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 wagering. Show all posts
Showing posts with label wagering. Show all posts
Thursday, October 31, 2013
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?
Monday, August 16, 2010
Horse Racing Looking to Fantasy Sports?
BloodHorse magazine in their July 24, 2010 issue had an opinion piece titled "Fantasy Sports: An Opportunity - and a Competitor." The article described the size and growth of the fantasy sports market, the typical demographic, a warning about the potential threat and the potential opportunity. I think the author pointing towards fantasy sports isn't that bad, but his findings are off.
The quote from the article takes recent information from the Fantasy Sports Trade Association's research. There are approximately 27 million Americans and approximately 3 million Canadians that play fantasy sports. That's a pretty good size group of people. With regard to the American player, he is male, 37, college-educated, and has a household income of $94,000 - a great demographic that the horse racing industry would love. As is well known by the typical horseplayer demographic, you would think you need an AARP card in order to place a bet.
Here's where the author is off the mark. The author lays out a decent overview of TVG's Fantasy Horseracing product, which allows players to create a league of horses, trainers and jockeys. He thinks that horse racing would be a great fantasy sports vehicle, which would attract fantasy sports players, who may then become horseplayers to some extent. Wrong, wrong, wrong. No chance.
Why? Super simple.
As anyone who knows fantasy sports (i.e. me) can tell you, fantasy enthusiasts are primarily FANS OF THE SPORT. If you are a fantasy baseball player, odds are you are a baseball fan, then you got into fantasy baseball. The same is true for football, basketball, NASCAR, etc., etc. Fantasy sports players play fantasy sports to get more out of the sport they enjoy. Only the most geeky would have statistics be an attractant. For those, baseball is king...and in my opinion cricket probably isn't far behind - but cricket isn't as popular in the US.
What will not happen is horse racing fantasy being a big draw and sucking in new fans like Washington DC sucking in your tax dollars. Nope. Fantasy horse racing players are horse racing fans who got into fantasy horse racing. If you're not into horse racing, you're not going to play fantasy horse racing. This is where the author is way off.
The author is correct that the demographic would be very attractive to horse racing. They are younger, affluent and intelligent - exactly the kind of new handicappers the industry needs. I've got an idea of how you get these folks, but it's not this way. More on that in a future post.
The quote from the article takes recent information from the Fantasy Sports Trade Association's research. There are approximately 27 million Americans and approximately 3 million Canadians that play fantasy sports. That's a pretty good size group of people. With regard to the American player, he is male, 37, college-educated, and has a household income of $94,000 - a great demographic that the horse racing industry would love. As is well known by the typical horseplayer demographic, you would think you need an AARP card in order to place a bet.
Here's where the author is off the mark. The author lays out a decent overview of TVG's Fantasy Horseracing product, which allows players to create a league of horses, trainers and jockeys. He thinks that horse racing would be a great fantasy sports vehicle, which would attract fantasy sports players, who may then become horseplayers to some extent. Wrong, wrong, wrong. No chance.
Why? Super simple.
As anyone who knows fantasy sports (i.e. me) can tell you, fantasy enthusiasts are primarily FANS OF THE SPORT. If you are a fantasy baseball player, odds are you are a baseball fan, then you got into fantasy baseball. The same is true for football, basketball, NASCAR, etc., etc. Fantasy sports players play fantasy sports to get more out of the sport they enjoy. Only the most geeky would have statistics be an attractant. For those, baseball is king...and in my opinion cricket probably isn't far behind - but cricket isn't as popular in the US.
What will not happen is horse racing fantasy being a big draw and sucking in new fans like Washington DC sucking in your tax dollars. Nope. Fantasy horse racing players are horse racing fans who got into fantasy horse racing. If you're not into horse racing, you're not going to play fantasy horse racing. This is where the author is way off.
The author is correct that the demographic would be very attractive to horse racing. They are younger, affluent and intelligent - exactly the kind of new handicappers the industry needs. I've got an idea of how you get these folks, but it's not this way. More on that in a future post.
