of the free play casino games used as a marketing tool, this game format can be offered online in a pay-to-play format, generating revenue and awarding cash prizes. This offering of course done in a branded format. The casino will be able to extend its brick and mortar presence with a revenue-generating game.
There is another potential advantage to such a game, but it will have to wait until New Jersey is officially allowed to offer sports wagering. Such a game can also be offered in a wagering game format, which current fantasy sports games will have great difficulty doing, and even if they did, would not result in a superior wagering game to conventional sports betting.
Tuesday, August 13, 2013
Gambling Superstitions
Gambling, like sports, easily is compatible with superstitious activity. Certain outfits, such as a "lucky hat," are required before a person heads to the casino, racetrack or sports arena. But in terms of gambling play, many other superstitions can be seen. We're not even delving here into betting systems or schemes.
What superstitions have you run into? Feel free, if desired, to add them to the discussion by commenting.
Here are some:
For slot play:
What superstitions have you run into? Feel free, if desired, to add them to the discussion by commenting.
Here are some:
For slot play:
- press the spin reels button as quickly as possible
- count to 3 (or 7) after the previous result before pressing the spin reels button
- only use your right hand to play the machine (even including inserting money/tickets)
- scratch off the tickets in a straight-line fashion like tic-tac-toe (Tic-Tac-Toe gets me the dough)
- scratch off the tickets slowly (slow and win, fast and lose)
- Cutting the cards "thin to win"
- Tapping the dice on the felt before shooting
- Setting the dice with the desired roll before shooting
Saturday, September 8, 2012
US Horse Racing Economic Improvement 2012 vs 2011?
The Paulick Report published some year over year comparisons of US racing handle, purses and race days. The story can be found at this link. The story compares August 2012 to August 2011 as well as year to date 2012 vs year to date 2011. All metrics show gains. But is it all good news? No.
Here's why. Although a comparison on a monthly basis has value, the timeframe is too short to get a good feel for any trends, positive or negative. Even publicly traded corporations tend to focus on annual and quarterly comparisons. We can do that here by looking at the year to date 2012 vs 2011 numbers.
2012 vs 2011:
All Sources Wagering - +2.29%
US Purses - +8.39%
US Race Days - +1.81%
OK, so all positive, right? Indeed. But remember we need to take inflation into account. Let's do that so we can figure out if in constant dollars, wagering is increasing. Why is that important? Well, wagering is the revenue that customers (horseplayers) bring to the business. No wagering, no need for racing...
What is inflation so far this year? 2.23% You can see historical inflation data here. So, in constant dollar terms, wagering has stayed flat. So, is this really bad news? From 2003 to 2011, real handle has dropped 37% according to a McKinsey study published last year. Flat handle actually can be considered good news. Let's agree to that for now.
The question is at what price do we purchase that wagering handle? You do that via purses and race days. Taking inflation into account, purses increased just over 6% in real terms year over year. Race days (with their overhead) also increased by 65. So it took the industry an additional 65 race days of overhead as well as 6% greater cost in terms of purses ($57,852,060) to keep wagering revenue flat. In terms of overall industry profit, it appears that the US racing industry actually is LESS PROFITABLE than it was for the same period last year as it cost more money to generate essentially the same amount of sales (wagers).
Here's why. Although a comparison on a monthly basis has value, the timeframe is too short to get a good feel for any trends, positive or negative. Even publicly traded corporations tend to focus on annual and quarterly comparisons. We can do that here by looking at the year to date 2012 vs 2011 numbers.
2012 vs 2011:
All Sources Wagering - +2.29%
US Purses - +8.39%
US Race Days - +1.81%
OK, so all positive, right? Indeed. But remember we need to take inflation into account. Let's do that so we can figure out if in constant dollars, wagering is increasing. Why is that important? Well, wagering is the revenue that customers (horseplayers) bring to the business. No wagering, no need for racing...
What is inflation so far this year? 2.23% You can see historical inflation data here. So, in constant dollar terms, wagering has stayed flat. So, is this really bad news? From 2003 to 2011, real handle has dropped 37% according to a McKinsey study published last year. Flat handle actually can be considered good news. Let's agree to that for now.
The question is at what price do we purchase that wagering handle? You do that via purses and race days. Taking inflation into account, purses increased just over 6% in real terms year over year. Race days (with their overhead) also increased by 65. So it took the industry an additional 65 race days of overhead as well as 6% greater cost in terms of purses ($57,852,060) to keep wagering revenue flat. In terms of overall industry profit, it appears that the US racing industry actually is LESS PROFITABLE than it was for the same period last year as it cost more money to generate essentially the same amount of sales (wagers).
Saturday, June 2, 2012
NFL Betting Season Has Arrived
Cantor Gaming, a leading sports wagering bookmaker, has published initial over/under lines for regular season NFL wins for each team. They vary from 12 wins for the Packers and Patriots to 5 1/2 for the Browns, Colts and Jaguars. You can see the initial lines at this link from Yahoo.
It might be a bit too early to make any selections at this point as the initial mini-camps are just finishing up, with regular training camp and preseason activity not starting in earnest until early July. However, if you feel that no way that the Colts will win more than 5 games this year, go ahead, get to Vegas and put down $135 for a chance to win $100!
It might be a bit too early to make any selections at this point as the initial mini-camps are just finishing up, with regular training camp and preseason activity not starting in earnest until early July. However, if you feel that no way that the Colts will win more than 5 games this year, go ahead, get to Vegas and put down $135 for a chance to win $100!
Tuesday, March 6, 2012
Game Flow Concept Applicable to Fantasy Sports Contests?
Jeff Jordan in a May 2011 article in Casino Enterprise Management discussed a concept he called "game flow" to highlight a new way of evaluating slot machine performance. In a nutshell, game flow is a zone of optimal balance between challenge and skill. Now skill in a slot machine context is more akin to figuring out all the bells, whistles, spinny things, bonus games and payouts as opposed to really figuring out how to improve your performance playing a game. Slot machines by their nature really don't have a link that correlates to a player's skill, unless you think putting a $20 bill in a money acceptor is a skill.
What is a good zone or flow for one person will deviate between people. Jordan states, "Flow is designed for purposes of this framework as the mental state in which a player is absorbed in a feeling of energized focus, full involvement and sensation in the play characteristics of the game." [1] So it is a bit like Goldilocks - it's just right. But each person has their own Goldilocks standard.
Taking Jordan's flow concept, can it apply to fantasy sports contests? To an extent. Typically fantasy sports contests take much longer than a particular pull of a slot machine handle (nowadays a press of a button), or even a slot machine gaming session. But the breakdown of the consumer's behavior is applicable. Jordan teaches four basic elements:
As fantasy sports games branch out into more frequent games, even daily in some cases, the concept of game flow will become more important to consider.
The online version of Jeff Jordan's article can be found here.
Citations:
[1] Jordan, J. (2011, May), Leveraging a Game Flow Framework to Evaluate Game Performance, Part 1, Casino Enterprise Management, 61.
References:
Jordan, J. (2011, May), Leveraging a Game Flow Framework to Evaluate Game Performance, Part 1, Casino Enterprise Management, 60-61.
