Sports betting is legal in the United States. The Supreme Court’s landmark decision to overturn PAPSA, a law in place since 1992, has far-reaching implications for professional sports and creates the potential for legalized and regulated online gambling.
"The legalization of sports gambling requires an important policy choice, but the choice is not ours to make," Justice Samuel Alito wrote in the 7-2 opinion. "Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own."
Markets Move
Immediately after the news broke, gaming giant Caesars Entertainment Corporation CZR shares gained over 8 percent, along with other casino stocks. Churchill Downs, Inc. CHDN shares were up 4.87 percent at the close Monday, while Boyd Gaming Corporation BYD shares were up more than 3 percent.
Sports Attorney Darren Heitner tells Benzinga he does't see the proliferation of sports betting beyond Nevada hurting Las Vegas in anyway.
"This is a great opportunity for (Gaming corporations). Right now they are limited to Nevada. Now they can expand beyond and tap into whatever they have in Atlantic. They are salivating at the opportunity," he said.
"Overall it's a good thing for the teams and leagues. There is a lot of sports media companies that provide data and analysis to consumers that will benefit and new networks (for bettors) will emerge. It will also draw more fans to the stadium. I think there is a real possibility to see betting at the actual game," Heitner said.
Heitner says that people will be mistaken if they are expecting to see sports betting in every state immediately.
"It is going to be a slow process. People are obviously mistaken to see sports betting legal everywhere. Certain states that have taken a proactive role such as New Jersey, will absolutely license and operate in the immediate future and other states will continue to debate."
Dallas Mavericks owner Mark Cuban told CNBC, "I think everyone that owns a top four professional sports team saw the value of their team double.”
Related Link: Here's Where Legal US Sports Betting Is Coming First
League Comissioners Weigh In
The MLB, NBA and the PGA Tour took an early stance on betting, positioning themselves to capitalize and take a cut of the action in the form of an "integrity fee." After the High Court ruling, the rhetoric from several leagues continues to revolve around protecting the integrity of the game now that states will be free to legislate widespread sports gambling.
NBA Commissioner Adam Silver has been leading the charge, as the NBA was the first league to openly back sports betting.
“Today’s decision by the Supreme Court opens the door for states to pass laws legalizing sports betting,” Silver said in a statement.
“We remain in favor of a federal framework that would provide a uniform approach to sports gambling in states that choose to permit it, but we will remain active in ongoing discussions with state legislatures. Regardless of the particulars of any future sports betting law, the integrity of our game remains our highest priority.”
MLB said the ruling will have profound effects.
"Our most important priority is protecting the integrity of our games," MLB's statement said. "We will continue to support legislation that creates airtight coordination and partnerships between the state, the casino operators and the governing bodies in sports toward that goal."
PGA Tour Commissioner Jay Monahan said gambling will lead to more "fan engagement opportunities" and will grow the business and the sport's fan base.
"If it's regulated at the state level, we think it's better to be a participant than to be on the sidelines, Monahan told GolfChannel.com Sunday at The Players Championship.
NHL, NFL Express Reluctance
The NHL and NFL have been more careful with their approach to sports betting and protecting the integrity of their respective sports, possibly due to the NHL entering the Las Vegas market in 2017 and with the NFL preparing to do the same in 2019.
Monday's ruling has no immediate impact on the NHL, the league said in a statement.
"It’s important to emphasize that the Supreme Court’s decision has no immediate impact on existing League rules relating to sports wagering, and particularly, wagering involving NHL games. So, while changes may be considered in the future, today’s decision does not directly impact the operation of the League or any of our Clubs in the short term.”
The NFL, the nation’s most successful and most popular professional sports league said in a statement, said is commitment to the integrity of the game is "absolute" and said it would lobby for a regulatory framework for sports betting.
"Congress has long recognized the potential harms posed by sports betting to the integrity of sporting contests and the public confidence in these events," the NFL said.
"Given that history, we intend to call on Congress again, this time to enact a core regulatory framework for legalize sports betting. We also will work closely with our clubs to ensure that any state efforts that move forward in the meantime protect our fans and the integrity of our game."
Related Link: Be Careful With The Casino ETF After The Supreme Court's Sports Betting Ruling
Ruling A Mixed Bag For Online Sportsbooks
Offshore sportsbooks are understandably rattled after the news, with the threat that they may no longer be the go-to option for the public to bet on sports.
“It's a mixed bag for online sportsbooks. They will always have a place in the industry because there will always be a sector of gamblers that want to remain anonymous for various reasons," Scott Cooley, a spokesman for online sportsbook BetDSI, told Benzinga.
"Certainly, more and more bettors will gravitate toward the local books, but in the interim, sports fans looking to get involved immediately will turn to the web. Online sportsbooks will also be fielding a lot of buyout offers."
Cooley compared sports betting to the cannabis industry and said it will "explode" with fans who wanted to wager but never did because it was considered taboo.
The Supreme Court decision could lead to legalized online gambling nationwide that's administered through the states, Cooley said.
The sports leagues and states are the biggest winners from online gambling, Cooley said, singling out the NFL as an organization that has been "indirectly benefiting" from gambling for decades.
"If sports betting weren't legal worldwide, the NFL would lose a quarter of their viewers, easy."
New Gaming Revenue Comes With A Cost
A new report from Jefferies analyst David Katz projects the legal sports betting market could be worth $57 billion worldwide, but not everyone is pleased with the implications of states generating additional revenue from sports betting.
“Sports betting has always been the bane of the integrity of sport. The incentives really help the state, but where does the money come from?” Zack Ward of AllSports Market told Benzinga. "You're taking the money from people who have a problem and want to gamble and you're giving it to the people who own the casino. How is it creating more opportunity? It’s just big fat cats making more fat cat money and taking it out of your and I pocket.
"You're dealing with more unemployment, more people that can’t pay their bills — and what do they do when they are desperate? There’s no value creation."
Image credit: Baishampayan Ghose, Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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