Tuesday, July 20, 2010
A Horse Racing Article That Is Right But Wrong
BloodHorse.com has an article that discusses various means by which racetracks can counter declines in handle. I took a look at the article, penned by a couple of authors known in the industry. There are a couple of decent points made, but nothing in the article is that innovative or new. Stating conventional wisdom may fill some pages in a magazine, but doesn't do much if you are a racetrack executive looking for sage advice.
The secondary headline - how to move beyond a broken model - isn't really a "news flash." The decline in handle and the profitability pressures being endured by tracks are well known. For those so inclined, my "critically acclaimed" analysis of the racetrack industry can be found here. The revenue model for horse racing doesn't work anymore given the explosion in competing forms of gaming available to US consumers, compounded by the stupidity of the horse racing industry to not see the threat or even react to it, other than complaining, whining and fighting among the various industry constituencies for an equal or larger share of a decreasing pie.
There really isn't anything wrong with the pari-mutuel wagering method. It's been used in the US and around the world for around a century. If there was some kind of flaw, it would have appeared by now. If the argument is that takeout is too large, perhaps there is an argument. I am of the opinion that takeout should be somewhat lower, on the order of 15% for all types of wagers, straight and exotic.
The article discusses three concepts: reduced takeout, new pari-mutuel wagers and betting exchanges. Again, some decent points are made but miss the mark and in and of themselves aren't likely to be the "killer app" that will save the industry. In addition, some of these concepts have been discussed before in other industry venues, such as RTIP. Nothing new.
The biggest error in the article is the argument that betting exchanges will supplant the pari-mutuel betting model. Not a chance. The reason is obvious. If the industry can't survive with tracks, horsemen, ADWs and state and local governments fighting over how to split a quarter, how is it going to survive with the same folks fighting over how to split a few pennies? If handle, which is declining, would have to double if takeout was reduced to 10%, what about requiring handle to increase by a factor of 7 to obtain the same takeout with betting exchanges? Yeah, right.
Betting exchanges for horse racing aren't a high probability. Betfair can hope and pray and lobby all they like, but I think a snowball has a better chance in the nether regions than betting exchanges for horse racing being approved in the US. Couple that with their purchase of TVG with its ADW operation, what makes Betfair think that the purchase of an ADW would make them more endearing to the tracks?
All these approaches miss the salient point which is that bettors have other options and options they know. They are not horseplayers. The core attractant is the event, not the betting method. Do you really think that people will flock to horse racing just because of a betting method? Hardly. People bet on SOMETHING. It's the SOMETHING that attracts them and they bet on it. If the SOMETHING isn't interesting, they are not going to bet on it given the other SOMETHINGS that exist that have proven to be interesting to bettors (e.g. sports, poker, lottery, casino).
The final paragraph is classic stating the obvious. It reads, "imaginative strategic thinking, multiple tactical approaches, calculated risk-taking, and perseverance in the face of barriers are the ways forward. No single line of attack is a panacea, but maintaining the status quo is untenable." Wow, such wisdom. Too bad the authors didn't mention any of those in the article. I guess they're saving that for the racetrack operators that hire them as consultants. I sure hope that their clients get their money's worth.
References:
Shanklin, W. & Christiansen, E. (2010, July 10), Beyond Pari-Mutuel Wagering, BloodHorse.com.
The secondary headline - how to move beyond a broken model - isn't really a "news flash." The decline in handle and the profitability pressures being endured by tracks are well known. For those so inclined, my "critically acclaimed" analysis of the racetrack industry can be found here. The revenue model for horse racing doesn't work anymore given the explosion in competing forms of gaming available to US consumers, compounded by the stupidity of the horse racing industry to not see the threat or even react to it, other than complaining, whining and fighting among the various industry constituencies for an equal or larger share of a decreasing pie.
There really isn't anything wrong with the pari-mutuel wagering method. It's been used in the US and around the world for around a century. If there was some kind of flaw, it would have appeared by now. If the argument is that takeout is too large, perhaps there is an argument. I am of the opinion that takeout should be somewhat lower, on the order of 15% for all types of wagers, straight and exotic.