What is a good zone or flow for one person will deviate between people. Jordan states, "Flow is designed for purposes of this framework as the mental state in which a player is absorbed in a feeling of energized focus, full involvement and sensation in the play characteristics of the game." [1] So it is a bit like Goldilocks - it's just right. But each person has their own Goldilocks standard.
Taking Jordan's flow concept, can it apply to fantasy sports contests? To an extent. Typically fantasy sports contests take much longer than a particular pull of a slot machine handle (nowadays a press of a button), or even a slot machine gaming session. But the breakdown of the consumer's behavior is applicable. Jordan teaches four basic elements:
- Game appeal
- Trial wagers
- Game flow
- Game loyalty
As fantasy sports games branch out into more frequent games, even daily in some cases, the concept of game flow will become more important to consider.
The online version of Jeff Jordan's article can be found here.
Citations:
[1] Jordan, J. (2011, May), Leveraging a Game Flow Framework to Evaluate Game Performance, Part 1, Casino Enterprise Management, 61.
References:
Jordan, J. (2011, May), Leveraging a Game Flow Framework to Evaluate Game Performance, Part 1, Casino Enterprise Management, 60-61.
Sunday, February 6, 2011
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?
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?
Wednesday, March 17, 2010
Possible NCAA Tournament Betting Values!
It's March Madness time again! The NCAA men's basketball tournament draws betting action almost on a par with the Super Bowl. MySportsBook.com has posted the odds for the various teams to win the tournament. The odds vary from 2-1 for Kansas to 500-1 for Utah State.
Like last year, I calculated the average odds per seed level. This year, all the 14th through 16th seeds are combined as a field entry, with a payout of 50-1. You may think that is a great deal. If you do, maybe you could send me your money and perhaps I could pay 60-1, LOL. In other words, there are only two chances a 14th seed or worse will win the NCAA tournament - fat and slim. The 13th seeds had two teams with posted odds and two teams in the field category, so their average odds are lower than you would expect. No matter. 13th seeds aren't likely to win the NCAA tournament either.
Here are the average odds per seed level:
1 - 4.75
2 - 15
3 - 43.75
4 - 53.75
5 - 76.25
6 - 83.75
7 - 175
8 - 175
9 - 175
10 - 175
11 - 250
12 - 287.5
13 - 175
14 - 50
15 - 50
16 - 50
I looked for teams at a particular seed level that had posted odds 50% higher than the seed average. I found a few, mostly in the South bracket:
1 - Duke 8-1
7 - Richmond 300-1
8 - UNLV 300-1 (Go Rebels!)
10 - St. Marys (CA) 300-1
12 - Utah State 500-1
13 - Siena 300-1
13 - Murray St. 300-1
What I am going to do is make some hypothetical bets. I'll wager $100 that Duke wins the tournament and $50 each that the other teams each win their first game, with the exception of St. Marys. This is due to the fact that Richmond plays St. Marys in the first round. Since Richmond is a 7 seed, I'll go with Richmond. Are these good bets? Who knows but we'll see if the higher odds are an accurate portrayal of team strength, or reflect more of a bettor bias toward some teams with better name recognition. Duke has a great program, but I believe they are viewed weaker this year than Kansas, Kentucky and Syracuse. However, it could be that Duke may have the easiest path to the Final Four.
Like last year, I calculated the average odds per seed level. This year, all the 14th through 16th seeds are combined as a field entry, with a payout of 50-1. You may think that is a great deal. If you do, maybe you could send me your money and perhaps I could pay 60-1, LOL. In other words, there are only two chances a 14th seed or worse will win the NCAA tournament - fat and slim. The 13th seeds had two teams with posted odds and two teams in the field category, so their average odds are lower than you would expect. No matter. 13th seeds aren't likely to win the NCAA tournament either.
Here are the average odds per seed level:
1 - 4.75
2 - 15
3 - 43.75
4 - 53.75
5 - 76.25
6 - 83.75
7 - 175
8 - 175
9 - 175
10 - 175
11 - 250
12 - 287.5
13 - 175
14 - 50
15 - 50
16 - 50
I looked for teams at a particular seed level that had posted odds 50% higher than the seed average. I found a few, mostly in the South bracket:
1 - Duke 8-1
7 - Richmond 300-1
8 - UNLV 300-1 (Go Rebels!)
10 - St. Marys (CA) 300-1
12 - Utah State 500-1
13 - Siena 300-1
13 - Murray St. 300-1
What I am going to do is make some hypothetical bets. I'll wager $100 that Duke wins the tournament and $50 each that the other teams each win their first game, with the exception of St. Marys. This is due to the fact that Richmond plays St. Marys in the first round. Since Richmond is a 7 seed, I'll go with Richmond. Are these good bets? Who knows but we'll see if the higher odds are an accurate portrayal of team strength, or reflect more of a bettor bias toward some teams with better name recognition. Duke has a great program, but I believe they are viewed weaker this year than Kansas, Kentucky and Syracuse. However, it could be that Duke may have the easiest path to the Final Four.
Friday, October 30, 2009
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.
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.
Thursday, August 20, 2009
Early 2010 Super Bowl Odds Posted
For those of you looking for pre-season guesses as to who will win Super Bowl XLIV in January 2010, SBR Global Sportsbook has posted early odds. They are:
Arizona 30/1
Atlanta 23/1
Baltimore 23/1
Buffalo 50/1
Carolina 23/1
Chicago 18/1
Cincinnati 63/1
Cleveland 75/1
Dallas 18/1
Denver 63/1
Detroit 150/1
Green Bay 30/1
Houston 40/1
Indianapolis 12/1
Jacksonville 40/1
Kansas City 63/1
Miami 50/1
Minnesota 14/1 (before Brett Favre's addition)
New England 4.5/1
New Orleans 18/1
New York (N) 11/1
New York (A) 40/1
Oakland 80/1
Philadelphia 10/1 (before Michael Vick's addition)
Pittsburgh 8.5/1
San Diego 8.5/1
San Francisco 63/1
Seattle 50/1
St. Louis 100/1
Tampa Bay 41/1
Tennessee 18/1
Washington 40/1
New England, Pittsburgh and San Diego are the early favorites, which make sense since Tom Brady is back for New England, Pittsburgh is the defending champion and LT and Shawne Merriman are back for San Diego. To me, Green Bay at 30/1 and Arizona at 30/1 seem like good bangs for the buck, but the oddsmakers aren't dumb.
The odds on both Minnesota and Philadelphia are likely to drop with the adds of Brett Favre and Michael Vick (aka Ron Mexico), respectively. Given that Detroit didn't win a game last year, I'm not so sure that 150/1 odds are high enough...perhaps 1000/1?
Arizona 30/1
Atlanta 23/1
Baltimore 23/1
Buffalo 50/1
Carolina 23/1
Chicago 18/1
Cincinnati 63/1
Cleveland 75/1
Dallas 18/1
Denver 63/1
Detroit 150/1
Green Bay 30/1
Houston 40/1
Indianapolis 12/1
Jacksonville 40/1
Kansas City 63/1
Miami 50/1
Minnesota 14/1 (before Brett Favre's addition)
New England 4.5/1
New Orleans 18/1
New York (N) 11/1
New York (A) 40/1
Oakland 80/1
Philadelphia 10/1 (before Michael Vick's addition)
Pittsburgh 8.5/1
San Diego 8.5/1
San Francisco 63/1
Seattle 50/1
St. Louis 100/1
Tampa Bay 41/1
Tennessee 18/1
Washington 40/1
New England, Pittsburgh and San Diego are the early favorites, which make sense since Tom Brady is back for New England, Pittsburgh is the defending champion and LT and Shawne Merriman are back for San Diego. To me, Green Bay at 30/1 and Arizona at 30/1 seem like good bangs for the buck, but the oddsmakers aren't dumb.
