Betting On Sports

The Supreme Court made a lot of important rulings earlier this year.  One ruling that got a bit lost in the shuffle may end up having an important impact on states across the country, colleges that play big-time sports, and professional sports franchises, too.

300px-eight_men_bannedIn May, the Supreme Court struck down a federal law that effectively banned gambling on sports, with some exceptions, in all states but Nevada.  The federal law, called the Professional and Amateur Sports Protection Act, was based on concern that allowing widespread gambling might undercut sports as a form of wholesome entertainment.  Nevada, which already permitted gambling on sports, was allowed to continue, but other states were largely barred from doing so.  New Jersey passed a state law allowing gambling on sports and then challenged the federal law, and the Supreme Court sided with New Jersey, ruling  that while Congress has the power to regulate sports betting at the federal level, it can’t dictate to states what their individual laws must be.

Why did New Jersey decide to challenge the federal law?  Do you really need to ask?  Of course, the answer is money.  New Jersey’s casinos were struggling, and it objected to Nevada having a federally sanctioned monopoly on sports gambling.  If sports gambling were allowed in its casinos, New Jersey reasoned, it might promote tourism and increase tax revenues.  And these days, states are all about increasing their revenues.

With the Supreme Court ruling, Ohio legislators are now looking at whether Ohio, too, should legalize gambling on sports.  One argument made in favor is that many Ohioans already bet on sports through the underground economy — so why not take the activity above ground and get some tax revenue from it?  But the existence of the illicit sports betting also poses a challenge, because states that want to legalize the activity in order to earn revenue have to figure out how to make legal gambling as easy and attractive as calling the local bookie.  One issue for legislators to consider, for example, is whether Ohio should allow on-line gambling, so long as the website has some Ohio presence and the state gets a cut of the action.  Or, should such betting be limited to licensed casinos?

And colleges, universities, and professional sports leagues are holding their breath, too.  They opposed New Jersey’s effort to overturn the federal law, because confining legal sports gambling to Las Vegas kept it separate and apart from 99.9 percent of campuses, stadiums, and sports arenas.  Now legalized gambling on sports will be out in the open, and there are concerns that gamblers hoping to get an edge might bribe professional and amateur athletes to throw a game or do something to affect the point spread.

College sports administrators and professional sports leagues are worried about another Black Sox scandal — who can blame them?  After all, it’s been 100 years, and the 1919 American League champions from Chicago are still called the Black Sox.

Stoned On The Strip

Yesterday legal marijuana sales began in Nevada.  Well, why not?  In the Silver State there’s already legalized gambling and prostitution, a tradition of Rat Pack boozing and partying, and a prevailing “what happens in Vegas stays in Vegas” ethos.   So why not add marijuana to the mix, to ensure that every imaginable mood-altering option is available to people who can pay with the coin of the realm?

They don’t call it Sin City for nothing.

las-vegas-stripNevada now is the fifth state to legalize the sale and possession of marijuana for recreational use.  In Nevada, adults 21 and over can purchase and possess up to an ounce of marijuana, but public use is still prohibited — because, even in Las Vegas, you’ve got to draw the line somewhere.

Some of the Las Vegas marijuana stores, with names like Reef Dispensaries and Euphoria Wellness, opened at midnight, to take advantage of the first moments that the new law took effect, and reported long lines and brisk business.  One purchaser said “you don’t have to hide in the corner anymore and feel bad about it,” and thereby articulated one of the core concepts underlying Las Vegas culture generally.

The trend toward general legalization of marijuana seems pretty clear and probably is close to irreversible, but I’ll still be interested in how it all works out for Las Vegas.  Drinking seems to go a lot better with gaming than marijuana does.  You wouldn’t think that stoned individuals would be particularly keen about going out to gamble, where they probably would wonder whether everyone was staring at them and whether it was their turn to take a hit at the blackjack table.  Maybe Nevada is just trying to stimulate sales of Dark Side of the Moon.

Pro Sports In Vegas

The NFL has approved the request of the Oakland Raiders franchise to move to Las Vegas.  It’s not clear when the Raiders will actually start playing in Vegas, and the team will likely play another season or two in Oakland, but a new stadium is expected to be built for them in their new home in southern Nevada in time for the 2020 season.

ows_149067187344496The story here isn’t another move of a pro sports franchise; teams packing up and hauling their operations to a new town is old news these days.  The Raiders, who have shuttled back and forth between Oakland and Los Angeles and always seem to be either moving or on the verge of moving, are one of the hand-wringing teams that are forever working their local government for a more lucrative deal.  If Las Vegas wants to foot the bill for a lavish new domed stadium — which is expected to cost at least $1.9 billion, with the costs being split between revenues generated by an increased hotel room tax, the Raiders organization, and a Las Vegas gazillionaire — to get the NFL brand associated with Sin City, that’s its decision to make.