The article discusses three concepts: reduced takeout, new pari-mutuel wagers and betting exchanges. Again, some decent points are made but miss the mark and in and of themselves aren't likely to be the "killer app" that will save the industry. In addition, some of these concepts have been discussed before in other industry venues, such as RTIP. Nothing new.
The biggest error in the article is the argument that betting exchanges will supplant the pari-mutuel betting model. Not a chance. The reason is obvious. If the industry can't survive with tracks, horsemen, ADWs and state and local governments fighting over how to split a quarter, how is it going to survive with the same folks fighting over how to split a few pennies? If handle, which is declining, would have to double if takeout was reduced to 10%, what about requiring handle to increase by a factor of 7 to obtain the same takeout with betting exchanges? Yeah, right.
Betting exchanges for horse racing aren't a high probability. Betfair can hope and pray and lobby all they like, but I think a snowball has a better chance in the nether regions than betting exchanges for horse racing being approved in the US. Couple that with their purchase of TVG with its ADW operation, what makes Betfair think that the purchase of an ADW would make them more endearing to the tracks?
All these approaches miss the salient point which is that bettors have other options and options they know. They are not horseplayers. The core attractant is the event, not the betting method. Do you really think that people will flock to horse racing just because of a betting method? Hardly. People bet on SOMETHING. It's the SOMETHING that attracts them and they bet on it. If the SOMETHING isn't interesting, they are not going to bet on it given the other SOMETHINGS that exist that have proven to be interesting to bettors (e.g. sports, poker, lottery, casino).
The final paragraph is classic stating the obvious. It reads, "imaginative strategic thinking, multiple tactical approaches, calculated risk-taking, and perseverance in the face of barriers are the ways forward. No single line of attack is a panacea, but maintaining the status quo is untenable." Wow, such wisdom. Too bad the authors didn't mention any of those in the article. I guess they're saving that for the racetrack operators that hire them as consultants. I sure hope that their clients get their money's worth.
References:
Shanklin, W. & Christiansen, E. (2010, July 10), Beyond Pari-Mutuel Wagering, BloodHorse.com.
Thursday, May 27, 2010
Super Bowl In NYC To Increase Sports Betting?
Casino Gambling Web reports that having the Super Bowl outdoors in a cold weather venue will lead to increased gambling on the game, particularly with regard to proposition bets. The premise is that the weather will generate more proposition bets regarding the weather, such as temperature, snow, etc. I disagree. The same propositions can be offered for games in warm weather locations, with the proposition temperature being higher and rain being substituted for snow.
The article is correct in predicting that the total points scored over/under level will likely be several points lower and that the point spread may be tighter. The article also mentions that during the two-week betting window before the game, the forecast weather may radically change, putting sportsbooks in jeopardy. This could occur if the game weather forecast moves from inclement to clear and sunny, or vice versa, during the runup to the game. If sportsbooks have taken too much action on a side that would benefit from a weather forecast change, they could be hit hard if even more action on the wrong side for them came in the days right before the game, with no real chance to balance the action.
We won't have to wait long to see if this is true as the 2014 Super Bowl will be in New Jersey, at the stadium for the New York Jets and Giants. If this occurs, will the NFL stop having the Super Bowl outdoor in cold weather locations, or will they continue to stick to their story that for them, it's about the game and not the gambling money? My guess is that if betting is hampered or the sportsbooks lose big, the Super Bowl moves back to warm weather stadiums or indoors.
One of the biggest jokes in sports betting in my opinion is the position of the NFL that it is worried about gambling because of the integrity of the game and that the popularity of the game is solely due to the game itself and not any gambling. The NFL is a great fit for gambling. Do you really think all those Monday night, Thursday night, Sunday night and Saturday night games are scheduled because those games couldn't be played on Sunday? My sentiment is that the NFL and other sports leagues oppose sports betting primarily because they don't get a cut of the money. Some consider fantasy sports gambling and you see all the major US sports leagues having fantasy sports games. Interesting, yes?