The odds on both Minnesota and Philadelphia are likely to drop with the adds of Brett Favre and Michael Vick (aka Ron Mexico), respectively. Given that Detroit didn't win a game last year, I'm not so sure that 150/1 odds are high enough...perhaps 1000/1?
Friday, July 3, 2009
Losing Money at Montana Sports Action? Can You File a Lawsuit to Get Your Money Back?
The Montana Lottery and the Montana Board of Horse Racing have been fighting off questions and complaints about the new sports wagering game, Montana Sports Action, for almost a year - even before the game was commercially launched. In 2007, Montana passed a law legalizing pari-mutuel wagering on fantasy sports in an attempt to help put more funds into the declining Montana horse racing industry. There are related posts regarding Montana Sports action in this blog, with the three most recent being found here, here and here.
One of the key issues that is brought up against the Lottery running this game, in addition to the pathetically poor revenue, is the issue of the legal authority the Lottery has to run a game of this nature. Montana law is that gambling is prohibited unless specifically authorized. Article III, Section 9 of the Montana constitution states:
Section 9. Gambling. All forms of gambling, lotteries, and gift enterprises are prohibited unless authorized by acts of the legislature or by the people through initiative or referendum.
Following the constitution, Montana code Title 23-5-151 states:
23-5-151. Gambling prohibited. Except as specifically authorized by statute, all forms of public gambling, lotteries, and gift enterprises are prohibited; and,
23-5-111. Construction and application. In view of Article III, section 9, of the Montana constitution, parts 1 through 8 of this chapter must be strictly construed by the department and the courts to allow only those types of gambling and gambling activity that are specifically and clearly allowed by those parts.
Now a lottery is authorized, but only under certain parameters. Montana code Title 23-7-102 states:
23-7-102. Purpose.
(1) The purpose of this chapter is to allow lottery games in which the player purchases from the state, through the administrators of the state lottery, a chance to win a prize. This chapter does not allow and may not be construed to allow any game in which a player competes against or plays with any other person, including a person employed by an establishment in which a lottery game may be played.
(2) The administration and construction of this chapter must comply with Article III, section 9, of the Montana constitution, which mandates that all forms of gambling are prohibited unless authorized by acts of the legislature or by the people through initiative or referendum. Therefore, this chapter must be strictly construed to allow only those games that are within the scope of this section and within the definition of "lottery game".
(3) The state lottery may not:
(a) operate a slot machine or carry on any form of gambling prohibited by the laws of this state; or
(b) carry on any form of gambling permitted by the laws of this state but which is not a lottery game within the scope of this section and within the definition of "lottery game".
The Lottery Commission has restrictions on what games it can operate. Montana code Title 23-7-302 states, in part:
23-7-202. Powers and duties of commission. The commission shall:
(1) establish and operate a state lottery and may not become involved in any other gambling or gaming.
So, what's a "lottery game?" Remember Montana authorized a lottery in 1985, so the concept of a lottery at the time was a game such that each entry had the same chance of winning as any other entry, where the winner was determined at random. No skill is involved - a game of chance.
Montana code Title 23-7-103 states, in part:
23-7-103. Definitions. As used in this chapter, the following definitions apply:
(4) (a) "Lottery game" means any procedure, including any online or other procedure using a machine or electronic device, by which one or more prizes are distributed among persons who have paid for a chance to win a prize and includes but is not limited to weekly (or other, longer time period) winner games, instant winner games, daily numbers games, and sports pool games.
It may be problematic for the Lottery Commission to claim that fantasy sports wagering doesn't fall into the "any other gambling or gaming" category. Or does it? Doesn't the law allow sports pool games? Wouldn't Montana Sports Action fit into this category? Assuming yes, then why does the Lottery claim to be running the game in accordance with the pari-mutuel fantasy sports wagering law passed for the benefit of the Board of Horse Racing? That law specifically is not designed to be a game of chance, but of skill. Besides, as stated during a legislative hearing, if the Legislature intended for the Lottery to run this game, they would have made that clear.
OK, so then let's take another viewpoint and state that the Lottery is merely donating money to the Board of Horse Racing and is actually operating a sports pool. Will that excuse fly? Maybe not. If you look at sports pools in Montana and how they operate, they appear to be different from how Montana Sports Action operates.
Here are pertinent excerpts from the Montana code regarding sports pools:
23-5-501. Definitions. As used in this part, unless the context clearly requires otherwise, the following definitions apply:
(1) "Sports pool" means a gambling activity, other than an activity governed under chapter 4 or chapter 5, part 2, of this title, in which a person wagers money for each chance to win money or other items of value based on the outcome of a sports event or series of sports events wherein the competitors in the sports event or series of sports events are natural persons or animals; and,
23-5-503. Rules.
(3) (a) Except as provided in subsection (3)(b), the winners of any sports pool must receive a 100% payout of the value of the sports pool. The winner of a sports tab game must receive at least 90% of the total cost of the 100 sports tabs. The operator of the sports tab game may retain the remaining money for administration and other expenses.
(b) A nonprofit organization that maintains records and opens the records to inspection upon reasonable demand to verify that the retained portion is used to support charitable activities, scholarships or educational grants, or community service projects may retain up to 50% of the value of a sports pool or sports tab game; and,
23-5-512. Sports pool design -- department rules.
(1) A sports pool must be designed to ensure that:
(a) there is at least one winner from among the participants in the pool; and
(b) each participant has an equal chance to win the pool.
(2) Competitors in a sports event or series of sports events must be randomly assigned to each participant in the sports pool.
So, for a sports pool, outcomes of sporting events are the basis of the game, 100% of the proceeds are paid out in prizes (except if run by non-profits), each participant has an equal chance to win the pool and competitors in the event(s) must be randomly assigned to each participant. This isn't at all like Montana Sports Action. I think that it would be difficult to prove that Montana Sports Action is a sports pool game envisioned by the language that authorizes what games the Montana Lottery can operate.
If Montana Sports Action falls outside those boundaries, then the Lottery could be considered to be offering a game outside its charter and the Lottery Commission could be considered to being involved with another gambling game in violation of its powers and duties. This might be construed to find that the Montana Lottery is operating an illegal gambling game. Not that another party could operate the same game legally, but the Lottery has certain restrictions, which according to Montana law, must be STRICTLY construed.
What does all this have to do with anything, you may ask? Maybe plenty, if you have bet money on Montana Sports Action and lost, or you are an attorney with some time on your hands. If the Lottery is not specifically allowed by statute to operate Montana Sports Action, it might be considered to be an illegal gambling enterprise, even if it is a state agency.
Montana code Title 23-5-112 states, in part:
23-5-112. Definitions. Unless the context requires otherwise, the following definitions apply to parts 1 through 8 of this chapter:
(18) "Illegal gambling enterprise" means a gambling enterprise that violates or is not specifically authorized by a statute or a rule of the department.