No, the real story here is that the Raiders’ approved move to Las Vegas is just the latest evidence of the increasingly accepted association of gambling and sports.  Gambling used to be one of the chief concerns of professional and college sports teams.  From the Chicago Black Sox throwing the 1919 World Series, to the college basketball point-shaving scandals of the ’40s and ’50s, to the suspension of Pete Rose from major league baseball for betting on baseball games, sports leagues traditionally reacted viscerally to any association with gambling.

But a lot has changed in America, and gambling has become much more commonplace and accepted.  When I was in Philadelphia recently the landscape was dotted with signs for casino gambling; the slot machines and table games that used to be reserved for Las Vegas can now be found in more than half the states in America.  Betting on sports events has become so routine that the lines and odds on games and matches are available to anyone with a few strokes of a keyboard, and one of America’s great annual pastimes is participating in the NCAA March Madness pool at the office.  There’s not as much of a taint to gambling as used to be the case.

But, is it good to have an NFL team in Las Vegas, where sports gambling is legal and people can make, or lose, huge sums of money if the point spread gets covered because of a flukey last-minute play?  Is it wise to have professional athletes living in a community where, at a party or charity event, they may hobnob with some well-heeled but shady characters who might drop a hint or two about how the athletes and their teammates could make some easy money without costing their team a game?  Could you envision a scenario where an NFL star has a bad run of luck at the gaming tables and is encouraged to even the score by missing a block or dropping a sure touchdown catch?  I suppose you can argue that pro athletes could be exposed to such characters, and temptations, anywhere in America, but gambling is so deeply engrained and accepted in the Las Vegas culture that I’m not sure other situations are really comparable to pro athletes being based in a place that is often called a “gambling mecca.”

We’ve come a long way since the days when pro sports teams did whatever they could to project a squeaky clean image.  Now we’ll have an NFL team located squarely in the most gambling-oriented town in America.

Everyday Everywhere Gambling

  
On the C concourse of Port Columbus, at the end of a row of vending machines, sits this colorful Ohio Lottery device.  It apparently allows you to play virtually every game the Ohio Lottery offers — from the scratch-off instant games to the full lottery drawing decided by the rattling ping pong balls.  I guess there must be some bored travelers who might want to pass the time waiting at gate C52 by getting a mini gambling fix, and if so, the Ohio Lottery is happy to help them feed the beast.

Turn on a football game, and you’ll see incessant ads for Draft Kings and Fan Duel.  The little fantasy football group at the office has morphed into a big business with commercials with footage of exuberantly celebrating winners and testimonials where players talk about their winnings and the thrill of competing for cash.

And, of course, Ohio is now home to three casinos and a number of “racinos” that combine horse racing with hundreds of slot machines.  No matter where you live in the Buckeye State, you don’t have to drive far to plop yourself in front of a one-armed bandit with a cup of quarters.  And if you go to a bar after your racino visit, odds are there may be a Keno game available for your enjoyment as you sip your beer.

We live in an era where it’s easier to gamble than it ever has been before.  Does anyone think that’s a good thing?

The (Positive?) Lessons Of Gambling Saturation

In Atlantic City, New Jersey, the newest and largest casino — a $2.4 billion ultra-modern complex called Revel — is closing after operating for less than three years and never turning a profit.  Two other casinos, the Showboat and the Trump Plaza, will be closing later this year, and a fourth casino closed at the beginning of 2014. 

In Ohio, revenues from the state-licensed casinos are down at five of the six casinos that have been open for more than a year.  Casino operators, always on the lookout for that extra shekel, are hoping to win approval for plans to make up for a bit of that lost revenue by putting slot machines in smoking areas so smokers can feed the one-armed bandits while puffing away.

IMG_2931In both places, the cause for the decline in revenue is the same:  competition.  Atlantic City casinos were hurt by the opening of a number of small casinos in neighboring Pennsylvania.  In Ohio, new “racinos” — race tracks that are licensed to operate row after row of slot machines — are coming on line so that by the end of the year the state will have four casinos and seven racinos to compete for the gambling dollar.  Ohio now has gambling outlets throughout the state and in four neighboring states, and casinos can be found in cities and on native American reservations up and down the east coast.

