While many people would say the first few years of widespread legalized sports betting in the United States since the repeal of the Professional and Amateur Sports Protection Act (PASPA) have been a near-universal success, famed professional bettor Billy Walters is not one of them.
Speaking to a room of lawmakers and regulators at last week’s National Council of Legislators from Gaming States (NCLGS) conference, Walters was highly critical of several aspects of the industry ranging from fairness to transparency to revenue to taxation.
Walters is arguably the most famous sports bettor in the country. Last year, his biography Gambler was a New York Times best seller.
Walters claims legalizing sports betting was done without experts
Like many other gamblers, Walters had high hopes for legalization, something he has longed for for some time.
“I wanted to see sports betting legalized. I want to see it regulated. I wanted to see the criminal element out of it. I wanted to see jobs created, taxes created and I wanted to see people in America be able to do what they were already doing, and engage in betting on sports and doing it in a legal environment,” he said.
However, he has quickly soured on the industry’s potential.
“I have some very deep concerns about the future of sports betting.”
Lawmakers in more than 30 states have legalized sports betting over the past six years, but Walters thinks these discussions in state capitals was lacking proper representation from the gambling industry.
“To my knowledge, I don’t think anyone with knowledge of the sports betting was involved in that process,” Walters said, seemingly taking a shot at government affairs representatives from most major operators, trade organizations and suppliers as well as legislators.
British bookmaking approach part of the problem
He reiterated several times over that he believes the major operators in the market today do not know much about the business of sports betting and pointed to the influx of British companies in the market as part of the problem.
“They don’t understand booking American sports,” Walters said of British bookmakers. He also suggested that, despite the largely open market models in effect across the states that he believes U.S. sports betting amounts to a “small monopoly”.
Walters’s chief complaint, like many bettors, is that the sportsbooks lack transparency when it comes to minimum and maximum bet amounts and that the limiting or banning of some customers is fundamentally unfair. He also advocated for the posting of the true odds of a sporting result to be posted alongside the betting odds.
He went so far as to suggest that if operators are unable to profit without limiting bettors that regulators should take action.
“If they can’t operate like this and be profitable, maybe they shouldn’t have a license. Because I know there’s lots of people that can,” referencing offshore operators. These operators do not face the same scrutiny as regulated books in the U.S., such as anti-money laundering measures and KYC protocols. They also regularly extend credit to bettors, something explicitly forbidden in American markets.
Walters’s claims about revenue do not align with numbers
Walters questioned the monetary success of the U.S. model, though arguably numbers out of the states do not back up his claims.
“I don’t think anyone has kind of gotten out of this way they thought we were gonna get as far as the states for their revenue,” he argued.
While some states with single-operator markets or other market restrictions have fallen short of revenue expectations, most states with an open sports betting model have met or exceeded revenue expectations so far. Tax revenues have generally aligned with projections as well.
Massachusetts more than doubled tax revenue expectations in its first year, while Ohio nearly tripled its tax revenue projections, though that happened after the legislature doubled the tax rate halfway through the year.
Additionally, the hold rate of operators in these states has steadily increased since 2018.
While he and fellow panelist and bettor Gadoon “Spanky” Kyrollos lamented the European influence on American sports betting, Walters did laud the British approach to gambling taxes, where bettors do not pay anything on their winnings.
“They realize there that they’re going to earn money from the operator, from the jobs and from the taxes that are created there,” he explained.
Bettor advocates for better citizen gambling tax model
The U.S. tax model not only requires that people pay taxes on gambling winnings above a certain threshold but also does not allow people to carry over losses from previous years. Walters suggested an overhaul of this system could transform the betting industry.
“There are a lot of people in this country that, if they can bet on sports at a 20% tax rate and they can carry forward losses like any other business, you will open up an entirely new world of sports bettors,” he said.
Walters went on to suggest that a friendlier tax structure would enable bettors to place larger wagers, offering an example of someone upping their bets of $5,000 a game to as much as $200,000 a game as an example.
Walters said he was agnostic on sportsbooks taking large wagers, so long as the bettor has the money and “is not addicted.”
Walters acknowledges potential addiction risks
Walters acknowledged that he “used to” have a sports betting addiction and warned about the potential dangers that come with a more widespread sports betting industry.
“Gambling is one of the most addictive things in the world,” he cautioned. Unlike many in the industry who found a 60 Minutes piece on gambling addiction released earlier this year to be underresearched and one-sided, Walters found the news segment to be spot on about the pitfalls of young people and betting.
The criticism of the industry from Walters was extensive, but he did think there is room for the industry to change, and that those changes could start with regulators.
“All I’m asking the regulators to do is referee this and make sure that the sports player is being treated fairly in the way you would want to be treated,” Walters said, imploring those in the room to consider measures like posted limits and mandated transparency.
“This isn’t about me,” he said. “It’s about the other 40-50 million people that are betting sports.”
