Sports

Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming August 2020

Sports have begun to reemerge with more traditional sports with which American consumers are more familiar and have a deeper affinity for wagering. After nearly five months since the start of the Great Shutdown, sports are starting the long and winding road to recovery. Optimism reigns for the fall as we potentially see the return of football as well as the potential addition of the remaining 2020 schedule for the NBA and NHL that just recently restarted. MLB’s abbreviated schedule has faced a bumpy ride out of the gate, not just with Dr. Fauci’s first pitch at the Washington National’s Game, but by the subsequent canceling of games due to coronavirus-related concerns. Nevertheless, while the stands may not be full, sports have returned.

As GMA continues to look at sports betting markets that are limping through the downturn (while also exposing sports bettors to new options), the numbers continue to show that a competitive market leads the way for states versus those that have a limited number of providers or a model driven by land-based gaming. Those states that operate a full mobile wagering product continue to dominate the market and offer the best alternative to the black market. That being said, tax rates also matter and can inhibit a market, as can be seen in states like Pennsylvania. While offering a full mobile experience, the tax rate continues to impose challenges by limiting the operator’s ability to spend marketing dollars, cutting into overall operations, and leaving money on the table for the state that, in a competitive gaming region, would actually see an increase in revenue with a decreased tax rate.

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Research Brief: Creating Dynamic, Competitive Sports Betting Markets

Over two years ago, the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act (“PASPA”). In overturning PASPA, the Supreme Court has allowed states to begin to regulate sports betting across the country. As of today, there are 19 legal sports betting jurisdictions in the United States, with five others working through regulations and another three states seeking voter approval.

As each of these 19 sports betting markets have been created, there is a direct relationship between the revenues generated and how the how the markets were initially crafted, including factors such as tax rates, the depth of competition, and the ability to offer mobile wagering. This research brief highlights the revenues generated in those states that were among the first movers to the market following the repeal of PASPA. Those states that have shown the highest revenue generation and a competitive tax rate are those that are leading the effort across the United States. New Jersey continues to be the model versus states such as Rhode Island and Delaware that continue to struggle.

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Research Brief: U.S. Senate Judiciary Committee – Protecting the Integrity of College Athletics

Today, the United States Senate Judiciary Committee held a hearing titled “Protecting the Integrity of College Athletics.” The full committee, chaired by Senator Lindsey Graham (R-SC), heard testimony on two major topics in college athletics, Name Image Likeness (“NIL”) and sports betting. These are two issues that, while extraordinarily important in college athletics, the NCAA clearly lacks the proper education to understand their true impacts. The hearing was divided into two panels with a total of seven testimonies on these two major topics:

Panel I: Name Image Likeness
• Dan Radakovich, Athletic Director, Clemson University
• Professor Matt Mitten, Executive Director of the National Sports Law Institute, Marquette University School of Law
• George Wrighster III, Former Member of the National Football League Players Association (“NFLPA”) Board of Representatives
• Dr. Mark Emmert, President of the National Collegiate Athletic Association (“NCAA”)
• Ramogi Huma, Executive Director of the National College Players Association (“NCPA”)

Panel II: Sports Betting
• Bill Miller, President and CEO of the American Gaming Association (“AGA”)
• Heather Lyke, Director of Athletics at the University of Pittsburgh

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Free to Play

As the sports arena fell silent due to the coronavirus, a host of new sports and games sparked the curiosity of sports fans and bettors, such as esports, Belarusian soccer, Russian ping
pong, Taiwanese baseball, darts and more. However, the main professional leagues and other U.S. sports have moved to free-to-play (F2P) as a way to stay engaged with fans during this unprecedented and uncertain time.

F2P is an opportunity for players to engage with games and products for fun or practice, sometimes in real time. F2P offers the same entertaining gameplay offering bonus rewards or prizes found in real-money games while allowing game producers, brands, and operators to cultivate new customers.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming July 2020

As we hit the midpoint of the year as well as over 100 days into the Great Shutdown, sports are still navigating uncharted waters as they look to reemerge. NASCAR, UFC, and boxing have dominated the airwaves in addition to baseball from Asian-based leagues. Sports betting revenues have remained well below average in states across the country including Nevada that, for the second month in a row, redacted the number in its monthly report. Some states continue to see decent numbers as they are able to incorporate online gaming revenue into the mix, while other jurisdictions are using this time to get things in place as they have emerged during the pandemic.

