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IMEGA Speaks Out On US SportsBetting
4/6/10 - The chairman of the feisty Interactive Media Entertainment & Gaming Association, Jo Brennan Jnr., has encouraged New Jersey politicians to legalise online sportsbetting in the state as the legislature conducts hearings in order to hear opinions on the issue.
Writing under the banner "Public Hearing on Sports Wagering, Atlantic City", Brennan remarks that there is no need to conduct a treasure hunt in order to find substantial funds in sportsbetting, which he notes is "everywhere, in full view, for all to see."
He specifies the extensive coverage that sports betting achieves on a regular basis in both dedicated and mainstream media, describing it as
"...as common as information for the stock market - and probably more widely read, even on Wall Street."
Brennan opines that the state of New Jersey, and in particular its currently struggling gambling mecca Atlantic City, would do very well by reaping substantial tax dollars, creating jobs and, most importantly, helping drive visitors and revenue at the local casinos, if it were to regulate sports betting. He examples this by pointing to the benefits accrued by Las Vegas, where sports betting is permitted and events occurring far away attract gamblers wanting to wager and spend money on other Vegas attractions in the process.
"Direct revenue from the wagers is magnified 10x by the economic halo effect of drawing hundreds of thousands of visitors - many from the tri-state area of New York, New Jersey and Pennsylvania - out to the middle of the desert to place legal, regulated wagers on the games," Brennan points out.
"And here, in Atlantic City? Unfortunately, there will not be that same influx of visitors and revenue, because regulated sports wagering is not permitted in New Jersey."
The iMEGA chief goes on to quote the final report of the National Gambling Impact Study Commission, which back in 1999, estimated that sports wagering in the US represented an underground economy approaching $380 billion, largely provided by organised crime, local street-level entrepreneurs and peer-to-peer, between friends.
"Since that report, all the way back during the Clinton administration, we have seen the explosion of the Internet, the boom of fantasy sports, and an ever expanding universe of televised sports. Given that, it's hard not to imagine that sports wagering - as an underground economy - is approaching a Half-Trillion dollar market. And, Atlantic City and New Jersey is getting nothing out of it," he comments.
But it could, he adds.
"Estimates peg a state-regulated sports betting marketplace to be in excess of $10 Billion. A sizeable chunk - more than $3.5 Billion - could be realized by Atlantic City's casinos," Brennan writes.
"Given the population density of the state, its position in the Northeast Corridor and less-expensive transportation options when compared to Las Vegas, Atlantic City could see a significant stimulus to its resort casino economy if state-regulated sports wagering were permitted.
"Instead of low occupancy levels during Super Bowl weekend or the NCAA tournament, Atlantic City would become the place to be on the East Coast during those periods."
However, Brennan cautions that state regulated sports wagering is not a single, silver bullet remedy to all of the challenges facing Atlantic City. "But it can be part of the solutions needed to reverse the town's fortunes by providing a stimulative effect. More traffic means more dollars means more jobs. Atlantic City's casinos would be able to renovate their properties, and new properties being constructed would have an additional pillar on which to base job creation and ongoing success."
Brennan then gets to the real meat of his argument - Internet gambling.
"Our association comes at this issue from the vantage point of the Internet," he writes. "Online operators would like to find a home in the US, as it represents the world's largest market for them. Enthusiasm for New Jersey as the world hub for Internet gambling is high, ironically, because of the state's reputation as the toughest regulatory jurisdiction in the world.
"Operators that can meet NJ regulators' standards and licensing requirements would become the most valuable companies in the sector, and be rewarded with consumer trust, access to capital markets to help them grow, and the opportunity to become public corporations offering shareholder value.
"Atlantic City and New Jersey, if it chooses, could become the global capital of "the Next Gaming industry", a hub for online commerce, as well as the high-tech jobs and infrastructure investments it would create. The integration of this new, high-tech industry with Atlantic City's resort casinos would be a powerful vehicle for driving foot traffic and revenue in this town.
"Some suggest that sports betting in New Jersey be limited to the casinos. That would be a fine plan if this were 1980, and not 2010. To suggest that sports wagering be limited in that way would be to ignore what the Internet and technology has accomplished in the last decade. Instead, we should work hard to integrate the online market with the offline, Atlantic City resort casino market in a way that drives growth for both, and significant tax revenue for the state."
Brennan goes on to attack the arguments put forward by professional sports leagues that sports wagering could undermine the integrity of their games, saying: "That is an argument that cannot be logically sustained. So what the leagues are saying is, in effect, 'leave this marketplace underground'.
"Does that make sense? Can anyone really believe that leaving this underground economy to organized crime and street-level operators would be preferable to state regulation? No. Precisely the opposite is true. Yet the leagues continue to make this illogical argument, and probably will all the way up until the point where they sign lucrative revenue sharing agreements with betting operators like they have in European soccer."
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