Top gambling stories in 2021
It seemed that nothing could get worse for the gambling industry than 2020. Last year was filled with frustration, confusion, and problems for the industry as land-based casinos were forced to lockdown for a brief time due to the COVID-19 pandemic and sports leagues were forced to play in bubbles and in front of empty stadiums as there was fear of how the virus would spread in crowded environments. The end of 2020 saw some relief as some states began to reopen although it was clear it was anything but normal. 2021 finally saw things pick up thanks to vaccines, but new variants of COVID-19 in recent months has created a situation where old is new again. To that end, many of the top gambling stories in 2021 will still be related to the ongoing pandemic although COVID was far from the only thing affecting the industry. Tribal gambling, amateur athletes, horse racing, new states entering the sports betting market and the death of an industry mogul also made the headlines. The following are OSGA’s top 10 stories of 2021.
10. Reopening of casinos with a mishmash of rules and a change in gambling limits
After casinos closed for much of 2020, every state finally reopened casinos in 2021, although rules for reopening varied. For the first part of 2021, before vaccines were available, most states required everyone to wear a mask in the casino except when eating or drinking and almost every casino took down names and phone numbers at the door for contact tracing purposes in case an outbreak at the casino occurred. Rules began to be relaxed by the spring as vaccines quickly rolled out and in many blue states vaccine mandates were put in place where a person was required to either show proof of vaccination to enter the premises or proof of a negative test within 48 hours of entering the facility. Other states, such as Connecticut and Pennsylvania, had separate rules depending on vaccination status. If a person could show they had both vaccines, then they could play in the casino without a mask or distancing, but those without vaccines were forced to wear a mask at all times and were monitored closely to ensure compliance. In some cases, unvaccinated patrons were also put in a separate area from the vaccinated. Plexiglass between players at slot machines put up in 2020 were mostly removed and the social distancing initiatives created, such as closing every second machine and limiting tables to three players, were lifted as well.
Despite the removal of most regulations, many players noticed that casinos which raised limits at tables to crazy levels in 2020 citing social distancing and corresponding lower income as the reason, never lowered them when most restrictions were lifted. Most table game players noted that $25 became the normal minimum bet even on weekdays and $5 tables were all but gone. It seemed most casinos deemed low limit players not worthy of their time. Moreover, many casinos closed games that were less profitable to them such as Let It Ride, Caribbean stud and Pai Gow Poker and instead increased the number of tables for games such as baccarat where the casino have a much higher hold. Some players even noted that unless you were a baccarat or blackjack bettor there was nothing at most casinos for you. Sportsbooks for the most part saw good action, although most sports bets were placed online.
By the summer the Delta variant took over throughout the U.S. and COVID cases started rising again. The variant was far more contagious than previous variants and almost every casino started issuing vaccine passports and mask mandates to enter. Nevada, which saw a particularly large rise in cases and was among the first states to lift COVID restrictions, mandated masks for everyone in order to play in Las Vegas casinos and the boom that took place early in 2021 quickly declined. Along with the mask requirements, the federal government put in a vaccination requirement to travel to the United States and Las Vegas visits dwindled again. The rest of 2021 saw ups and downs for the industry as most casinos adapted to the new normal, although the Omicron variant which took over in December has led to exponential new cases along with new restrictions. Casinos have all said that things were better in 2021 than 2020, but things are far from normal, and still a struggle.
9. NFL Playoff and College Bowl implications from COVID cancelations roster changes due to the omicron variant
In November it appeared that there would be no major implications of COVID-19 on professional and amateur sports. The Delta variant was still prevalent, but it was not affecting many players and the leagues seemed to have things under control. That changed dramatically when the Omicron variant, first discovered in South Africa, started ravaging North America in mid-December.
While not as deadly as previous variants, it spreads like wildfire and the rules for both professional and amateur leagues require that players with any form of COVID must sit out for a set period of time. Consequently, the NCAA has seen five bowl games canceled as of this writing because of the number of players in COVID protocol and it is expected that other games will be affected as well. Also, in the amateur realm The USA had to forfeit a game to Switzerland in the World Junior Hockey Championships, then the tournament was forced to be cancelled altogether, after it had already started and most women’s sports were canceled in January, meaning for the second straight year there will be no women’s hockey championship played.
