Seth Young, executive director of online gaming at Foxwoods, believes that there is still a considerable way to go before US lawmakers and policy makers understand the sports betting business. Speaking at last week’s GiGse in Miami he offered a reality check on issues including market entry, quality of legislation and some basic economics.
He opened his address with a wry referral to the post-PASPA hyperbole, saying: “It’s gold rush time, right? From an online perspective, the way that online is evolving is essential to the sports betting conversation when you’re looking to reconvert the black market into a legal market. And there are very limited opportunities for a lot of suppliers to come into the market to realise the full potential of this multi-billion dollar industry.”
On the legislative process Young told delegates: “So I think at this point there are 20 states that have either introduced legislation or legalised the activity within their borders. And typically it’s tied to those existing gaming stakeholders. So as states begin to introduce legislation and consider regulation in there are a lot of questions to answer. We’re fighting a lot of naivety in legislators. In my experience in Connecticut there hasn’t been a lot of understanding of the issues so we’ve worked hard to educate lawmakers and policy makers to understand what a good business structure looks like and how it can thrive with a strong business-friendly environment.”
Young finished his opening salvo with a sobering reminder about real revenue levels from sports betting. “On the economics, it’s not like Europe,” he said. “You really need to be aware of the low margins in this business and not killing it with taxes or things like integrity fees. The last thing I’ll say, and it’s for anyone who doesn’t know how the economics work; there is the handle number which is the wager. So when you see $150bn in handle from the market, that’s not the revenue coming in. If you want to do the quick math, five per cent of that is the revenue number.”