The article is correct in predicting that the total points scored over/under level will likely be several points lower and that the point spread may be tighter. The article also mentions that during the two-week betting window before the game, the forecast weather may radically change, putting sportsbooks in jeopardy. This could occur if the game weather forecast moves from inclement to clear and sunny, or vice versa, during the runup to the game. If sportsbooks have taken too much action on a side that would benefit from a weather forecast change, they could be hit hard if even more action on the wrong side for them came in the days right before the game, with no real chance to balance the action.
We won't have to wait long to see if this is true as the 2014 Super Bowl will be in New Jersey, at the stadium for the New York Jets and Giants. If this occurs, will the NFL stop having the Super Bowl outdoor in cold weather locations, or will they continue to stick to their story that for them, it's about the game and not the gambling money? My guess is that if betting is hampered or the sportsbooks lose big, the Super Bowl moves back to warm weather stadiums or indoors.
One of the biggest jokes in sports betting in my opinion is the position of the NFL that it is worried about gambling because of the integrity of the game and that the popularity of the game is solely due to the game itself and not any gambling. The NFL is a great fit for gambling. Do you really think all those Monday night, Thursday night, Sunday night and Saturday night games are scheduled because those games couldn't be played on Sunday? My sentiment is that the NFL and other sports leagues oppose sports betting primarily because they don't get a cut of the money. Some consider fantasy sports gambling and you see all the major US sports leagues having fantasy sports games. Interesting, yes?
Saturday, November 7, 2009
Further Evidence Smoking Bans Harmful To Gambling Revenues
Several months ago, I posted on the topic of smoking bans playing into the hands of online gambling operators, to the detriment of land-based casino operations. The data from Illinois showed gambling revenues down approximately 20% after the smoking ban took effect. Montana has recently implemented a similar ban and the gambling revenue impacts are similar. According to the story by MontanaNewsStation.com, gambling revenues across the state are down 16% to 18%, just after one month. This is in line with the experience from Illinois casinos.
In my original post, I made the point that online gambling venues may benefit as if someone could smoke in their home and gamble might be a more attractive option than traveling to a smoke-free casino. Play the same games at home and smoke if you want.
In Montana, the competition can be online gambling, but a more clearly defined alternative is the tribally-owned casino in Montana. Tribally-owned casinos are exempt from the smoking ban as reported by the Flathead Beacon. According to a related story by the Great Falls Tribune, "some businesses on the state's Indian Reservations, which are not subject to the Montana Clean Indoor Air Act, are now marketing to people who like to have a cigarette with their cup of coffee, meal or adult beverage or while gambling - indoors."
What Montana has done in addition to eliminating smoking in more indoor venues is actually provide a sustainable competitive advantage to the state's tribal casinos, to the detriment of the other gaming competition. That likely wasn't an objective.
Most legislative bodies are chock full of lawyers. But like most lawyers, there is one law that they haven't been schooled in and continually run afoul of - the law of unintended consequences.
In my original post, I made the point that online gambling venues may benefit as if someone could smoke in their home and gamble might be a more attractive option than traveling to a smoke-free casino. Play the same games at home and smoke if you want.
In Montana, the competition can be online gambling, but a more clearly defined alternative is the tribally-owned casino in Montana. Tribally-owned casinos are exempt from the smoking ban as reported by the Flathead Beacon. According to a related story by the Great Falls Tribune, "some businesses on the state's Indian Reservations, which are not subject to the Montana Clean Indoor Air Act, are now marketing to people who like to have a cigarette with their cup of coffee, meal or adult beverage or while gambling - indoors."
What Montana has done in addition to eliminating smoking in more indoor venues is actually provide a sustainable competitive advantage to the state's tribal casinos, to the detriment of the other gaming competition. That likely wasn't an objective.
Most legislative bodies are chock full of lawyers. But like most lawyers, there is one law that they haven't been schooled in and continually run afoul of - the law of unintended consequences.
Thursday, July 9, 2009
Some Advantages of Online Casinos
The convenience of online casinos is well known. Where else can, in theory, you can hang out in your pajamas and play slots, blackjack or poker? Or, if you're the boss, play the same at work (I do not recommend this if you are NOT the boss). What you don't get online is the true feel of the crowd and the gaming experience. But that may actually be an advantage.
