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SBUSA Digital: Day 1 round-up

Insight | Analysis

The importance of esports for the future of sports betting, and the National Collegiate Athletics Association (NCAA)’s explanation of how its approach to legal betting has shifted, were among the highlights of the first day of Sports Betting USA Digital.

Esports: A Covid-19 success story but what now?
Ondrej Silhavy, business development manager at esports odds and trading supplier, RTSmunity, discussed the future of esports betting, after the vertical saw a major temporary boost in activity during the novel coronavirus (Covid-19) pandemic.

Silhavy pointed to the growth of esports betting in Europe and Asia and said that, while it may take time to return to the levels reached while traditional sports were suspended, the growth of esports betting in the US should continue.

However, he said that in order for the vertical to reach new heights, regulations need to be more favourable, as many states are currently either ambiguous on the matter or ban bets on esports entirely.

“Some states have specifically allowed esports betting, some states are not saying what their stance is with esports betting and some states that have legal betting on other sports have banned esports betting, there right now needs to be more regulatory clarity on esports betting,” he said.

Despite this, Silhavy added that operators and suppliers need to get involved with esports as soon as possible or risk being left behind.

“But if anyone wants to get involved in esports, they need to start now, because if you don’t then the big players will establish themselves,” he said.

Silhavy noted that there were many ways in which esports customers are different from traditional bettors and that in order to succeed, businesses must know what the esports bettor wants.

“Esports fans are different from traditional wagerers,” he said. “Esports are very different, they’re dynamic, there is constant action. Every player watches streams for free so you need to be able to offer the stream.

“The betting platform needs to be engaging, and players need to be able to communicate with each other, and you need to be transparent, younger customers are afraid of being scammed so there needs to be transparency.”

Preserving the integrity of athletic competition and student athlete well-being: How the NCAA coexists with sports betting
NCAA vice president for law, policy and governance, Naima Stevenson Starks, told Sara Slane of Slane Advisory about the NCAA’s approach to sports betting as the activity becomes more commonplace.

Starks said that the environment of sports betting has changed, meaning it no longer makes sense for the NCAA to fight regulated sports betting entirely as it did when PASPA was first repealed. Instead, it is now working on finding ways to protect integrity and NCAA student athletes within a regulated framework.

“We’re in an environment where our two core pillars have not changed,” Starks said. “One is the integrity of our competition and the other is the health and well-being of our student athletes.”

“Now that betting is more prevalent, that means that there will be increased activity in and around our athletic competition and our student athletes, so we’re working hard to make sure we understand how to protect student athletes and the integrity of competition in an environment with increased sports betting.”

Starks added that while preventing betting on college sports entirely appeared very unlikely, the NCAA was still hoping to make certain carve-outs commonplace, such as a ban on prop bets on individual college players.

“That is one area where our member institutions are keenly aware and hopefully having conversations with our state regulators as laws are being put in,” she said. “With greater access to student athletes, if you think about missing a free throw or a field goal that makes a difference for a potential wager, the close proximity to potential bettors affects things in a way it doesn’t at the professional level.”

The NCAA has twice previously pushed for federal sports betting legislation. However, a bill in 2018, sponsored by Senators Chuck Schumer and Orrin Hatch, died in its early stages. Further attempts by Schumer and Senator Mitt Romney to introduce a bill in 2019, also failed to come to fruition. Starks said federal legislation would still provide some much-needed consistency, but it appears the appetite for such a bill has declined.

“That would be the most desirable scenario,” she said. “There were some pretty concerted efforts right after the repeal of PASPA to try to get that in place.”

“I don’t know if the momentum is still there for that to be on the radar but I do think it would be a strong approach because it makes sense to have something more consistent than the state-by-state approach, especially for an organisation like the NCAA with presence across the country.”

How states are looking to accelerate the roll out of sports betting
The session opened with Cathy Judd-Stein, chair of the Massachusetts Gaming Commission.

While sports betting has not yet been legalised in Massachusetts after a bill failed to pass earlier this year, Judd-Stein said the impact of Covid-19 on the state’s economy has created an appetite for new sources of revenue.

This, she said, would lead to the state considering the legalization of sports betting, as well as making other changes to its gambling legislation to generate as much money as possible.

“They could consider a tax on DFS, they could consider proposals such as iLottery for example, they could examine the fee structure for licenses,” she said. “The bottom line is they’re going to be thoughtful, Covid-19 are on their mind and they’re going to want to create jobs, especially tech jobs and they’re going to want to repatriate any dollars that are going to the black market and any dollars that are going to other states such as Rhode Island.”

In addition, she said the regulator had visited counterparts in other states, in an attempt to learn about the best way of regulating the Massachusetts market. Judd-Stein said that New Jersey and Indiana looked like possible models for Massachusetts’ framework.

“We did last year travel, not surprisingly, to New Jersey, to learn from the very successful program the SDGE heads up,” she said. “We learned about their very complex IT infrastructure, we really like what they did on consumer protection and integrity.”

“Then last month, we had a really good meeting with the team in Indiana led by Sara Tait. We really wanted to connect with them because the scale of the operation there is about in line with Massachusetts. They also had to launch their program in a limited space of time which might end up being the case in Massachusetts.”

Judd-Stein added that while it was hard to know what details the legislature may put into any prospective betting bill, there would be a good chance that efforts will be taken to ensure that marketing messages are responsible, while there may be restrictions on college sports.

“I think that the legislative proposal is likely to include provisions for responsible marketing,” she said. “I think it might also take from some earlier proposals that included protections for amateur athletes.”