SEX 22 DE SETEMBRO DE 2017 - 05:01hs.
Ewa Bakun
OPINION - Ewa Bakun, Clarion Gaming’s Head of Content

The consumer wants, the consumer gets

Ewa Bakun, Clarion Gaming’s Head of Content, explores failings of sports betting bans in the USA and Brazil in advance of Sports Betting USA conference that will be head in New York City next November.

The consumer wants, the consumer gets

The passage of the Professional and Amateur Sports Protection Act, known as PASPA, in the United States in 1992 was intended to root out sports betting in the name of protecting the integrity of the games. It was pushed by the sports leagues, such as National Football League, National Basketball Association and Major League Baseball, that had been influenced by high profile game fixing scandals and desperate to prevent future corrosion of the games’ integrity, and their image.

25 years after the passage of PASPA, it’s clear the ban hasn’t worked – millions of dollars are wagered in the United States and bets are taken across the country by networks of bookies and by off-shore online sites. 97% of betting done during the Super Bowl 51, as estimated by the American Gaming Association, was illegal. And the same leagues that advocated PASPA so vividly, benefit indirectly as sports betting drives up fan engagement and enhances sports viewership.

It’s hard to be surprised: prohibition of an activity beloved by consumers is hardly ever effective, in particular, if its offering can be aided by technology that always develops quicker than regulation. And the evolution of internet technology since 1992 has resulted in a proliferation of online betting sites that are tapping into the demands of consumers, against the law that’s proving increasingly more difficult, if not impossible, to enforce.

The illegal betting, both offline and online, really only benefits financially those who operate it. It circumvents governments that miss tax revenue and the sports that could benefit commercially not just through fan engagement that’s already being enhanced as betting takes place anyway, but through a closer, however fully transparent, relationship with regulated betting firms.

Regulated markets in Europe where teams and governing bodies sell sports data rights and are sponsored by betting brands are an example. Not to forget the cooperation between the sports and betting to detect and report any suspicious betting patterns – not available in markets lacking a regulatory structure to administer that and thus actually putting the integrity of their games at risk rather than protecting it.

Regulated markets in Europe where teams and governing bodies sell sports data rights and are sponsored by betting brands are an example. Not to forget the cooperation between the sports and betting to detect and report any suspicious betting patterns – not available in markets lacking a regulatory structure to administer that and thus actually putting the integrity of their games at risk rather than protecting it.

Prohibition or regulatory vacuum puts the consumer at risk as well. Without a regulatory framework that includes rules for consumer protection, sports fans that place wagers with unregulated bookies really don’t have anyone to refer to in case of disputes, abuse or criminal offence. Opponents of gambling argue against legalisation in the name of the consumer, but a transparent and well defined regulatory framework gives that consumer a chance to enjoy an activity they like (and would seek whether it’s legal or not) in a controlled and guarded way.

The United States are learning once again that prohibition doesn’t work. Instead of focusing on defending or attacking its merits, the discussion should really move on to the consideration of what shape a regulatory environment should take. And there is plenty of examples worldwide to examine and choose from.

Like with any ‘sin’ industry, it’s hard to find a perfect match; each example has its advantages and disadvantages. From centralised sports betting run by monopolies, like in Finland, to fully open and non prescriptive ones, like the UK one. While the former doesn’t fully eradicate illegal betting, the latter is facing a lot of criticism lately for leaving too much freedom to bookmakers. Between the two extremes, there is a lot in the middle – the choice depends on the local stakeholders, culture and consumer preferences.

The battle for sports betting legalisation is gaining momentum in the United States, mainly due to the recent decision of the Supreme Court to review the sports betting case fought for years by the state of New Jersey. And while this isn’t a case of whether sports betting legalisation is good or bad, or whether the current prohibition has been effective or not, but rather a constitutional question around the recognition of state rights, the final SCOTUS decision might unleash a turn of events that will culminate in legal sports betting being authorised there sooner than we thought.

Many state governments, that traditionally have authority to allow any type of gambling should they wish to, have already enacted pro sports betting legislation to be ready for the scenario in which federal prohibition is overruled.

Brazil is also considering legalisation of sports betting. Indeed, the Ministry of Finance announced at Juegos Miami that it was preparing a law authorising sports betting, but needed to study the matter further to understand the type of control that’s needed and the multi-licensing vs. monopoly framework.

In many respects, Brazil is facing challenges similar to those in the United States. Sports betting is widespread amongst its football crazy consumer base, which, in the lack of a legal option, has no choice but to satisfy its need for betting on unlicensed sites. And while implementation may vary with US adopting a more open market approach with multiple licensees, while Brazil is likely to put a limit on a number of operators, what certainly brings these countries together is the size of the commercial opportunity for those suitable enough to win a license to operate.

Ewa Bakun 

 

Ewa Bakun is Head of Content for Clarion Gaming, organiser of ICE Totally Gaming, Brazilian Gaming Congres, Juegos Miami and many other events. She has recently launched Sports Betting USA conference, taking place on November 14-15 in New York City: www.sportsbettingusaconference.com

Source: GMB