The Casino Journal reports that casinos and bingo parlors in several provinces in Argentina have been closed due to fears over the Swine Flu. Apparently that government has just publicly declared a health emergency for the month of July, due to the flu. Those brick and mortar operations are closed, not generating a dime of revenue. Online casinos are still open! Can you get sick from a person sitting next to you in an online poker game? Not likely. Advantage online casino!
That's not all. GamingIntelligence.com cites a news item from the Remote Gambling Association, referencing a study from MHA Consulting of money laundering in online gambling operations. The essence of the study that "the absence of cases and examples of money laundering and terrorist financing within the remote gambling industry indicated that the risks were low, highlighting a strong commitment within the industry to prevent and detect any occurrences, to comply with the various legislative and regulatory requirements, and to co-operate with the authorities."
In addition, "online gambling is not a likely accessible avenue for money laundering because the identities of the gamblers are known, the financial transactions between the bettors and operators are all in electronic format, and all of the wagering is recorded." Again, advantage online casino!
If you wanted to launder money in small amounts over a period of time, you likely could do that anonymously in a brick and mortar casino. If you didn't sign up for a Players Club card, used cash, and kept your wagers under a few thousand per day, it is possible that you would not attract much attention, particularly if you did not frequent the same property.
So for a player at an online casino, you get convenience, some protection from disease transmission and knowledge that the site has the capability to hinder the improper use of the facility for money laundering for nefarious purposes. All that and entertainment! Woo Hoo!
The Casino Journal reports that casinos and bingo parlors in several provinces in Argentina have been closed due to fears over the Swine Flu. Apparently that government has just publicly declared a health emergency for the month of July, due to the flu. Those brick and mortar operations are closed, not generating a dime of revenue. Online casinos are still open! Can you get sick from a person sitting next to you in an online poker game? Not likely. Advantage online casino!
That's not all. GamingIntelligence.com cites a news item from the Remote Gambling Association, referencing a study from MHA Consulting of money laundering in online gambling operations. The essence of the study that "the absence of cases and examples of money laundering and terrorist financing within the remote gambling industry indicated that the risks were low, highlighting a strong commitment within the industry to prevent and detect any occurrences, to comply with the various legislative and regulatory requirements, and to co-operate with the authorities."
In addition, "online gambling is not a likely accessible avenue for money laundering because the identities of the gamblers are known, the financial transactions between the bettors and operators are all in electronic format, and all of the wagering is recorded." Again, advantage online casino!
If you wanted to launder money in small amounts over a period of time, you likely could do that anonymously in a brick and mortar casino. If you didn't sign up for a Players Club card, used cash, and kept your wagers under a few thousand per day, it is possible that you would not attract much attention, particularly if you did not frequent the same property.
So for a player at an online casino, you get convenience, some protection from disease transmission and knowledge that the site has the capability to hinder the improper use of the facility for money laundering for nefarious purposes. All that and entertainment! Woo Hoo!
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.
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.
Saturday, February 7, 2009
Are Anti-Smoking Bans Online Gambling's Friend?
Land-based casinos are facing another indirect threat from online casinos, and that threat comes from nearby, not from some offshore locale. Anti-smoking laws that impact casinos impact more than just air quality.
For those that like to gamble and smoke, a smoking ban is more than an inconvenience. These patrons often just go home and smoke, and with online gambling, they can gamble and smoke right from their living room.
Anti-smoking laws are not just being implemented in the United States. France implemented a smoking ban last year and evidence is already in that their land-based casinos are feeling the impact.
"There are multiple factors that have directly and indirectly caused the French casinos to face losses in revenue during 2008. First, the smoking ban that became effective on Jan 1, 2008, has radically changed the habits of players. Players were used to smoking and drinking while playing. Instead of quitting smoking, players have preferred to neglect the casino properties. They now play at home on the Internet, where they can smoke while gambling." 1
US casinos have also seen revenues decline after imposition of smoking bans. Tom Swoik of the Illinois Casino Gaming Associate reports that in the first year after the statewide smoking ban that became effective January 1st of last year, Illinois casinos had a nearly 21% reduction in revenue. Although the economy can explain part of the decline, the smoking ban is implicated as the major cause, due to the comparison with casino revenue in Indiana, which has a similar economy, but with no smoking ban. Swoik added that the two states that have been hurt the most are Illinois and Colorado, as both had smoking bans that were implemented.
