Martin Lycka: Alternative reality – What if PASPA was retained?

Martin Lycka of Entain gives his thoughts on what the US would look like today if PASPA was never repealed in 2018.
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Martin Lycka – SVP for American Regulatory Affairs and Responsible Gambling at Entain – gives his thoughts on what the US would look like today if PASPA was never repealed in 2018.

It will have been four years next month since the repeal of PASPA. I recall having been in bwin’s Vienna office on the day of the game-changing decision, updating the news screen literally every minute like a mad man to see whether the valiant fight of a few astute Jersey men had finally taken the US to the promised land of legalized sports betting.

With the benefit of hindsight, I could rather misleadingly and theatrically argue that I must have had a premonition that my career, and in fact my life (I am actually looking at the Empire State Building through my window while writing this piece), will have changed because of that 6-3 decision. But what would have happened if that decision had gone the other way?

In a world without legalized sports betting it is a given that Super Bowl commercials would not have been dominated by sports betting adverts. This would have had two upshots: 1) more airtime for Patrick Mahomes and Shaq to promote their respective insurance products and 2) fortification of the market position of the black market operators as the general public would have never learned about the fact that sports betting can be done legally. 

There is of course a lot to be said about, or rather against, the overwhelming tide of sports betting advertising that seems to be rearing its head everywhere one goes or looks. As an industry, we might need to pause and think about where we want to go from here with a view to preserving the customers’ openness to keep consuming these ads, very likely on a far smaller scale.

In general though, sensible and less frequent sports betting-related advertising – something that would not have come into being in a PASPA-dominated world – has a dual power of attracting customers to exciting products while steering them down the path of responsible play as long as it contains proper RG messaging. 

Not having legalized sports betting would also have allowed those shady men down the pub offering us the latest odds on a March Madness game to thrive and take advantage of unsuspected pubgoers. 

It would of course be foolhardy to believe that the black betting market would have petered out merely because regulation is on the books now. And yet there is absolutely no doubt that regulation is a good thing as it is conducive to channelization of sports betting offer as well as demand into controllable markets and provides for a platform to further clamp down on the shady busy bodies offering ‘black’ books. 

Having said all this, it is imperative to bear in mind that regulation needs to be both strict and attractive to be efficient in its combat against unregulated market practices – one can only surmise that those Broadway muses might not have had the greatest of days when they whispered number five-fifty into the ear of the NY state former Governor. 

Finally, America without legalized sports betting would have still had a few states with online casinos and a high number of them with brick-and-mortar properties and lotteries. It has certainly been argued that the legalization of sports betting would have cannibalized the traditional retail gambling markets. However, this proposition has not been born out by the key economic criterion, the market reality. In fact, the arrival of sports betting has only heightened interest in all gambling categories and has arguably helped the industry tide itself over the very unfortunate times of the recent pandemics. 

And although online casino regulation is still stuck in neutral I, perhaps once again naively, believe that as a result of the recent positive developments paving a potential way towards nationwide online poker liquidity and the industry’s love for cross-selling, it will speed up before we know it. This would not have happened in a PASPA-dominated America either. 

To wrap up, I shall not speculate, out of respect for my friends across the border, to what extent the regulatory pressure coming from the Wolverine and the Empire states, has pushed the Ontario regulation over the wire. What I do know though is that instead of beseeching the help of the Broadway muses from within the Garden State I would have been relying on the assistance of the West End ones had the PASPA decision gone the opposite, i.e. the wrong way.

Martin Lycka is the SVP for American Regulatory Affairs and Responsible Gambling at Entain. The statements made in relation to this article, do not necessarily reflect the opinions held by Entain Plc. Subscribe to Martin Lycka’s Safe Bet Show on all leading podcast providers. Click here for more information.