As for professional sports, league rules may result in major playoff implications and teams have had to pull out of major tournaments. The NHL has been canceling most games where there has been a COVID outbreak, which is only possible after the league announced that NHL players will no longer be allowed to play in the Olympics, so the cancelled games can now be made up in the two weeks when the Olympics take place. The NBA and NFL, however, have told teams they must play regardless of outbreaks, and it has had major implications. In the NBA, teams are allowed to sign replacement players without it affecting the salary cap, but since good players on the free agent list are few and far between teams have been looking to the G-league and other lesser options to fill rosters. The Toronto Raptors, for example, played without 10 starters on December 26th, instead calling up players from the G-league and they got trounced by the Cleveland Cavaliers 144-99, which could have playoff implications, as the Raptors are close to the .500 mark. Similarly, teams like the Philadelphia 76ers, Orland Magic and Minnesota Timberwolves are also in COVID trouble and have been desperately looking for replacements.
While the current situation is frustrating for the NBA, it is even worse for the NFL, since there are fewer games and the playoffs begin in January. Green Bay was forced to sit Aaron Rodgers when he lied about being vaccinated after catching COVID-19, Cleveland was forced to sit Baker Mayfield and New Orleans was forced to sit all three of their starting QBs, putting in Ian Book as a desperation move. They lost to Miami which could have cost the .500 team at the time any chance of making the playoffs. And teams are constantly being forced to sit star players after a COVID outbreak. The NFL has lowered the inaction period for vaccinated players, but most still must sit out. One writer said it best when he wrote, "all teams are in the same situation, but it’s disgusting that teams will make or miss the playoffs simply because star players with no symptoms are forced to sit while Mr. Nobody takes their place." Because of the implications on such major events and the playoffs, COVID cancelations and roster changes is the #9 story of 2021.
8. NCAA changes rules to allow players to benefit from the use of their names and image
For years the NCAA and student athletes were in a fight over allowing players to be compensated for use of their name, image and likeness on merchandise, advertising, and video games. The players said that their name and image belong to them, and the teams were wrong to exclude them from benefitting from its usage. The league, on the other hand, insisted that players are compensated fairly with scholarships, board, and meals, living allowances and textbooks, which in some schools could add up to several hundred thousands of dollars over a 4-year term. The case eventually went to the courts and in 2019 the PAC-12 gave in and allowed the players to benefit, after Governor Gavin Newsome signed a bill called the Fair Pay to Play Act mandating California teams to allow players to benefit from name, image, and likeness. The NCAA told Newsome they were trying to protect the notion of amateurism, but Newsome countered that he was more concerned about student welfare. It became clear that the league was fighting a losing battle, so in June of 2021 the NCAA changed the policy league wide to allow players to benefit across all three divisions.
In a press release on the NCAA.com site, the league posted the following from Division I Board of Directors chair Denise Trauth, president at Texas State.
"Today, NCAA members voted to allow college athletes to benefit from name, image and likeness opportunities, no matter where their school is located. With this interim solution in place, we will continue to work with Congress to adopt federal legislation to support student-athletes."
The league made it clear this only applies in states where there were no laws prohibiting players from profiting, although they vowed to work with Congress and state legislators to make it consistent league wide. The league also made it clear, however, that under no circumstances will players ever get paid to play, and if they do so, then they lose their amateur status.
While this is great news for star players, it does little for 2nd and 3rd string players who will likely never benefit from the new rules, as there will be little demand for their name or image. That is what concerns many gamblers and apparently some sportsbook managers who feel that some lesser players may get involved in illegal activities such as point shaving to level the playing field. In countries where amateur athletes are allowed to profit, and sports betting is legal, there have been incidents that required the leagues and books had to investigate the matter more closely. And many large college bettors in the U.S. have indicated they are so concerned about game fixing that they may not bet on college sports again. While that is unlikely, the fact that the NCAA did a full 180 after insisting they would never allow players to make money off their sport while in school makes the new NIL rule the #8 story of 2021.
7. The confusing and expensive method of awarding sports betting licenses in New York
When New York announced it would be tendering bids for online sports betting licenses, sportsbooks across the world were licking their chops, dreaming of riches beyond their reach. Then in July, Governor Andrew Cuomo announced a that he wanted a 50% minimum tax rate and complicated it with a confusing method of choosing the winning licensees, leading to the excitement waning. There were several factors to determine winning bids, but the only one that really mattered was the agreed to tax rate built into a large matrix. The matrix effectively would require a 60% tax rate if only four sportsbooks were licensed, but it dropped as more licenses were awarded. To make things more confusing, the state put out a document with the rules for applying for a license that only legal minds could figure out. The most confusing part were sections related to platform operators and platform providers. The difference between the two is the platform operator hosts the platform providers, but the platform providers are the actual sportsbooks.