"'When you compare the Chicagoland market with the Northern Indiana market,' Swoik said, 'the Chicagoland market in Illinois is down 21.8 percent, and Indiana’s down 4.7 percent. They have the same economy and the same weather that we have. In the St. Louis market, Illinois is down 20.3 percent, Missouri’s down 9.9 percent.'" 2
If you have a land-based casino, the lessons already learned are clear. You need to work to ensure no smoking ban is enacted that impacts your property. Moving proactively to create smoke-free gaming and dining areas might be advisable. If your location is in a warm weather location, creating outdoor venues for gaming and dining may actually increase business while staving off anti-smoking laws.
If you are an online casino, exploration of exploiting these laws in your marketing efforts should be undertaken. If your customer demographic has a substantial amount of smokers, highlight the convenience of gaming and smoking without the hassle of "designated smoking areas." As part of the frequent player program, cigarettes, cigars and other smoking paraphernalia could be included as redeemable items or as incentive gifts for new players.
The most bold approach would be for online casinos to actively support anti-smoking efforts that included casino properties for the express purpose of driving customers to the online sites.
Citations:
[1] Verbiest, T. & Pelletier P. (2009, Winter), Rien Ne Va Plus In The French Casino, Casino Lawyer, 26.
[2] Ortbals, A. (2009, February), Cities, state, schools socked by smoking ban impact on casino revenues, Illinois Business Journal, Retrieved February 7, 2009, from: http://www.ibjonline.com/
References:
Black, P. (2009, January 31), onlinecasinosphere.com, Retrieved February 7, 2009, from:
http://www.onlinecasinosphere.com/news/reports/world-casinos/future-of-online-gambling-5396.php
Ortbals, A. (2009, February), Cities, state, schools socked by smoking ban impact on casino revenues, Illinois Business Journal, Retrieved February 7, 2009, from: http://www.ibjonline.com/
Pakko, M. (2008, January), Clearing the Haze? New Evidence on the Economic Impact of Smoking Bans, The Regional Economist, Federal Reserve Bank of St. Louis, Retrieved February 7, 2009, from: http://stlouisfed.org/publications/re/2008/a/pages/smoking-ban.html
Verbiest, T. & Pelletier P. (2009, Winter), Rien Ne Va Plus In The French Casino, Casino Lawyer, 26-27.
For those that like to gamble and smoke, a smoking ban is more than an inconvenience. These patrons often just go home and smoke, and with online gambling, they can gamble and smoke right from their living room.
Anti-smoking laws are not just being implemented in the United States. France implemented a smoking ban last year and evidence is already in that their land-based casinos are feeling the impact.
"There are multiple factors that have directly and indirectly caused the French casinos to face losses in revenue during 2008. First, the smoking ban that became effective on Jan 1, 2008, has radically changed the habits of players. Players were used to smoking and drinking while playing. Instead of quitting smoking, players have preferred to neglect the casino properties. They now play at home on the Internet, where they can smoke while gambling." 1
US casinos have also seen revenues decline after imposition of smoking bans. Tom Swoik of the Illinois Casino Gaming Associate reports that in the first year after the statewide smoking ban that became effective January 1st of last year, Illinois casinos had a nearly 21% reduction in revenue. Although the economy can explain part of the decline, the smoking ban is implicated as the major cause, due to the comparison with casino revenue in Indiana, which has a similar economy, but with no smoking ban. Swoik added that the two states that have been hurt the most are Illinois and Colorado, as both had smoking bans that were implemented.
"'When you compare the Chicagoland market with the Northern Indiana market,' Swoik said, 'the Chicagoland market in Illinois is down 21.8 percent, and Indiana’s down 4.7 percent. They have the same economy and the same weather that we have. In the St. Louis market, Illinois is down 20.3 percent, Missouri’s down 9.9 percent.'" 2
If you have a land-based casino, the lessons already learned are clear. You need to work to ensure no smoking ban is enacted that impacts your property. Moving proactively to create smoke-free gaming and dining areas might be advisable. If your location is in a warm weather location, creating outdoor venues for gaming and dining may actually increase business while staving off anti-smoking laws.