Major professional sports are just starting to figure out how to come back. This includes the soon-to-start NBA that is beginning its social distancing efforts in Orlando. The NHL will be heading north to finish its season, after what was viewed as its favorite hub city in Las Vegas was overlooked because of a spike in coronavirus cases and a media blitz by the local culinary union that did more to dissuade visitation than to protect workers and guests. The biggest question continues to be on the football season that just saw the NFL cut its preseason from four games to two, as well as major college football programs trying to figure out how to start fall camp while testing their student-athletes and staff as they return to campus.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming June 2020

While sports betting revenues remain low during the Great Shutdown, sports are beginning to return to the scene, and while there may not be fans in stadiums, there is a wealth of opportunities to keep fans engaged and restart sports betting revenue generation around the U.S. While April and May will still be fairly dismal in terms of numbers and performance, it is important to lay the groundwork now for the return of sports in the near term. This will not only make the argument that sports will hopefully unite society during this challenging time, but it can also influence and motivate other states to consider legalizing sports betting to compete against the illegal market.

Foreign sports such as European soccer continue to dominate the sports airwaves, but other familiar sports are beginning to emerge through the world of COVID-19 testing and social distancing. This includes the first out of the gate with the UFC, followed by NASCAR which has now hosted a series of races. The return of golf was highlighted over Memorial Day weekend with “The Match” featuring Tiger Woods/Peyton Manning vs. Phil Mickelson/Tom Brady.

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Research Brief: PASPA U.S. Sports Betting Two Years Post Repeal

Two years ago, the Supreme Court of the United States made a historic decision in Murphy v. NCAA (National Collegiate Athletic Association), ruling on the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”). In overturning PASPA, the Supreme Court allowed sports betting to spread across the country with active sports betting now in 18 states. There are eight other jurisdictions that are in the process to go live in the near future, including North Carolina, which is tribal; Tennessee and the District of Columbia, which have regulations completed; Washington, Virginia, and Puerto Rico, which are currently in the regulatory phase; and South Dakota and Maryland, where sports betting will be on the ballot this November.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming May 2020

When the Wind Creek Bethlehem (formerly Sands) facilities initially received a gaming licensing in 2006, the licensing team produced a video that talked about the effect that Bethlehem Steel had on the town. This was the steel plant that helped build the New York Skyline and supported our military might through World War II. The eventual shutdown of the blast furnaces at the plant was the stoppage of the American icon that used to run 24/7/365. Those that still live in Bethlehem today have said that the blast furnaces created a deafening noise when they fell silent. Some may say that we are hearing the same noise today as the sports world has fallen silent.

With the Great Shutdown upon America and most of the world, operators and sports fans have had to look to other sports than the traditional major league and amateur sports that Americans where used to watching. Snooker, bandy, darts, and other games are now commonly found on sports betting apps along with a greater understanding of sports like Taiwanese baseball, Russian ping pong, and Belarusian soccer that have all seen their day in the sun as regulators work with operators to provide content for sports books. While ESPN may be televising cherry pit spiting or rock skipping, those sports have yet to make the cut as operators and regulators have not determined whether or not these are valid events that could have a wager conducted.

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Research Brief: Japan’s IR Opportunity

Given these unprecedented and uncertain times, many questions continue to be raised as to how the process of integrated resorts in Japan may be affected by the ever-changing events surrounding the coronavirus (COVID-19) pandemic. As seen by government actions around the globe, this virus has not only affected Japan, but the rest of Asia, the United States, the Americas, and the world. China is experiencing a second wave of the virus not only in Wuhan, which just recently updated its case counts, but throughout the country. This has extended over the past few weeks to other jurisdictions such as Hong Kong, which just extended its lock down by 14 days, and other parts of Asia that were not initially hot spots but have extended as conditions have changed.

Japan’s integrated resort selection process has come into the crosshairs between numerous issues including the virus, the now-2021 Olympics, the upcoming World Expo in 2025, and the microcosm of Japan’s political process. While tourism has been halted across the globe, Japan will once again be on a path to achieve the tourism goals set by Prime Minister Abe; goals which are achievable with the introduction of integrated resorts once the pandemic subsides. The robust opportunity remains available for Japan to reach these goals and bring in tens of billions of dollars in investment between the three licenses, as well as job creation and other economic benefits that go along with them.

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Research Brief: State Legislative Update on U.S. Sports Betting & Online Gaming April 2020

Over the course of the last month, the sports world has largely gone silent around the globe. Since the coronavirus (COVID-19) outbreak began in China, it has swept its way around the world and has ended most of the sporting events that we have enjoyed. Sports has and always will be something that unites us. With the most recent announcements, including the postponement of the Masters which should be taking place later this week (moved to November), the cancelling of the British Open, and uncertainty of every professional and amateur event, it has forced sports book operators to become creative in pulling sports from across the globe to provide some level of content to eager viewers.

The numbers for February will likely be a strong benchmark that, like most gaming revenue, will not be seen for some time across most jurisdictions. Mobile gaming markets will likely make the quickest comeback once sports begin to return, as some polling has shown that social distancing will continue once things begin to return to a level of normalcy. This shows that mobile wagering is a driver not only before the Great Shutdown but post-coronavirus to allow operators and patrons to enjoy sports in their own way, whether that be at an arena or venue, at a sports book, at a neighborhood bar & grill, or at home.

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