The falling casino revenues and closures are bad news for employees who lose their jobs — Revel had more than 3,000 employees who will need to find new employment — and for government planners who adopted rosy casino tax revenues in their budgets, but it’s not necessarily bad news for the rest of the country.  The struggling fiscal performance of all of the new casinos clearly indicates that there is a finite population of gamblers in the United States, and that pie is not growing.  Perhaps the data means that most Americans would rather get and keep a job, save their hard-earned wages rather than risking them at games of chance, and achieve financial independence the old-fashioned way?  If so, such a show of prudence is encouraging.  Now, if only governmental leaders who are all too happy to adopt budgets bloated with pie-in-the-sky casino revenue projections would begin to exercise the same kind of restraint . . . .

Card Sharks

An Atlantic City casino, the Borgata Casino & Spa, has sued a big-time gambler, claiming that he cheated at cards and won $9.6 million playing baccarat in the process. (Those of you who are James Bond fans, like me, will recall that baccarat is 007’s game of choice.)

The casino alleges that the gambler used a method called “edge sorting” that took advantage of defective cards with patterns on the backs that were not uniform. The lawsuit claims that the gambler noticed the defect and got the dealer to arrange and shuffle the cards in a way that allowed him to use the non-uniform patterns to identify which cards were coming out of the dealer’s shoe.

$9.6 million is a lot of money — but it’s got to be embarrassing for a casino to admit that they didn’t detect that they were being provided with defective cards and were duped by this alleged scheme. Don’t casinos, as a matter of course, take steps to make sure that the cards they are using have uniform patterns on the backs?

It reminds me of my high school days, when boys would gather in the “student lounge” during free periods and play euchre. We didn’t gamble for money, but I remember one of my classmates bringing in a deck of “marked” cards and showing us how you could decipher the marks on the back. I never would have noticed the difference — but then I’m not a casino where gamblers have the opportunity to win millions of dollars.

Poor Pete’s Pity Party

If there is a more pathetic figure in professional sports than Pete Rose, I don’t know who it is.  He lives in Vegas and makes his living by selling his autograph to people who, for reasons only they know, will pay through the nose for the signature of the All-Time Hits Leader.

But Pete is sad.  Because he gambled on baseball, despite the ironclad ban that has existed since Judge Kenesaw Mountain Landis was  Commissioner, he has been banished from the game and can’t be enshrined in the Hall of Fame.  Now he laments that he was just cursed because gambling was his vice.  He’d be better off, he says, if he’d been an alcoholic, a drug user, or a wife beater, because those vices can be forgiven.

Pete Rose says that he’s “messed up” and is “paying the consequences,” but his recent comments belie any true contrition.  He lied about gambling for years and only admitted it to help sell his autobiography, and now he hopes to make people feel sorry for him.  I don’t, and no one should.

Pete Rose violated the cardinal rule in baseball, and he got what he deserved.  For a guy who played up his reputation as a tough, hard-nosed player, he’s really become a crybaby.  It’s sad.

Gambling On Gambling

Ohio regulators recently released a report about revenues earned by Ohio casinos.  Coming less than a month before the fourth and final casino, in Cincinnati, is to open, the report indicates that the casino takes may be slowing.

IMG_2928The question for now is whether the Ohio gaming market is saturated.  Ohio used to have no casinos, but it was surrounded by casinos in Michigan, West Virginia, Pennsylvania, and Indiana.  Now four full-blown Ohio casinos have been added to the mix, as well as “racinos” — horsetracks that have slot machines.  In the Columbus area, Scioto Downs features more than 2,000 machines and is packing in people who just want to play the slots.  Some Columbus gamblers apparently think the slots are “looser” at Scioto Downs than at the Hollywood Casino, and they’d rather play where they have a better chance of getting a jackpot.

Ohio regulators seemingly recognize that the market for gambling isn’t as robust as was forecast when Ohio voters first approved casinos.  The Ohio Department of Taxation originally estimated $1.9 billion in annual tax revenues from the casinos, but this year’s state budget anticipates less than $1 billion in tax revenues from the casinos.  With new casinos coming on line, racinos providing competition, and casinos in surrounding states trying to hold on to their Ohio clientele, who knows whether that number is realistic or just another gamble?

