Sports betting legalization may cost the average everyday bettor.
I found it shocking buying strawberries last week. Five dollars for a small package that cost $2.99 only a month ago. Was there a recent drought in Florida or California? Was I unaware the pickers have gone on strike? Instantly I realized if I wanted my beloved fruit I had no choice but to pay the price. A similar principle may follow making a typical legal bet on the Seahawks -3.5 over the Lions in 2018 IF PASPA (The Professional Amateur Sports Protection Act) is overturned after the upcoming December 4th hearing by the U.S. Supreme Court.
Simply put, the economics of business will not allow licensed casino venues the same opportunities to make a profit to what exists now, legally or illegally. So, akin to those strawberries, it might be impossible to offer sports bettors the traditional "dime line" as it's been known for decades. That is, a customary ten percent profit for each wager, allowing for exceptions depending on certain games. In a perfect sports book world, every game would receive even action, guaranteeing a ten percent return on an average football, basketball event, etc. Of course, parlays and more exotic wagers would live on for exponential operator profit, allowing the bettor a greater dollar return like a trifecta in horse racing.
But unlike a typical preferred offshore sportsbook operator, a projected new licensed U.S. legal sportsbook operator will have to absorb a plethora of cringing costs within each bet they take. To start, an expected giant licensing fee, plus an anvil tax rate that neither offshore sportsbooks or for that matter, even legal Nevada sportsbooks currently face.
And that's merely where the "pie cutting" may begin. All four U.S. sports leagues have not formally endorsed legalized sports wagering in this latest and final Supreme Court appeal. The case title may read Christie vs. the NCAA, implying the State of New Jersey. However, the issue truly is in defense of all U.S. states individual rights to permit legalized gambling. Beyond that, many legal experts have framed this historic appeal a landmark case for U.S. individual state rights, with sports wagering only serving as sample subject matter.
The Real Super Bowl
While most everyone has conflicting opinions on how this case will rule, all are unanimous on one subject. The most important opinion and power force determining the eventual decision is the National Football League. It is their powerful legal defense, hold on our economy and lobbying connections in Washington D.C. that always have and always will be the primary force driving the eventual verdict. While the NBA, MLB and NHL do indeed hold important voices in this issue along with the NCAA, the NFL remains by far, the staunchest hold-out reversing this 1992 federal law. They continue to viciously fight for their sacred "integrity of the game" as priority one. But, defining their billion-dollar cut within repealing this law is truly the backbone of potential progress. And the most important cloud in assuming we will read "PASPA Repealed" in April or May 2018.
Japanese Surrender, End of WWII
That was likely the most famous U.S newspaper. headline of all-time, signaling the end of World War II. A similar stunning headline will greet many in the sports world, bettors and all in the gambling industry IF the Supreme Court does repeal PASPA. It will begin a new set of rules for legalized sports wagering in this country. Suddenly we could hear announcers talking about game and Over/Under lines on ESPN and Monday Night Football pre-game as readily as injury reports. What would come next is anyone's guess at this moment as a long list of laws governing the application would have to be drawn up.
What is certain is by laws of economics that many new powerful forces will be vying for the percentage share of revenue, including Federal and/or State government agencies. Also, the new necessary jobs being created along with expanded sports wagering facilities will require expensive overhead capital. Add in many new ancillary costs that will be difficult to calculate until operations exist. All-important without forgetting the costs of appeasing the NFL, MLB, NBA, NHL, etc. and protecting their number one priority of concern. The integrity and honesty of the games. That is why PASPA principally was written into law along with the more governing Wire Act of 1961.
Full Retail Pricing
Timing may be very interesting here. As a potential comparative example, we've recently learned that Pennsylvania has passed a law for both online gambling and to expand VLT's into several bars, truck stop and airport locations within the state. However, operators will be taxed at the exorbitant rate of 54%, plus pay extremely high licensing fees.
Comparatively, their neighboring state New Jersey currently taxes operators online at just 15%. Do you think this rate will show up in a potential difference for PA online and on-site players opportunity to win and show a profit? You can bet the house on it. And sadly, many who live in Pennsylvania will do just that very soon.
Looking into the crystal ball, a similar scenario could translate into paying -120 to -130 for betting the beloved Dallas Cowboys or Pittsburgh Steelers in New Jersey or another state welcoming U.S. legalized sports wagering in 2018. Or perhaps +480 for a three-team parlay compared to the traditional 6-1 offered by major offshore sportsbooks or legalized Nevada sportsbooks as alternative options.
By the way, I stubbornly passed purchasing those delicious strawberries at five dollars. Through experience, I knew the price would eventually go down soon if they sat on the shelves long enough to spoil.
Will bettors feel the same way about legalized gambling in the U.S. or will they be more than willing to pay -125 for that typical Seahawks-Lions game? Although with defined risk they would likely have another option at a much better price. Time will tell but first we wait for the Supreme Court to tell us if we have the right to go shopping.
Glenn Greene covers the games from a betting angle every week exclusively at OSGA.com. For weekly betting insights, inlcuding previews and picks from Glenn, click here.