Sports betting industry tries to quell concerns of tribal casinos



Facing an audience skeptical about the risk of expanding sports betting to tribal casinos given the 5 percent return on total handle in Nevada, gaming industry executives said Wednesday that it’s worth it to bring in customers that will spend on food, entertainment and other types of gambling.


Facing an audience skeptical about the risk of expanding sports betting to tribal casinos given the 5 percent return on total handle in Nevada, gaming industry executives said Wednesday that it's worth it to bring in customers that will spend on food, entertainment and other types of gambling.

An overflow crowd packed a conference room at the Las Vegas Convention Center during the Sports Betting in Tribal Country session at the 2018 Indian Tradeshow & Convention. The interest in sports betting has intensified as the U.S. Supreme Court continues to consider overturning a 1992 federal law that currently allows full-fledged sports betting only in Nevada. That decision is expected by June, and has states scrambling to write and pass legislation.

Michael Grodsky, director of marketing for William Hill Race & Sports Book, told the audience that their partnership with the Fort Mohave Indian Tribe in Laughlin has been a success.

The margin of sports books are lower than anything else offered in the casino, Grodsky said. In Nevada in 2017, sports betting held only 5.1 percent, or $249 million, out of a total $4.8 billion handled.

"It could be a smaller revenue number for your property, but think of the ancillary benefits," Grodsky said. "You bring in a new audience that typically wouldn't come to your property regularly. They might be bringing in other people that will come in and game, and (that) spills over to food and beverage revenue. It will spill back over to the table and slots as well. I think it's a great amenity to have."

Joe Brennan Jr., CEO of Sport Analytics & Data Corp., said tribes need to consider what it means to add sports betting.

"You will hear people talking about sports betting and the media and leagues saying there is a lot of money in it," Brennan said. "When you get down to it, your responsibility is to your casino and tribe and what (sports betting) means to your core business."

Brennan said no one in New Jersey has done a good job of taking online poker and online casino play and turning them into core customers.

"You should be more demanding in your questions about sports betting because the percentages are low," Brennan said. "But there isn't a product category (or) a content category that is more popular and crosses more demographics than sports. That is why everyone on the Strip has a sportsbook, because it brings in people. There isn't an empty room during the Super Bowl or the NCAA tournament. It is something you ought to be demanding as we move into this category: how do I make this happen for my property. It's not just the revenue, but how we make this a core part of my business."

Charles Cohen, vice president of North American sports betting for IGT, said sports betting is an "incredibly complicated and difficult business to run," but said tribal casinos shouldn't be worried about the risks involved any more than they are about slots or roulette play.

"If you do it right," he said, "it is the most tremendous opportunity there is in gaming in this country in the next 10 years, without a doubt."

Cohen said the fear about risk largely stems from media stories about the guy who walks out of a casino after making a large cash wager.

"The best marketing that the sportsbook industry has come up with is that it looks like you can take them to the cleaners," Cohen said. "That is how you sell the product. Few sportsbooks go bust, because a single bet really doesn't matter. What matters is the volume. It's not risk management, it's content management. If you have enough liquidity and enough players, and broad enough offerings, it should not be much to worry about."

Conrad Granito, general manager of the tribal Muckleshoot Casino in Washington State, pointed out that any concerns about risk largely stem from the fact that the vast majority of tribal operations are in small rural environments. Those properties will have a limited betting audience unless there is some mobile betting allowed.

Brennan said it is some people's interest in the industry "to play up the risk part, because they want to scare you (and) make sure you don't want to do this on your own and want to engage a competent partner. Which you should."

The challenge for Indian country depends on what happens in the Supreme Court, Granito said. Many observers expect the federal law to be overturned, which would mean the decision goes back to the states.

"Therefore, in Indian Country you'll have to go back to your compact," Granito said. "The challenge will be what your current compact allows, and how the negotiations go."

Tribes are going to want "some sort of exclusivity" to offer sports betting and won't want any oppressive regulation that keeps it from being viable. But, Granito said, "... in any state where the tribes are involved, you are going to have non-tribal interests that are going to want participation."

This article is a reprint from CDCGamingReports.com.  To view the original story and comment, click here. 


Sign-up for the OSGA Newsletter!

Every week get news and updates, exclusive offers and betting tips delivered right to you email inbox.