Here's where it gets interesting to the losing bettor or attorney with time on their hands. Montana code Title 23-5-121 states:
23-5-131. Losses at illegal gambling may be recovered in civil action. A person, or his dependent or guardian, who, by playing or betting at an illegal gambling device or illegal gambling enterprise, loses money, property, or any other thing of value and pays and delivers it to another person connected with the operation or conduct of the illegal gambling device or illegal gambling enterprise, within 1 year following his loss, may:
(1) bring a civil action in a court of competent jurisdiction to recover the loss;
(2) recover the costs of the civil action and exemplary damages of no less than $500 and no more than $5,000; and
(3) join as a defendant any person having an interest in the illegal gambling device or illegal gambling enterprise.
To date, approximately $150,000 has been wagered on Montana Sports Action games. Not a lot, but in this economy, if you've spent some money and lost on this, maybe you might want your money back? If you were an attorney and could say the phrase "class action," maybe 1/3 of $150,000, or $50,000 is a nice payday? With the size and scope of the entities involved in offering Montana Sports Action, perhaps it might be viewed as a "target-rich environment" to an attorney?
Not that I foresee any lawsuits being filed along these lines anytime soon, but who knows? If it did occur, it would definitely stir up the government types and bring even more negative publicity to something that had the promise of helping the horse racing industry in Montana, but appears to be failing in that promise.
One of the key issues that is brought up against the Lottery running this game, in addition to the pathetically poor revenue, is the issue of the legal authority the Lottery has to run a game of this nature. Montana law is that gambling is prohibited unless specifically authorized. Article III, Section 9 of the Montana constitution states:
Section 9. Gambling. All forms of gambling, lotteries, and gift enterprises are prohibited unless authorized by acts of the legislature or by the people through initiative or referendum.
Following the constitution, Montana code Title 23-5-151 states:
23-5-151. Gambling prohibited. Except as specifically authorized by statute, all forms of public gambling, lotteries, and gift enterprises are prohibited; and,
23-5-111. Construction and application. In view of Article III, section 9, of the Montana constitution, parts 1 through 8 of this chapter must be strictly construed by the department and the courts to allow only those types of gambling and gambling activity that are specifically and clearly allowed by those parts.
Now a lottery is authorized, but only under certain parameters. Montana code Title 23-7-102 states:
23-7-102. Purpose.
(1) The purpose of this chapter is to allow lottery games in which the player purchases from the state, through the administrators of the state lottery, a chance to win a prize. This chapter does not allow and may not be construed to allow any game in which a player competes against or plays with any other person, including a person employed by an establishment in which a lottery game may be played.
(2) The administration and construction of this chapter must comply with Article III, section 9, of the Montana constitution, which mandates that all forms of gambling are prohibited unless authorized by acts of the legislature or by the people through initiative or referendum. Therefore, this chapter must be strictly construed to allow only those games that are within the scope of this section and within the definition of "lottery game".
(3) The state lottery may not:
(a) operate a slot machine or carry on any form of gambling prohibited by the laws of this state; or
(b) carry on any form of gambling permitted by the laws of this state but which is not a lottery game within the scope of this section and within the definition of "lottery game".
The Lottery Commission has restrictions on what games it can operate. Montana code Title 23-7-302 states, in part:
23-7-202. Powers and duties of commission. The commission shall:
(1) establish and operate a state lottery and may not become involved in any other gambling or gaming.
So, what's a "lottery game?" Remember Montana authorized a lottery in 1985, so the concept of a lottery at the time was a game such that each entry had the same chance of winning as any other entry, where the winner was determined at random. No skill is involved - a game of chance.
Montana code Title 23-7-103 states, in part:
23-7-103. Definitions. As used in this chapter, the following definitions apply:
(4) (a) "Lottery game" means any procedure, including any online or other procedure using a machine or electronic device, by which one or more prizes are distributed among persons who have paid for a chance to win a prize and includes but is not limited to weekly (or other, longer time period) winner games, instant winner games, daily numbers games, and sports pool games.
It may be problematic for the Lottery Commission to claim that fantasy sports wagering doesn't fall into the "any other gambling or gaming" category. Or does it? Doesn't the law allow sports pool games? Wouldn't Montana Sports Action fit into this category? Assuming yes, then why does the Lottery claim to be running the game in accordance with the pari-mutuel fantasy sports wagering law passed for the benefit of the Board of Horse Racing? That law specifically is not designed to be a game of chance, but of skill. Besides, as stated during a legislative hearing, if the Legislature intended for the Lottery to run this game, they would have made that clear.
OK, so then let's take another viewpoint and state that the Lottery is merely donating money to the Board of Horse Racing and is actually operating a sports pool. Will that excuse fly? Maybe not. If you look at sports pools in Montana and how they operate, they appear to be different from how Montana Sports Action operates.
Here are pertinent excerpts from the Montana code regarding sports pools:
23-5-501. Definitions. As used in this part, unless the context clearly requires otherwise, the following definitions apply:
(1) "Sports pool" means a gambling activity, other than an activity governed under chapter 4 or chapter 5, part 2, of this title, in which a person wagers money for each chance to win money or other items of value based on the outcome of a sports event or series of sports events wherein the competitors in the sports event or series of sports events are natural persons or animals; and,
23-5-503. Rules.
(3) (a) Except as provided in subsection (3)(b), the winners of any sports pool must receive a 100% payout of the value of the sports pool. The winner of a sports tab game must receive at least 90% of the total cost of the 100 sports tabs. The operator of the sports tab game may retain the remaining money for administration and other expenses.
(b) A nonprofit organization that maintains records and opens the records to inspection upon reasonable demand to verify that the retained portion is used to support charitable activities, scholarships or educational grants, or community service projects may retain up to 50% of the value of a sports pool or sports tab game; and,
23-5-512. Sports pool design -- department rules.
(1) A sports pool must be designed to ensure that:
(a) there is at least one winner from among the participants in the pool; and
(b) each participant has an equal chance to win the pool.
(2) Competitors in a sports event or series of sports events must be randomly assigned to each participant in the sports pool.
So, for a sports pool, outcomes of sporting events are the basis of the game, 100% of the proceeds are paid out in prizes (except if run by non-profits), each participant has an equal chance to win the pool and competitors in the event(s) must be randomly assigned to each participant. This isn't at all like Montana Sports Action. I think that it would be difficult to prove that Montana Sports Action is a sports pool game envisioned by the language that authorizes what games the Montana Lottery can operate.
If Montana Sports Action falls outside those boundaries, then the Lottery could be considered to be offering a game outside its charter and the Lottery Commission could be considered to being involved with another gambling game in violation of its powers and duties. This might be construed to find that the Montana Lottery is operating an illegal gambling game. Not that another party could operate the same game legally, but the Lottery has certain restrictions, which according to Montana law, must be STRICTLY construed.
What does all this have to do with anything, you may ask? Maybe plenty, if you have bet money on Montana Sports Action and lost, or you are an attorney with some time on your hands. If the Lottery is not specifically allowed by statute to operate Montana Sports Action, it might be considered to be an illegal gambling enterprise, even if it is a state agency.
Montana code Title 23-5-112 states, in part:
23-5-112. Definitions. Unless the context requires otherwise, the following definitions apply to parts 1 through 8 of this chapter:
(18) "Illegal gambling enterprise" means a gambling enterprise that violates or is not specifically authorized by a statute or a rule of the department.