After some lawyers and linguists figured out what was being proposed, different companies partnered up on bids and six operators came forward to tender a bid. They included Bet365, Foxbet and The Score operating as independent bidders, meaning they were both operator and provider. And there were three super bids, with DraftKings submitting a bid on behalf of themselves, FanDuel, BallyBet and BetMGM; Kambi submitting a bid as operator on behalf of BetCaesars, WynnBet, BetRivers and PointsBet; and Kambi submitting a third bid on behalf of Barstool Sports, Resorts World and Fanatics Sportsbook. It was expected the state would likely choose DraftKings and set a 60% tax rate, but the state surprised everyone and agreed to award both the DraftKings bid and an amended Kambi bid that included Resorts World, Caesars, PointsBet, WynnBet and Rush Interactive which operates out of Rivers Sportsbook. Consequently, with nine platform providers winning bids, the tax rate owed to the state on revenue is 51%.
While all platform providers stated how pleased they were to win the bid, behind the scenes many operators have stated they do not know if they can make money at that tax rate. In states with far lower tax rates, operators have struggled to keep their heads above water, even as sports betting revenues have been higher than expected in almost every state. So, even in a state with 20 million residents it could be tough sailing for sportsbooks in New York. And to make matters worse, with 9 operators all vying for the same dollar there is some concern that the revenue for each independent operator may not be all that high and cutthroat tactics to win bettors could eat away at profits as well. Nevertheless, New York is by far the largest state to offer legal sports betting so the decision to award online licenses is the 7th top story of 2021.
6. The death of Sheldon Adelson
At the beginning of the year, news came out that Las Vegas Sands owner and CEO Sheldon Adelson passed away at the age of 87. Adelson made a name for himself in gambling in 1988 after he purchased the Sands Hotel and Casino in Las Vegas and on that property and adjoining lands he built the Sands Convention Center and later the upscale Venetian and Palazzo hotels and casinos. After more investments and taking the LVSC public, Adelson became a multi-billionaire and eventually one of the richest men in America. Adelson also built a hotel and casino in Pennsylvania and on the advice of a businessmen he submitted a bid for a hotel in Macau, along with The Philippines. LVSC eventually built four very profitable casinos in Macau and Adelson’s wealth just continued to grow.
While Adelson was important to the gambling industry because of his business dealings, he was also known as being very outspoken, which led to him being in trouble with both the Chinese government as well as U.S. legislators. Adelson had to defend himself in court many times and he was willing to defend the Las Vegas Sands and his name whenever challenged.
Adelson was also a major reason for the change in how Las Vegas treated gamblers. Adelson said that giving comps to smaller players was not good business, so he announced that he would only give comps to the highest rollers and everyone else had to pay full cost for their hotel rooms, entertainment tickets and food at the Venetian and Palazzo. Adelson made his case to other casino owners and consequently casinos moved away from giving out comps and instead made gamblers earn them over time with player loyalty cards.
Adelson was also very opposed to online gambling. While every other casino company was looking at how to use the Internet to help them increase profits, Adelson apparently decided that he could not compete online and that his bread and butter was in land-based gambling. Therefore, he made it his mission to try and stop online gambling.
He hired on many Republican backers who were beholden to him due to large donations that he made to Republican candidates throughout his life and had them introduce a bill called RAWA (Restore America’s Wire Act). The goal of RAWA was to pass a federal law to repeal the 2011 Department of Justice opinion that Internet gambling was legal, and instead issue a new law that only the 1961 Wire Act was applicable, which mandated bets by any communications method including the internet was illegal. Adelson did everything in his power to get the law passed, although it was clear it was an uphill battle. The DOJ under Donald Trump did try to change the 2011 decision, but it was defeated in a New Hampshire court and never was heard from again after Joe Biden won the 2020 election. With Adelson now gone there is speculation that the board of the Las Vegas Sands will look more closely at online gambling and how it can benefit them. They are also apparently rethinking the venture in Macau, since many believe it’s a bad look for the company due to the corruption in the country, as well as new rules in the coming year that will increase Chinese oversight of Macau operations. Some analysts believe LVSC may not ask to renew their Macau license.
The loss of such a major force in gambling in the United States makes Sheldon Adelson’s passing the number six story of 2021.
For the rest of Hartley's list of the Top Gambling Stories of 2021, including the top story of the year, click here.
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