If you are an online casino, exploration of exploiting these laws in your marketing efforts should be undertaken. If your customer demographic has a substantial amount of smokers, highlight the convenience of gaming and smoking without the hassle of "designated smoking areas." As part of the frequent player program, cigarettes, cigars and other smoking paraphernalia could be included as redeemable items or as incentive gifts for new players.
The most bold approach would be for online casinos to actively support anti-smoking efforts that included casino properties for the express purpose of driving customers to the online sites.
Citations:
[1] Verbiest, T. & Pelletier P. (2009, Winter), Rien Ne Va Plus In The French Casino, Casino Lawyer, 26.
[2] Ortbals, A. (2009, February), Cities, state, schools socked by smoking ban impact on casino revenues, Illinois Business Journal, Retrieved February 7, 2009, from: http://www.ibjonline.com/
References:
Black, P. (2009, January 31), onlinecasinosphere.com, Retrieved February 7, 2009, from:
http://www.onlinecasinosphere.com/news/reports/world-casinos/future-of-online-gambling-5396.php
Ortbals, A. (2009, February), Cities, state, schools socked by smoking ban impact on casino revenues, Illinois Business Journal, Retrieved February 7, 2009, from: http://www.ibjonline.com/
Pakko, M. (2008, January), Clearing the Haze? New Evidence on the Economic Impact of Smoking Bans, The Regional Economist, Federal Reserve Bank of St. Louis, Retrieved February 7, 2009, from: http://stlouisfed.org/publications/re/2008/a/pages/smoking-ban.html
Verbiest, T. & Pelletier P. (2009, Winter), Rien Ne Va Plus In The French Casino, Casino Lawyer, 26-27.
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.
Tuesday, December 30, 2008
Question: How Do You Spell Failure? Answer: Montana Sports Action
The NFL regular season is over, and so is the first NFL season for Montana Sports Action. The weekly handle is shown in the chart above. It doesn't look very pretty. Problems with this game have been discussed in previous posts. You can read those posts here and here.For the entire season, Montana Sports Action didn't even generate $100,000 in handle. The estimate, based on prize amounts, is approximately $87,510. If you read the hype regarding the revenue potential of this game, it should have been generating $87 thousand per week in wagers. Not even close. The results are so poor, that it is likely that the total amount held back for horse racing, the lottery and the retailers wasn't even enough to offset the costs of the fantasy sports statistics feed. However the cost of the statistics feed can not be covered by the fees to the retailers, or by the fees given to the Board of Horse Racing, so the network operator (Lottery) has to cover an approximate $20,000 charge with their gross revenue of about $5,250.
There is nothing positive with these results. Even the trend is in the wrong direction. If handle was low, but steadily increasing, you could make the claim that the future looks brighter. Not with Montana Sports Action. The trend is downward, with lower handle as the season progressed.
The total revenue amounts to the various entities after paying prizes are approximately:
Montana Board of Horse Racing (MBOHR) - $14,000
Montana Lottery - $5,250
Retailers - $3,500
Assuming 150 retailers, each one generated on average a whopping $23 in commissions - $1.37 per week.
As stated in a previous post, probably only the statistics supplier made money on this game.
On a related topic discussed in a previous post, if this game is truly a lottery game, and not a pari-mutuel game, as the Lottery seems to be moving their positioning toward, why pay MBOHR any money? If the game is a lottery game, that game would be outside the purview of HB 616; therefore no need to pay MBOHR. Quoting Forrest Gump, "stupid is as stupid does."
Keeping with the topic of stupidity, the Montana Lottery is looking to launch a similar game for the NASCAR racing season. Recent research from the Fantasy Sports Trade Association estimated that there were about 4 times as many fantasy NFL participants as fantasy NASCAR participants. Given the poor results of the NFL game, which by far is the most popular fantasy sport, it is fair to estimate that the NASCAR game will generate about 1/4 the handle. Even Forrest Gump would be scratching his head at that.