Here's where it gets interesting to the losing bettor or attorney with time on their hands. Montana code Title 23-5-121 states:
23-5-131. Losses at illegal gambling may be recovered in civil action. A person, or his dependent or guardian, who, by playing or betting at an illegal gambling device or illegal gambling enterprise, loses money, property, or any other thing of value and pays and delivers it to another person connected with the operation or conduct of the illegal gambling device or illegal gambling enterprise, within 1 year following his loss, may:
(1) bring a civil action in a court of competent jurisdiction to recover the loss;
(2) recover the costs of the civil action and exemplary damages of no less than $500 and no more than $5,000; and
(3) join as a defendant any person having an interest in the illegal gambling device or illegal gambling enterprise.
To date, approximately $150,000 has been wagered on Montana Sports Action games. Not a lot, but in this economy, if you've spent some money and lost on this, maybe you might want your money back? If you were an attorney and could say the phrase "class action," maybe 1/3 of $150,000, or $50,000 is a nice payday? With the size and scope of the entities involved in offering Montana Sports Action, perhaps it might be viewed as a "target-rich environment" to an attorney?
Not that I foresee any lawsuits being filed along these lines anytime soon, but who knows? If it did occur, it would definitely stir up the government types and bring even more negative publicity to something that had the promise of helping the horse racing industry in Montana, but appears to be failing in that promise.
Saturday, June 6, 2009
NCAA Not Happy With Montana Sports Wagering?
The NCAA is examining sports gambling in Montana to determine if the NCAA should adopt a policy that would ban any post-season or championship play within the state. A Montana TV station's recent article describes the issue, and the reaction by the locals.
According to the article, the NCAA policy is:
"No session of an NCAA championship may be conducted in a metropolitan area with legal wagering that is based upon the outcome of any event (i.e., high school, college or professional) in a sport in which the NCAA conducts a championship."
I suppose the easiest response from Montana is that since the population of the entire state is approximately 1 million, the concept of metropolitan area doesn't apply since there aren't any. Therefore, Montana isn't in violation of the policy. However, if you define the population small enough, any town can be considered a metro area. According to Census data, there are only 3 cities in the state with populations over 50,000, with the largest, Billings, barely topping 100,000. Compare that to India, where they cite the minimum population to be considered a metropolitan area to be 4 million.
Montana got ratted out when NCAA threatened similar action if Delaware approved sports wagering. According to an ESPN article, a NCAA spokesman stated that the University of Montana should not have been allowed to host playoff games last season due to an "administrative oversight." That is possible since the sports betting game in question, Montana Sports Action, was inaugurated in the fall of 2008. For those interested in Montana Sports Action, you can review several posts in this blog on that game.
What is a bit puzzling is how long it takes the NCAA to recognize administrative oversights. For example, how could the NCAA miss a bowl game that is played in Nevada, a state that until recently had a de facto monopoly on legal sports wagering? Perhaps the name of the bowl game was vague and NCAA officials never attended a game in person? How could the NCAA miss a bowl game called the Las Vegas Bowl, played in Las Vegas at the football stadium of the University of Nevada, Las Vegas? Perhaps the NCAA doesn't consider Las Vegas to be a metropolitan area or maybe that the NCAA doesn't know that legal sports betting occurs in Nevada? Of course, sports betting in Nevada has only been around since the 1940s, so perhaps it's too recent of an event for the NCAA to be aware.
Actually the policy is targeted at championship play, rather than general post-season play, so certain bowl games could get a pass. However, how can the NCAA be ignorant of the Western Athletic Conference routinely hosting championship play in Nevada? Approximately in the last year, women's soccer, basketball and golf all had their championships hosted in Nevada. Given the NCAA policy, maybe you can excuse soccer, but does Nevada allow bets on golf and basketball? I think yes.
If wagering on outcomes is the issue, Montana has a good story, whereas Delaware and Nevada do not. Fantasy sports, depending on the scoring methodology, generally is not tied to the outcome of an actual game.
Montana likely walks on this but the NCAA will go through the motions (but perhaps with a warning not to expand sports gambling to include betting on games). If the NCAA does place a ban on Delaware, they may have to do the same to Nevada. My guess is that they will let all of this go away and pretend it doesn't exist.
According to the article, the NCAA policy is:
"No session of an NCAA championship may be conducted in a metropolitan area with legal wagering that is based upon the outcome of any event (i.e., high school, college or professional) in a sport in which the NCAA conducts a championship."
I suppose the easiest response from Montana is that since the population of the entire state is approximately 1 million, the concept of metropolitan area doesn't apply since there aren't any. Therefore, Montana isn't in violation of the policy. However, if you define the population small enough, any town can be considered a metro area. According to Census data, there are only 3 cities in the state with populations over 50,000, with the largest, Billings, barely topping 100,000. Compare that to India, where they cite the minimum population to be considered a metropolitan area to be 4 million.
Montana got ratted out when NCAA threatened similar action if Delaware approved sports wagering. According to an ESPN article, a NCAA spokesman stated that the University of Montana should not have been allowed to host playoff games last season due to an "administrative oversight." That is possible since the sports betting game in question, Montana Sports Action, was inaugurated in the fall of 2008. For those interested in Montana Sports Action, you can review several posts in this blog on that game.
What is a bit puzzling is how long it takes the NCAA to recognize administrative oversights. For example, how could the NCAA miss a bowl game that is played in Nevada, a state that until recently had a de facto monopoly on legal sports wagering? Perhaps the name of the bowl game was vague and NCAA officials never attended a game in person? How could the NCAA miss a bowl game called the Las Vegas Bowl, played in Las Vegas at the football stadium of the University of Nevada, Las Vegas? Perhaps the NCAA doesn't consider Las Vegas to be a metropolitan area or maybe that the NCAA doesn't know that legal sports betting occurs in Nevada? Of course, sports betting in Nevada has only been around since the 1940s, so perhaps it's too recent of an event for the NCAA to be aware.
Actually the policy is targeted at championship play, rather than general post-season play, so certain bowl games could get a pass. However, how can the NCAA be ignorant of the Western Athletic Conference routinely hosting championship play in Nevada? Approximately in the last year, women's soccer, basketball and golf all had their championships hosted in Nevada. Given the NCAA policy, maybe you can excuse soccer, but does Nevada allow bets on golf and basketball? I think yes.
If wagering on outcomes is the issue, Montana has a good story, whereas Delaware and Nevada do not. Fantasy sports, depending on the scoring methodology, generally is not tied to the outcome of an actual game.
Montana likely walks on this but the NCAA will go through the motions (but perhaps with a warning not to expand sports gambling to include betting on games). If the NCAA does place a ban on Delaware, they may have to do the same to Nevada. My guess is that they will let all of this go away and pretend it doesn't exist.
Sunday, May 17, 2009
Need to Brush Up on Math Skills? Gamble!
What, you say? How dare I try to make a claim that gambling has a societal benefit? Don't take it out on me! Take it out on Teri Hatcher, one of the lead actresses on the television series Desperate Housewives. A news item reported on ContactMusic.com that Teri takes her daughter to racetracks (Teri's apparently a horse racing fan) and uses gambling problems to hone the youngster's math skills. As Teri is quoted, "I do use the opportunity to make her understand math and what you're betting and what you get back... so we work on math. It's fun."
