August 14, 2018
An Analysis: The Industry's First Steps in a World Without PASPA
by Brian Wyman, Ph.D., Principal, Innovation Analytics

In the nearly four months since the Professional and Amateur Sports Protection Act (PASPA) was struck down by the U.S. Supreme Court, we've seen operators, legislators, tribes, and vendors work hard to forge partnerships, understand and shape legislation, and start to realize the potential of opening the sports betting market. The following summarizes key themes The Innovation Group (TIG) has seen emerge in this short time and serves as a jumping off point for operators thinking of making the leap into sports betting. 

A Time for Advocacy 
I was honored to join the "Gaming" panel at the Oklahoma Sovereignty Symposium earlier this summer. The Symposium (and indeed, even the panel) focused on several important tribal issues, and National Indian Gaming Commission Chairman Jonodev Chaudhuri referred to the present as "a time for advocacy." He was speaking very broadly, but this is an important idea that applies to today's sports betting landscape. Operators and legislators need to be aligned on how sports betting operations will work to ensure success for all parties and to meet all expectations. Notably, as of this writing, only Parx has applied for a sports betting license in Pennsylvania - a state with 12 casinos, one of the first states to legislate sports betting, and a state with tremendous competitive pressure from neighboring jurisdictions. Sports betting is operating in New Jersey and Delaware, while West Virginia and New York have legalized sports betting and are working through their regulatory frameworks. Clearly, the operators' lack of enthusiasm is a response to Pennsylvania's $10 million licensing fee and 36% effective tax on sports wagering - most states are enacting tax rates around 10%. And tax rates are not the only meaningful issue. What are permissible events to wager on? Will states commit to enforcement against black market operators? What will be the treatment of online skins? Who will be allowed to have licenses? What's the plan for mobile rollout? Operators and legislators must come together to develop a framework that works for everyone. 
Sports Betting, Compacts, Ball and Dice Ops

INN-SIGHTS from OIGA CONFERENCE & TRADE SHOW

Sports Betting
Tribal operators are undeniably excited about the opportunity around sports wagering, but many are unsure about how to leverage it, wondering whether it will be worth the effort, development and square footage, especially in smaller, rural operations. There was broad opposition to the idea of integrity fees, debate over reasonable exclusivity fees, and uncertainty around risk management and the benefits of partnering. This didn't dampen the enthusiasm, however, around discussing how soon bets on the Sooners would be available.
 
TIG's Take: Oklahoma could represent the only opportunity in the United States to immediately offer sports wagering under a European-style retail distribution model. Our market and customer research in more than 20 U.S. states indicate that this model is the most efficient from a demand standpoint and could lead to the highest level of sports betting per capita.

About The Innovation Group:

The Innovation Group has long been recognized as the world's most respected and sought-after research and advisory firm, specializing in the gaming, entertainment, hospitality and leisure industries. To date, our research and analyses have driven over $100 billion in investment decisions across more than 80 countries and six continents. The Innovation Group's accuracy and reliability is unparalleled, with our forecasts historically tracking within 5% of actual revenues across the most complex of gaming jurisdictions throughout the globe. 
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The Innovation Group



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