I’ve always questioned the credibility of casino revenue and job forecasts, because I believe there are only a limited number of people who are interested in gambling.  People who don’t want to gamble aren’t going to start just because a casino opens nearby, and people who do like to gamble can only go to so many places on so many occasions.  If the Ohio gambling market isn’t growing, then all of the casinos, racinos and other competitors are just going to be tussling over the size of their pieces of an unchanging pie.

How Are Those Ohio Casinos Doing?

Earlier this month, the Hollywood Casino opened on the outskirts of Columbus.  About 25,000 gamblers showed up for the opening day festivities.

In 2009, Ohio voters approved a constitutional amendment authorizing the construction of four casinos — one each in Cleveland, Toledo, Columbus, and Cincinnati.  When the constitutional amendment was considered in 2009, state officials estimated that the 33 percent tax on gross casino revenues from the four casinos, plus approved video lottery terminals, would produce $470 million annually in tax revenue.  The promise of that kind of tax contribution, plus the jobs the casinos would create, caused Ohio voters to end their long-standing opposition to casino gambling in the state.

The Columbus casino is the third to open, following casinos in Cleveland and Toledo.  It’s early yet, but the trend lines in Cleveland and Toledo aren’t knocking anyone’s socks off.  For both of those casinos, June was the first full month of operation — and also was the high point for revenue, which has declined every month since June.  In Cleveland, revenue has declined from $26.1 million in June to $21.1 million in September; in Toledo, revenue has dropped from $20.4 million in June to $15.9 million in September.  The casino operators and experts say that the novelty of a new casino wears off and it takes a while for standard gambling patterns to get settled, and that the Ohio casinos might not follow the patterns seen in other locations.  The casinos also are tweaking their operations as they learn their markets; in Cleveland, for example, the Horseshoe Casino is now formally welcoming bus tours and providing some slots credits to entice bus visitors.

A few months won’t tell the tale, of course, but you have to wonder if we’ve reached the casino saturation point in this country, and there just isn’t that large of a market for more casino gambling.

Mega-Hopeful

Today I think I bought the first lottery ticket I’ve every purchased — and it was pretty obvious to the guy I bought it from.

Normally I pay no attention to lotteries.  Ohio has had one for years, but I’ve never played it because it seems like a sucker’s bet.  I didn’t play even when Ohio joined the “Powerball” lottery some years ago and the pots got bigger.  When the jackpot gets north of half a billion dollars, however, I’ve got to dip my toe into the legalized gambling waters.  Why not?  Even though the odds are astronomical, the payoff is, too.  What’s a few bucks when you could conceivably win enough money to set your family up for generations?  I’m with UJ on this one.

I was in Cleveland today, and on my way back I stopped at a gas station along I-71 to buy a ticket.  I figured that this helped my chances, because the winners of these big lotteries always seem to buy the winning tickets in a small town.  Unfortunately, when I got up to the counter I didn’t have the slightest idea how to buy a ticket.  I didn’t know the name of the lottery, I didn’t know how many numbers you had to pick, and I didn’t know what it meant when the guy asked me if I wanted the “megaplier.”  So, I just asked him to pick the numbers randomly.  For all I know, he pocketed the cash and gave me some tickets from last week.  I wouldn’t know the difference.

 

The Buck Back Is Back

When NCAA Tournament time arrives, that means it’s time for the Buck Back — the greatest pool in the history of organized sports.

Well, okay — that may be an overstatement, but the Buck Back is a lot of fun.  Just recruit seven friends who like college basketball and don’t take things too seriously, ask everybody kick 8 bucks into the kitty, and then have a serpentine draft of all of the teams on the 64 lines of the NCAA Tournament grid.  The eight players will end up with eight teams (we don’t count the four play-in games).  Each time one of your teams wins a tournament game you get a buck back — hence the pool’s name.

I’m not a gambler, and I never enter the standard NCAA pools or on-line bracket contests.  But I can spare 8 bucks to participate in the draft session, where insults and self-deprecating humor rule the day, and then follow my teams as they try to make their way in the Big Dance.  This year I drafted seventh and ended up with Missouri, Baylor, San Diego State, Gonzaga, Southern Mississippi, Ohio U., Davidson, and Loyola (Maryland).  I’m a bit skeptical of my roster of teams, but by drafting Loyola I at least ensured that, if my beloved Buckeyes gag and lose their first-round game, I get a buck out of it.

Let the Buck Back begin!