There 'ya go. See, responsible gambling can be used to teach kids math! According to the American Academy of Family Physicians, alcoholism affects between 8%-14% of the population. But the Connecticut Department of Mental Health and Addiction services reports that only 2.7% of Americans suffer from problem gambling. Why is this relevant? Because you see much more opposition to gambling than you do to drinking. Seems to me that if these people wanted a more lucrative target, they would oppose drinking. Oh, wait...did that a few years back. How did that work out? Right, no one's drinking anymore. Hmm, tried something similar for internet gambling with UIGEA a couple of years back. How did that work out? Right. No one's gambling online anymore.
So what's going on here? What's going on is that an adult properly instructing her child using a form of entertainment for adults, handled responsibly, isn't such a bad thing. If anything, gambling would be a means to teach math. Addition, subtraction, multiplication, division, probability - gaming math covers all these things.
If you think this is a rare exception, think again. Now not gambling, fantasy sports is also mathematically-focused. There is actually a published mathematics curriculum used in schools right now that leverages fantasy sports to teach mathematics. Effective? Here's a couple of data points:
There you have it. Find interesting and entertaining ways to teach kids - and they learn. What a concept. Isn't this better for the kids than handing out condoms and phone numbers to abortion clinics?
There 'ya go. See, responsible gambling can be used to teach kids math! According to the American Academy of Family Physicians, alcoholism affects between 8%-14% of the population. But the Connecticut Department of Mental Health and Addiction services reports that only 2.7% of Americans suffer from problem gambling. Why is this relevant? Because you see much more opposition to gambling than you do to drinking. Seems to me that if these people wanted a more lucrative target, they would oppose drinking. Oh, wait...did that a few years back. How did that work out? Right, no one's drinking anymore. Hmm, tried something similar for internet gambling with UIGEA a couple of years back. How did that work out? Right. No one's gambling online anymore.
So what's going on here? What's going on is that an adult properly instructing her child using a form of entertainment for adults, handled responsibly, isn't such a bad thing. If anything, gambling would be a means to teach math. Addition, subtraction, multiplication, division, probability - gaming math covers all these things.
If you think this is a rare exception, think again. Now not gambling, fantasy sports is also mathematically-focused. There is actually a published mathematics curriculum used in schools right now that leverages fantasy sports to teach mathematics. Effective? Here's a couple of data points:
- 75% of the teachers agreed that students understand mathematical concepts more now than they did before they used Fantasy Sports and Mathematics
- The percentage of 8th grade students who tested proficient at Woodbine School in New Jersey increased from 10% to 54% in one year after using fantasy sports
There you have it. Find interesting and entertaining ways to teach kids - and they learn. What a concept. Isn't this better for the kids than handing out condoms and phone numbers to abortion clinics?
Sunday, May 10, 2009
Delaware Sports Betting Bill Passes House
The Dover Post reports that the sports betting bill, finally passed the House on Friday. Earlier in the week, the bill had actually failed. The rumor has it that the state's casino operators were in opposition to the original bill, due to the higher gaming taxes and unclear path forward for table games. This blog described other issues with the original bill in a previous post.
The modified bill reduces the increase in taxes so that operators now only will have to pay 43.5% of their gaming revenue. That is a problem. The state should have kept the gaming tax rate at the 37% level. What Delaware is doing is not just adding new gaming options, but increasing the taxes on all gaming revenue.
Let's consider a fast food example to clarify the issue. You have a burger joint. You sell hamburgers, fries and soda. For those items, you pay 10% of the gross profit (price of items minus cost of ingredients). Now, the county health department will allow you to sell cheeseburgers and milkshakes. The price for this expansion is that you will have to pay an upfront fee of $10,000 every year to give you the right to sell cheeseburgers and milkshakes. Not only that, but the tax rate for all food items moves up from 10% to 15%. So, you see in this example, it doesn't really seem like that good of a deal for the burger joint. It isn't.
The original bill was worse, but that was defeated earlier this week. The modification is only slightly better. The increase in the gaming tax rate was reduced to 6.5% from 8%, so the casinos will be paying 43.5% on all gaming revenue. The annual sports betting license fee was cut a paltry half a million to $4 million. The best improvement was putting the table game approval path on a 75 day track to hash out details to present before the legislature.
Politicians seem to live in a world of "orthogonal tuning" when it comes to taxes and revenues. For example, if taxing an item at 20% generates 10 million in taxes, then to a politician it is obvious that raising the taxes on that item to 40% would generate 20 million. Easy! Not so. The politicians, although experts at laws, most of them being lawyers, seem to be oblivious to the law of unintended consequences. When tax rates increase, that has impacts on behaviors and responses. What the government might find in this case that the increase in the tax rate actually results in the decrease in tax revenue.
With regard to the sports betting bill, the casinos will have to operate more lean and mean to survive. As stated in the earlier blog post, the parlay game may not be sufficient to generate lots of interest. Initially, sure, as it is new, but if the game isn't really that good, interest will wane.
What if the casinos, in order to survive, even with table games and sports parlays, had to reduce staff? Is that what Delaware wanted? They might get more revenue from the casinos, but what if one of the casinos close? Will all the revenue move to the remaining casinos? Probably not. With the new legislation in Washington looking to regulate online gambling, it may be in a year or two people can play slots and table games from their home. Why go to a Delaware casino when you can play at home? The only thing the Delaware casinos will have to differentiate themselves is the sports parlay game, which may not be enough.
The modified bill reduces the increase in taxes so that operators now only will have to pay 43.5% of their gaming revenue. That is a problem. The state should have kept the gaming tax rate at the 37% level. What Delaware is doing is not just adding new gaming options, but increasing the taxes on all gaming revenue.
Let's consider a fast food example to clarify the issue. You have a burger joint. You sell hamburgers, fries and soda. For those items, you pay 10% of the gross profit (price of items minus cost of ingredients). Now, the county health department will allow you to sell cheeseburgers and milkshakes. The price for this expansion is that you will have to pay an upfront fee of $10,000 every year to give you the right to sell cheeseburgers and milkshakes. Not only that, but the tax rate for all food items moves up from 10% to 15%. So, you see in this example, it doesn't really seem like that good of a deal for the burger joint. It isn't.
The original bill was worse, but that was defeated earlier this week. The modification is only slightly better. The increase in the gaming tax rate was reduced to 6.5% from 8%, so the casinos will be paying 43.5% on all gaming revenue. The annual sports betting license fee was cut a paltry half a million to $4 million. The best improvement was putting the table game approval path on a 75 day track to hash out details to present before the legislature.
Politicians seem to live in a world of "orthogonal tuning" when it comes to taxes and revenues. For example, if taxing an item at 20% generates 10 million in taxes, then to a politician it is obvious that raising the taxes on that item to 40% would generate 20 million. Easy! Not so. The politicians, although experts at laws, most of them being lawyers, seem to be oblivious to the law of unintended consequences. When tax rates increase, that has impacts on behaviors and responses. What the government might find in this case that the increase in the tax rate actually results in the decrease in tax revenue.
