Scott Longley rounds up the conference highlights from Day 1 of G2E, which saw ongoing tensions between the leagues and sports betting states surface and stakeholders discuss the operational fall-out from the DoJ’s recent reversal of its 2011 Wire Act opinion
The continued tensions between newly regulated sports betting states and the major sports leagues were given an airing on the first day of G2E yesterday.
Speaking on a panel at the Sands Convention Center yesterday, current director of the New Jersey Division of Gaming Enforcement (NJDGE) David Rebuck suggested that their cooperative approach to working with the major sports leagues had received a mixed response.
Rebuck was responding to a prompt from George Rover, a former New Jersey assistant attorney general and deputy director of the NJDGE and now chief integrity office for the Sports Wagering integrity Monitoring Association (SWIMA), agreeing with Rover that regulators would inevitably finding themselves “quarterbacking” on sport integrity issues.
However, Rebuck added that “actions speak for themselves” and after having won the PASPA case in the Supreme Court with the leagues on the other side of the argument, New Jersey had determined “not to gloat” and had approached the leagues on how to proceed for the good of both the gambling sector and the sports leagues.
“For some it has been much more successful than with others,” he told the audience. “We are still going to keep working at it. We have had wonderful dialogue with the NBA; we brought to their attention what we thought were appropriate bets.
“But other leagues, their instant response was ‘what are you going to for us now?’ I didn’t respond, but my initial reaction would have been what have you been doing for the past 50 years to stop match-fixing? The regulators can’t do this by themselves.”
Sandra Douglass Morgan, chairwoman at the Nevada Gaming Control Board agreed, suggesting the regulators could take on an “educational role.” “We’re in the best position to understand how to best protect the industry,” she added.
Rover added that the message the sports needed to understand was that co-operation with the regulators and the industry would be the key to safeguarding integrity. This is particularly the case with in-play betting and Rebuck said there was still work to do in laying the foundations for identifying and dealing with the risks in this area.
“In-play in its infancy stage; it is minimal compared to the UK,” he said. “The business models, the legislative models, the regulatory models are more weighted towards traditional sports wagering. With that being said, the technology will drive this.”
One area of sports betting in the US that has excited much controversy is the position of the National Collegiate Athletic Association (NCAA) which has to date yet to sign a data deal with any of the major providers and maintains its fiercely anti-gambling stance.
Jan McDaniel, deputy director, Mississippi Gaming Commission, noted, for instance, that the state had decided against allowing prop bets on NCAA games due to integrity concerns after a request from the association.
“They asked us to limit prop wagers, and we did,” he said. “We allow it for NFL but not for amateurs. I think that’s a good thing. That’s the dialogue I talked about. What we do now, is if we do see things, we talk.”
Wire Act worries
A later panel addressed the ongoing debate regarding the Wire Act and the 2018 reversal of its 2011 opinion from the US Department of Justice (DoJ). Noting the centrality of payments to the online space, Andrew Crowe, vice president for market development at Worldpay Gaming, said it was encouraging that in the wake of the DoJ announcement “nobody panicked”.
He added: “Banks are getting comfortable (with online payments for gaming and wagering) with this market now, within reason”.
Ho also noted that American Express – which to date has not allowed any gaming transactions anywhere in the world – was now piloting with one operator in New Jersey. “They are sticking their toe in the water,” he added.
Danielle Boyd, head of government relations for William Hill, added that the impact of the DoJ Wire Act reversal on state-level conversations had been “minimal.”
“Largely, most states understand that there was a new opinion, but they have taken a wait-and-see approach,” she said. “It has not largely affected how legal operators are doing business.”
As to the added wrinkle of interstate routing – that is the vexed issue of intra-state transactions being enabled by online transmissions that were actually interstate – Boyd said that William Hill’s position and that of their rivals was that it did not apply.
“Much like other legal operators, we have gone with the opinion that sports betting is an intra-state venture,” she said. “In that sense, we haven’t had to alter course; we have just proceeded as necessary.”
Melissa Riahei, president at SBTech US and previously the deputy chief counsel to the Office of the Governor in Illinois and then general counsel to the Illinois Lottery, said that its operations in the US were “as intrastate as possible.”
“On intermediate routing, there are some ambiguities,” she added. “It did have people scrutinise the operations more; now a lot more attention is being paid. But at the core, the whole intermediate routing doesn’t make sense as the DoJ was attempting to interpret it. It would cripple the lottery market, for instance.”
Asked whether the advent of expanded US sports betting had hindered the development of online gaming, Crowe said that actually the fact of sports-betting in the 10 states since the fall of PASPA had been beneficial when it came, in particular, the attitudes of the financial services sector.
“Having sports in the mix makes this of a scale (the finance sector) can’t ignore,” he added. “It represents tremendous volumes. They need to be on top of this. Sports has brought the scale and visibility that make it unavoidable for the financial services.”
Moreover, he added that once states had decided, in effect to “crack open” the statute books for sports betting, it provided an opportunity to take a look at opening up other gaming verticals as well. “It’s like getting under the hood of your car,” he said. “Once you are there, you might as well deal with all the problems at once. Sports has been very beneficial.”