The Dutch Debate “Drug Tourism”

The Netherlands, with its decriminalization of “soft drugs” like marijuana, has long attracted tourists who are interested in sampling illicit substances.  Now Maastricht, a Dutch city on the border with Germany and Belgium, is trying to crack down — in part — on “drug tourism,” and the country as a whole is trying to decide how to address the issue.

The Dutch approach to drugs has led to the development of about 700 “coffee shops” nationwide.  These establishments sell that sought-after combination of coffee and cannabis and are a typical destination for “drug tourists.”  Now Maastricht has decided to ban certain tourists from the “coffee shops.”  German and Belgian tourists can go in and partake of the wares; everyone else, not so much.  Scanners will check passports and ID cards, police will conduct random checks, and anyone not holding a Dutch, Belgian, or German passport will be required to leave.

Proponents of Maastricht’s law say “drug tourism” is a threat to public order.  Opponents of the law say it violates EU policies of equal treatment of citizens of member countries — and also hurts business and the city’s economy.  Why turn away those hard-partying Americans, Brits, and Italians, they reason, if you are going to allow Germans and Belgians to come in, chug a cappuccino, and toke up?

The struggle between trying to regulate social conduct, and the prospect of tourist dollars and tax revenue, has caused many American cities and states to revisit their laws about gambling and liquor sales.  The debate in the Netherlands about drug laws is the same debate in a different context.  In America, the lure of tax revenue and increased tourism usually proves to be irresistible, particularly in bad economic times.  How will the Netherlands come out on that debate?

Are Brothels Next?

Here’s a sign of how desperate some states are for money: Kansas will be the first state ever to own and operate a casino. I suppose that, once states started obtaining revenues from lotteries, this result was inevitable. Still, it is pretty sad when a state government owns and profits from activities that are generally regarded as immoral, all in the name of increasing revenue.

I ask again, however: is there any source of revenue that desperate state governments would not be willing to tap to balance state budgets? If state governments are willing to operate casinos, can state-owned bars, brothels, and recreational drug facilities be far behind?

Higher Revenue

The California Board of Equalization, which is charged with administrative authority over the State’s taxes, estimated that a legislative proposal to legalize the growth, sale, and consumption of marijuana as a means of bridging California’s budget gap would raise nearly $1.4 billion per year.  Such a sum would not, of course, cover the entire California budget deficit — which amounts to well over $20 billion — but it is not chicken feed, either.

One wonders whether the enormous budget pressures that states are facing will cause them to make choices they really hadn’t considered palatable before.  In Ohio, for example, the Governor retreated from long-standing opposition to legalized gambling to allow video slot machines at seven Ohio racetracks.  The proposal is supposed to raise $1 billion in revenues and thereby help to close a multi-billion dollar budget deficit.  (I’ve never understood, incidentally, how it is really possible to estimate, with any degree of accuracy, the likely revenues from legalized gambling, and it would be interesting to see whether such estimates, in retrospect, have even come close to what is actually achieved.)

From a political standpoint, the great thing about sin taxes is that the people who don’t engage in the sin can decry the sin, raise the tax, and enjoy the revenue, all at the same time.  Such activities are easier than raising taxes on the general population or cutting existing programs or governmental employees.  It may well be that the poor economy and budget problems, coupled with those political considerations, make more progress toward legalizing marijuana than NORML ever has.

Toledo Embarrassment

This article reports that six former University of Toledo football and basketball players have been indicted for taking bribes to shave points during games. An indictment is not a conviction, of course, but if these charges are found to be true it will be a sad day for sports fans generally and Toledo residents specifically. We will no doubt be seeing the articles you always see when this kind of news occurs — that there is too much money in collegiate sports but none of it goes to the athletes, that we should pay college athletes to make sure that they don’t engage in this kind of behavior, and that the whole sports world is rigged. I don’t know if many contests are, in fact, rigged, but I don’t think it is asking too much to expect that athletes will avoid taking money to throw games or shave points.

Two other points on this article. First, I know some people gamble on sports, but I find it amazing that bookies would be taking significant bets on contests like UT versus East Carolina. Good Lord — the $21,000 that the two indicted gamblers had to be a huge percentage of the total amount bet on that contest. Second, I have to admit that, when I read this article, I was hoping that the UT players had been paid to shave points in their football win over the University of Michigan Wolverines last year. It’s bad enough that UM lost to a MAC team; it really would have added insult to injury if the UT players had shaved points during the game, too.