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G2E day 2: Christie steals the show

Insight | Analysis

The second day of this year’s Global Gaming Expo in Las Vegas found former New Jersey Governor Chris Christie in a combative mood, arguing that professional sports leagues had no right to so-called integrity fees from legal wagering. 

Christie, who led the fight against PASPA in the Supreme Court, said the leagues don’t deserve the opportunity for a “do-over” via federal oversight and integrity fees on sports betting. Having lost the fight, they shouldn’t be rewarded, he argued.

Opening up G2E yesterday (October 15), Christie railed against the potential for the major leagues, which had sat on the other side from him in the Supreme Court case, being able to dictate terms from here on in.

Chris Christie

“I think an integrity fee is a wrong-headed idea and any state that get into that would be giving into extortion,” he told the audience at the Sands Convention Centre.

He added that early in the legal case with New Jersey, the leagues had the opportunity to “cut a settlement” that would have likely entailed the state agreeing to an integrity fee.

“Maybe we would have gone for an integrity fee; they decided to roll the dice and they lost and we should not reward them for that,” he added. “But neither should they be penalised by stopping them selling their data rights.”

Christie’s comments came on the same say that Fox Bet became the latest gaming company to announce it was to become an authorized gaming partner of Major League Baseball (MLB). As part of the deal, Fox Bet now has the right to use MLB’s official data feed and the official league trademarks for use on its sports-betting and free-to-play apps.

To widespread applause from the audience, Christie added that adding federal oversight would be an “absolute loser” and to avoid that fate, the industry should throw its weight behind “rigorous, responsible state regulation.”

“[The] growth of sports betting is on the regulators,” he added. “If you prevent a scandal the Federal government won’t have an excuse to get involved.”

During a later panel discussing the rollout of sports betting in the US, Robert Wallace, deputy director at the Delaware Division of Gaming Enforcement, noted that from a law enforcement perspective it was clearly wrong for the Federal authorities to believe that there wasn’t already cooperation between neighbouring states on gaming issues.

“The same thing with the operators,” he added. “(The cooperative infrastructure) is already developed and I’m not sure adding a further layer of federal action is the best route to take.”

Even blunter words of warning came from Vic Salerno, president at US Bookmaking, who said that efforts towards instituting mandated data were “ridiculous” and a “money-grab on the part of the leagues.” 

“As far as integrity is concerned that is a bunch of BS,” he added. “We take the risk to make their product more interesting.”

A popular pastime
The event was kicked off with a speech from Bill Miller, chief executive at the American Gaming Association (AGA), who pointed out that since the fall of PASPA, $11bn had been wagered on sports-betting and quoted figure from analysts at Morgan Stanley that predict $216bn will be wagered by 2025.

He added that public perception of gambling in the US had never been so positive. “The more the US public sees us, the more they accept us. Perception has never been more positive. 90% see it as a mainstream entertainment option.”

Miller cited evidence from a new survey conducted on behalf of the AGA by the Mellman Group which found that 49% of all adults had a favorable view of the industry, up 4 percentage points since last year.

The survey noted that with the advent of regulated sports betting in the District of Columbia, 43 states now had some form of gaming available within their state. 

“The legalisation of sports betting has positioned us further into the spotlight,” Miller added. “The eyes of every political leader will be on us. We pushed hard to overturn PASPA because we saw the benefits and the dangers of the predatory offshore market. Sports betting will be the showcase.”

Governor Christie pointed out in his presentation that the decision for a state to offer wagering was a freedom of choice issue.

“States don’t have to have sports betting, but this is about freedom of choice. You don’t want it, don’t vote for it. But you should have the choice,” he said.

He added the whole PASPA case had been fought on the issue of states’ rights and now the states and the operators had the opportunity to “turn it into an entertainment engine.”

“Sports betting is exploding,” he continued. “It brings an extra level of involvement and enjoyment. And they shouldn’t have to risk going to illegal, sketchy offshore websites in order to do it.”

Nevertheless, not all states are equal in taking up the sports-betting challenge. Noting that Pennsylvania had instituted a tax regime that is deemed as being far too high – the state has a tax rate of 36% and charges a licensing fee of ¢10m – Christie said the sports betting regulatory process in that state had become a “rolling dumpster fire.”

“People from Pennsylvania now drive into New Jersey to bet, because Pennsylvania did all the wrong things. They set the tax rate too high (and have) ridiculous licensing fees… It’s preventing the industry from making things broadly available. And the industry won’t make the investment necessary.”

But he issued a last warning to both operators and states to work hard to ensure that on integrity, the industry did its utmost to ensure that regulated sports-betting didn’t turn sour on the legislators.

“I don’t want to have fought this fight for six years for it to turn it into something bad,” he said. “Don’t let me get hit by the truck coming from the other direction.”

Chris Christie Image: Wikimedia Commons