With regard to the sports betting bill, the casinos will have to operate more lean and mean to survive. As stated in the earlier blog post, the parlay game may not be sufficient to generate lots of interest. Initially, sure, as it is new, but if the game isn't really that good, interest will wane.
What if the casinos, in order to survive, even with table games and sports parlays, had to reduce staff? Is that what Delaware wanted? They might get more revenue from the casinos, but what if one of the casinos close? Will all the revenue move to the remaining casinos? Probably not. With the new legislation in Washington looking to regulate online gambling, it may be in a year or two people can play slots and table games from their home. Why go to a Delaware casino when you can play at home? The only thing the Delaware casinos will have to differentiate themselves is the sports parlay game, which may not be enough.
Tuesday, April 14, 2009
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.
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.
Saturday, April 11, 2009
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.
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.
Monday, March 23, 2009
New Jersey to Legally Challenge PASPA
In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA). It should have been called the Nevada Legalized Sports Betting and Illegal Sports Betting Monopoly Act. The law grandfathers four states that had some kind of legal sports betting to be able to allow sports betting, but restrict all others from having legalized sports betting. The four grandfathered states are: Nevada, Oregon, Montana and Delaware. Nevada, is by far the state with the largest amount of legal sports betting. Note that illegal sports betting wasn't hampered by this law. All the law did for 46 states was ensure the "Sopranos" didn't have any legitimate competition. How sweet of Congress to take care of the illegal bookies like that!
Congress knew the law was weak and had iffy Constitutional strength. The Department of Justice (DOJ) actually opposed this law on the grounds that it violated states rights. The reference to the DOJ is here. In addition, the DOJ highlighted the issue that the law allowed professional and amateur sports organizations to bring civil injunctions against states. Professor I. Nelson Rose in his article on PASPA mentions that the US Supreme Court has ruled that states can not be sued without their consent. Professor Rose makes the point that if a state can't be sued by an Indian tribe, what real chance would a sports organization like the NCAA have in getting their case allowed?
The law had never been officially challenged - until now. With state governments scrambling for cash, gambling is looking good. As gambling becomes more prevalent, competition for gaming dollars is heating up. Delaware, as mentioned in a previous post, is considering exercising its rights under PASPA and legalizing a sports betting game. This is causing concern among neighboring states which aren't allowed by PASPA to follow suit.
A New Jersey group comprised of gaming and racing interests filed suit challenging the constitutionality of PASPA in US District Court. The link to the Reuters article is here. It likely won't be decided for quite a few months, but the process is started. Will the DOJ fight the suit even though they are on record questioning the law's violation of states' rights?
I think PASPA should be declared unconstitutional and tossed. Then each state can decide if it wants to allow sports betting and get that betting that is currently unregulated going to bookies become above board, regulated and taxed. Everyone wins...except those with losing bets. Even if PASPA was declared invalid, that would not allow interstate sports betting. That would still be in violation of the Wire Act. This would allow intrastate sports betting. So, the betting books and pools would have to be contained fully within the state, similar to how sports betting in Nevada operates now.
If PASPA is declared invalid, it should increase the value of YouGaming's patents. YouGaming could offer very attractive games to these new markets. Fantasy sports is still growing and pari-mutuel wagering offers a higher intrinsic takeout compared to wagering typical of typical sports wagering.
Congress knew the law was weak and had iffy Constitutional strength. The Department of Justice (DOJ) actually opposed this law on the grounds that it violated states rights. The reference to the DOJ is here. In addition, the DOJ highlighted the issue that the law allowed professional and amateur sports organizations to bring civil injunctions against states. Professor I. Nelson Rose in his article on PASPA mentions that the US Supreme Court has ruled that states can not be sued without their consent. Professor Rose makes the point that if a state can't be sued by an Indian tribe, what real chance would a sports organization like the NCAA have in getting their case allowed?
The law had never been officially challenged - until now. With state governments scrambling for cash, gambling is looking good. As gambling becomes more prevalent, competition for gaming dollars is heating up. Delaware, as mentioned in a previous post, is considering exercising its rights under PASPA and legalizing a sports betting game. This is causing concern among neighboring states which aren't allowed by PASPA to follow suit.
A New Jersey group comprised of gaming and racing interests filed suit challenging the constitutionality of PASPA in US District Court. The link to the Reuters article is here. It likely won't be decided for quite a few months, but the process is started. Will the DOJ fight the suit even though they are on record questioning the law's violation of states' rights?
I think PASPA should be declared unconstitutional and tossed. Then each state can decide if it wants to allow sports betting and get that betting that is currently unregulated going to bookies become above board, regulated and taxed. Everyone wins...except those with losing bets. Even if PASPA was declared invalid, that would not allow interstate sports betting. That would still be in violation of the Wire Act. This would allow intrastate sports betting. So, the betting books and pools would have to be contained fully within the state, similar to how sports betting in Nevada operates now.
If PASPA is declared invalid, it should increase the value of YouGaming's patents. YouGaming could offer very attractive games to these new markets. Fantasy sports is still growing and pari-mutuel wagering offers a higher intrinsic takeout compared to wagering typical of typical sports wagering.
Monday, March 16, 2009
What's the Best Betting Value in the NCAA Tournament?
So, who will win the 2009 NCAA men's basketball tournament? I haven't a clue, but it will be one of 65 teams. I know, that's a great insight - you can thank me later. Looking at the initial odds posted by the Las Vegas Hilton (referenced in a story in the Las Vegas Sun), there may be some teams that based on the odds relative to their seeding, might be worth a gamble.
I took a look at the odds posted for the various teams and mapped them to their seeding. I averaged out the odds per seed level and looked for teams that the posted odds were significantly above the average. Before I give you the possible values, here's the average odds per seed level:
Seed Avg Odds
Notice that the 5, 9 and 11 seeds on average pay more than the next lower seeds. We'll look there and also look at other seed levels to determine if a team or two is being offered at a significant differential to the average odds for the seed level.
If we set a level of differential to identify those teams whose odds are 75% higher than the average odds of their seed level, here's what we get:
4/Xavier - Odds 100:1/Seed Avg Odds 47.5:1
6/Marquette - Odds 100:1/Seed Avg Odds 56.25:1
9/Siena - Odds 500:1/Seed Avg Odds 250:1
11/Utah St - Odds 1,000:1/Seed Avg Odds 475:1
13/Cleveland St - Odds 1,000:1/Seed Avg Odds 400:1
If we lower the value threshold to 40% higher than the average odds of their seed level, these other teams appear:
5/Utah - Odds 100:1/Seed Avg Odds 71.25:1
5/Illinois - Odds 100:1/Seed Avg Odds 71.25:1
8/BYU - Odds 300:1/Seed Avg Odds 175:1
10/Minnesota - Odds 300:1/Seed Avg Odds 200:1
12/W. Kentucky - Odds 300:1/Seed Avg Odds 175:1
This will be interesting to see if any of these make a Cinderella run, or, if the oddsmakers are right, they make an earlier exit than expected.
I took a look at the odds posted for the various teams and mapped them to their seeding. I averaged out the odds per seed level and looked for teams that the posted odds were significantly above the average. Before I give you the possible values, here's the average odds per seed level:
Seed Avg Odds
- 5.75
- 14.25
- 28.75
- 47.5
- 71.25
- 56.25
- 100
- 175
- 250
- 200
- 475
- 175
- 400
- 200
- 200
- 200
Notice that the 5, 9 and 11 seeds on average pay more than the next lower seeds. We'll look there and also look at other seed levels to determine if a team or two is being offered at a significant differential to the average odds for the seed level.
