Weekly Column: The Growth of Sports Betting in America

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about the growth of sports betting in America among operators, brands, teams, and the potential for pitfalls.   

You can read the full column below.

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There seems to be an ever-increasing interest in sports betting and specifically with relationships to professional sports franchises. Traditionally, these relationships are limited to three categories: jersey or other sponsorships, investment in sports betting ventures (applications or other physical locations like casinos), and some level of brand partnerships for broadcasting (e.g., Bally Sports). Murphy v. NCAA truly opened pandora’s proverbial box. Where that decision takes the sports world is continuing to take shape.

New York Mets owner Steve Cohen is seeking a casino next door to Citi Field where the baseball team plays. It would live right off of the railway and likely be open and especially busy during game times and other major events. It is the first occasion in recent memory where a gambling establishment lives right next door to a sports venue in America—particularly one endorsed by a professional club. The Hard Rock Hotel and the Sands Hotel and Casino are currently in consideration for the project, but there is competition for the land near the Mets-Willets Point substation with Major League Soccer (“MLS”) and the New York City Football Club (“NYCFC”) looking to build a new soccer stadium as well.

The Commonwealth of Massachusetts now joins in as the thirty-third (33) state to allow for sports betting and they have created a legislative and licensing scheme for such use. The Murphy-decision removed the prohibition on states having sports betting, but each individual state had to come up with rules and regulations to allow for gambling. Twenty-one (21) other states have some form of mobile betting, which seems to be the wave of the future and where there is the most room for growth other than sports betting and casinos being tied directly to sports venues (e.g., Allegiant Stadium, home of the Las Vegas Raiders, or potentially Citi Field and/or NYCFC’s new venue). By the way, the tax rate to place a bet in-person and online in Massachusetts is 15% and 20%, respectively, compared to New York State, which is 51% for state operators. Probably safe to assume that consumers and businesses will like the lower tax rate further north from the Empire State. More than half of the United States now allows for sports betting with nearly half in the mobile category.

Across the pond in the United Kingdom, there is a reversal in sports gambling partnerships. Currently ten of the twenty Premier League soccer clubs have gambling jersey partnerships. Those teams will now likely voluntarily end those relationships within the next three-years to abide by new league rules attempting to tackle addiction and prevent impropriety issues. It is of note that the tier-two English Football League that sits below the Premier League would stand to lose $47.8 million per year once the current gambling partnership with Sky Bet ends. Regulators have also recommended maximum bets, no free betting, limits on betting, and of course limits on partnerships.

Will American sports follow a similar fate in the future? There are certainly some lessons learned from the British and European experiences with sports betting. American history is also ripe with examples of some of the issues and pitfalls with sports betting, professional clubs, and athletes.

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About Jeremy M. Evans:  

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clientele in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.

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Jeremy M. Evans is the Founder of California Sports Lawyer® and serves as Senior Counsel at Klinedinst PC, representing entertainment, media, and sports clients in California.