Given this assumption, and the assumption that the Montana Lottery or their vendor partner isn't bright enough to make sufficient changes to the core game, a similar handle chart is expected. Some initial interest, realization that the game is poor, and a steady gradual decline in handle. Albert Einstein defined insanity as doing the same thing over and over again and expecting different results.
There are rumors of legislation that will be proposed in the new year to put an end to this insanity. Let's see if the Montana Legislature has more sense than the Montana Lottery and the Montana Board of Horse Racing. Time will tell.
Tuesday, December 16, 2008
Delaware Looking To Parlay With Sports Betting
When the Delaware Legislature convenes next month, figuring out something to help their racinos counter increased gambling offerings from Pennsylvania and Maryland will be on their list of "to do" items.
How do you counter gambling? MORE GAMBLING! As Sarah Palin might say, "you didn't see that one coming, you betcha!"
Delaware is one of four states that is grandfathered under the Professional and Amateur Sports Protection Act to legally offer sports gambling. If bigger states offer more slot machines to keep their gambling citizens within state borders, how does a small state like Delaware compete? Offering something Pennsylvania and Maryland can't is probably a good idea. The Forbes.com link to the Associated Press article has more detail on the subject.
The outgoing governor is against the idea, but who cares? She's leaving so who gives a hoot about what she thinks? The incoming governor is facing a revenue shortfall to the tune of about 500 million dollars, and the increased gaming competition from nearby states isn't going to help. He could opt for the Beatles' "Taxman" approach, but that won't be too popular. But adding more gambling? A win-win! (except for the people that lose money gambling) The choice is, do you let those gamblers lose money in someone else's state, or do you want them to lose money in Delaware? If you're Delaware, that's a no brainer.
If Delaware adds sports gambling products that are popular and profitable, Delaware could totally counter what her neighboring states are doing. To those that are scratching their heads, yes, you can offer a sports betting product that loses money. Check out my recent posts regarding Montana Sports Action.
How do you counter gambling? MORE GAMBLING! As Sarah Palin might say, "you didn't see that one coming, you betcha!"
Delaware is one of four states that is grandfathered under the Professional and Amateur Sports Protection Act to legally offer sports gambling. If bigger states offer more slot machines to keep their gambling citizens within state borders, how does a small state like Delaware compete? Offering something Pennsylvania and Maryland can't is probably a good idea. The Forbes.com link to the Associated Press article has more detail on the subject.
The outgoing governor is against the idea, but who cares? She's leaving so who gives a hoot about what she thinks? The incoming governor is facing a revenue shortfall to the tune of about 500 million dollars, and the increased gaming competition from nearby states isn't going to help. He could opt for the Beatles' "Taxman" approach, but that won't be too popular. But adding more gambling? A win-win! (except for the people that lose money gambling) The choice is, do you let those gamblers lose money in someone else's state, or do you want them to lose money in Delaware? If you're Delaware, that's a no brainer.
If Delaware adds sports gambling products that are popular and profitable, Delaware could totally counter what her neighboring states are doing. To those that are scratching their heads, yes, you can offer a sports betting product that loses money. Check out my recent posts regarding Montana Sports Action.
Saturday, August 30, 2008
Support for US Online Gambling Continues
Online-Casinos.com reports on a recent poll conducted by the Las Vegas Advisor.com site. As the post title suggests, the poll shows that support for legalized online gambling remains. This poll was more detailed in that the answers available were more than a yes or no. Respondents were allowed choices that nuanced their yes or no positions.
Of the approximately 4,800 votes, the yes/no split was 68%/32%. Being an open, online poll, the result is unscientific but since the poll was conducted on a site that has a Vegas bias, it is still interesting. If any locale would be opposed to widespread online gambling, it would be Vegas.
Of the approximately 4,800 votes, the yes/no split was 68%/32%. Being an open, online poll, the result is unscientific but since the poll was conducted on a site that has a Vegas bias, it is still interesting. If any locale would be opposed to widespread online gambling, it would be Vegas.
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