If we set a level of differential to identify those teams whose odds are 75% higher than the average odds of their seed level, here's what we get:
4/Xavier - Odds 100:1/Seed Avg Odds 47.5:1
6/Marquette - Odds 100:1/Seed Avg Odds 56.25:1
9/Siena - Odds 500:1/Seed Avg Odds 250:1
11/Utah St - Odds 1,000:1/Seed Avg Odds 475:1
13/Cleveland St - Odds 1,000:1/Seed Avg Odds 400:1
If we lower the value threshold to 40% higher than the average odds of their seed level, these other teams appear:
5/Utah - Odds 100:1/Seed Avg Odds 71.25:1
5/Illinois - Odds 100:1/Seed Avg Odds 71.25:1
8/BYU - Odds 300:1/Seed Avg Odds 175:1
10/Minnesota - Odds 300:1/Seed Avg Odds 200:1
12/W. Kentucky - Odds 300:1/Seed Avg Odds 175:1
This will be interesting to see if any of these make a Cinderella run, or, if the oddsmakers are right, they make an earlier exit than expected.
Monday, January 26, 2009
Hawaii Lawmakers Consider Gambling
Legalized gambling often is seen by states as an easy way to get additional revenue without raising taxes. To an extent, they are correct. Many states opt for lotteries as opposed to casino gambling, or if they allow casino gambling, they allow tribal gaming.
Hawaii is one of only two states with no gambling (the other state is Utah). With an estimated budget deficit of a billion dollars, some of the Hawaii legislature is considering legalizing gambling to make up the shortfall.
A story from KHON discusses this effort. What gambling would do in Hawaii is not just provide some additional revenue due to gaming. It would have a positive economic impact on the tourism market. Hawaii is awesome, but is suffering from lower tourism levels, due to the economy.
Imagine Las Vegas with lush gardens, water, sand, mild temperatures - and gaming? Very nice. I think that the time is right to make this move. With gambling growing globally, Hawaii can keep up with those that wish to gamble, but combine that with the outstanding locale to create a "winning" combination.
Typically, gambling operations tend to be the most busy from late afternoon to a bit after midnight. There is not as much gambling in the morning hours. This would work out great for Hawaii hotel resort/casinos. During the day, the patrons would be on the beach and doing the typical resort/tourism activities. At dusk, when the beaches clear, the casinos fill.
It is unknown if Hawaii will ultimately legalize gambling for thier hotel resorts, but they should.
Hawaii is one of only two states with no gambling (the other state is Utah). With an estimated budget deficit of a billion dollars, some of the Hawaii legislature is considering legalizing gambling to make up the shortfall.
A story from KHON discusses this effort. What gambling would do in Hawaii is not just provide some additional revenue due to gaming. It would have a positive economic impact on the tourism market. Hawaii is awesome, but is suffering from lower tourism levels, due to the economy.
Imagine Las Vegas with lush gardens, water, sand, mild temperatures - and gaming? Very nice. I think that the time is right to make this move. With gambling growing globally, Hawaii can keep up with those that wish to gamble, but combine that with the outstanding locale to create a "winning" combination.
Typically, gambling operations tend to be the most busy from late afternoon to a bit after midnight. There is not as much gambling in the morning hours. This would work out great for Hawaii hotel resort/casinos. During the day, the patrons would be on the beach and doing the typical resort/tourism activities. At dusk, when the beaches clear, the casinos fill.
It is unknown if Hawaii will ultimately legalize gambling for thier hotel resorts, but they should.
Wednesday, January 21, 2009
Kentucky Court Stops Governor's Move To Seize Online Gambling Domain Names
An AP story today reports that a three-judge panel of the Kentucky Court of Appeals rejected the move by the state to seize the internet domain names from 141 online gambling and related websites. This move by Kentucky was done to stop these sites from being accessible by Kentucky residents. You would think all they had to do was just ask the sites to block Kentucky-based IP addresses. Nope. Seems like some folks aren't that bright in Kentucky, particularly the Governor.
Governor Beshear's apparent intent was to keep out gambling competition from hurting the state's horse racing industry, but the way he went about it was very unusual. Quoting from an article in the December issue of CAP Magazine, attorney Martin Owens describes that the person expected to enforce state laws, the Attorney General, was not the person who filed suit. It was done by a state agency named the Justice and Public Safety Cabinet, whose charter covers prisons, public defenders and coroners. The agency does not have charter that covers telecommunications or gambling. It gets more unusual. The agency actually hired an outside, private law firm to file the suit. Now there's a wise use of taxpayer dollars in this economic environment.
The AP quotes Judge Michelle Keller, who wrote the majority opinion, "It stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a 'machine or any mechanical or other device ... designed and manufactured primarily for use in connection with gambling,'" So, in other words, an IP address is not a gambling device.
Mr. Owens in his article cites Kentucky Revised Statutes Section 528.010 which defines gambling devices. Gambling devices are defined as those things which, "...when operated may deliver, as the result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive (them)." 1
It is extremely plain that a website address or domain name doesn't even come close to the definition of a gambling device. Mr. Owens also makes very clear the nonsense being attempted by the Governor. He equates the logic of this suit to trying to arrest the house address numbers of a building where gambling occurred.
I think Kentucky better stick to raising horses and making bourbon rather than trying to set unusual legal precedent. But they won't. The Governor's office has already stated its intent to appeal the ruling.
References
1. Owens M. (2008, December/2009, January), All Eyes On Kentucky, CAP Magazine, 51-52.
Governor Beshear's apparent intent was to keep out gambling competition from hurting the state's horse racing industry, but the way he went about it was very unusual. Quoting from an article in the December issue of CAP Magazine, attorney Martin Owens describes that the person expected to enforce state laws, the Attorney General, was not the person who filed suit. It was done by a state agency named the Justice and Public Safety Cabinet, whose charter covers prisons, public defenders and coroners. The agency does not have charter that covers telecommunications or gambling. It gets more unusual. The agency actually hired an outside, private law firm to file the suit. Now there's a wise use of taxpayer dollars in this economic environment.
The AP quotes Judge Michelle Keller, who wrote the majority opinion, "It stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a 'machine or any mechanical or other device ... designed and manufactured primarily for use in connection with gambling,'" So, in other words, an IP address is not a gambling device.
Mr. Owens in his article cites Kentucky Revised Statutes Section 528.010 which defines gambling devices. Gambling devices are defined as those things which, "...when operated may deliver, as the result of the application of an element of chance, any money or property, or by the operation of which a person may become entitled to receive (them)." 1
It is extremely plain that a website address or domain name doesn't even come close to the definition of a gambling device. Mr. Owens also makes very clear the nonsense being attempted by the Governor. He equates the logic of this suit to trying to arrest the house address numbers of a building where gambling occurred.
I think Kentucky better stick to raising horses and making bourbon rather than trying to set unusual legal precedent. But they won't. The Governor's office has already stated its intent to appeal the ruling.
References
1. Owens M. (2008, December/2009, January), All Eyes On Kentucky, CAP Magazine, 51-52.
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