Nine states have legalized sports betting, and six states have already opened the betting windows, as Oklahoma’s tribal-owned casinos start the push for sports books in the next legislative session.
“We are going to be dealing with a lot of new legislators and a new governor,” said Pat Crofts, CEO of Creek Nation Casinos. “So the one thing we know is it won’t happen quickly.”
‘What everyone in the industry is talking about’
How quickly could Oklahomans legally bet on Bedlam? Depending on how fast legislation can be passed, and then signed by a new governor, some believe it could be as early as next summer or fall. Others believe the timeline is closer to 2020.
Either way, it is a major topic, as Oklahoma tribal casinos look toward a renegotiation period for tribal gaming pacts as early as next year.
“Those are two completely separate issues,” said Mark Fulton, chief operating officer of Cherokee Nation Entertainment. “But we were at a huge gaming convention (recently) in Las Vegas, and sports betting was the biggest issue by far. It is what everyone in the industry is talking about.”
Obviously, Oklahoma would like to join the growing number of states that have already opened legalized sports books or are in the process of legalizing it.
“I think 2020 might be the earliest for us, and that would be a pretty aggressive calendar,” said Byron Bighorse, CEO of Osage Casinos. “We have an upcoming election of our state’s new governor. We will need some type of legislation.
“Sports betting is a complex issue with a lot of variables. There are a lot of steps that need to be taken before you will see sports books start popping up around the state.”
Sara Slane, senior vice president of public affairs at the American Gaming Association, agreed that it is a complex issue, but she’s been surprised how quickly sports betting is sweeping across the nation.
According to Slane, nine states have legalized sports betting — six where betting is underway and three others where betting regulations and operations are being finalized.
“It is a complex issue, but it is moving very quickly,” Slane said. “It is happening much more quickly than I had anticipated. There is a very large demand for it.
“And in states where there is already casino infrastructure, such as Oklahoma, it helps push it along a little faster. Sports betting is simply an additional convenience to offer customers.”
compared to machines, table games
The Oklahoma Legislature would need to pass legislation to amend the tribal gaming compact to allow sports betting. Then it would need to be signed by the governor. The issue of the tribal compacts could come into play for some tribes by 2020, though those compacts have an evergreen clause, one that allows for an agreement to continue for a defined period if the existing agreement is not renegotiated or properly canceled.
But the compacts are a different issue from the immediate consideration of sports betting.
“We view sports betting with a lot of excitement,” Crofts said. “We were in Mississippi recently and toured the sports betting facilities on the Gulf Coast.
“I know we love football here in Oklahoma, but those casinos are in the midst of the Southeastern Conference. Those sports books are drawing customers from all over the southeastern United States. They come in to make a few bets on the games and stay for a day or a weekend. It has brought a lot of new customers into their facilities. We think that could happen here, too, especially those casinos down near the Red River.”
Most believe sports betting will not be a huge windfall for the tribes or the state. The “margins,” the amount of expected income after bets and expenses are paid, are “very small compared to machines and table games,” Crofts said.
In addition, tribes will have to decide how to operate the sports betting. Many casinos that operate sports books do so by hiring established sports betting operations that have the experience in setting lines and training personnel.
“There’s going to be a gold rush on talent for guys who make the lines,” Fulton said.
Do homework and start working now
A panel discussion at the United Indian Nations of Oklahoma Kansas and Texas’ annual meeting last week in Tulsa gave local tribes a long list of options when it comes to sports betting.
“These things can take a long time,” said Walt Fales, senior vice president of strategic development and enterprise gaming for Caesars Entertainment. “Sometimes, there is a long lead time. However, my suggestion is for tribes to do their homework and start working now. Investigate what they want to do and how best to operate it.
“So when an agreement is reached, you can shorten the time it takes to get up and running.”
The federal law prohibiting sports gambling, except in Nevada where it was already legal, was struck down by the Supreme Court in May. Sports betting is already underway in six states.
Different formulas could result in sports betting being added to Oklahoma’s tribal casinos.
Amendments to Oklahoma’s current tribal gaming compact allowed state tribal casinos to add “ball and dice” games as a part of a plan to increase school funding and end a teacher walkout last spring. It is estimated the new games could add more than $20 million a year for the state, with some estimates as high as $49 million per year.
A number of Oklahoma tribal casinos, including the Hard Rock Hotel & Casino Tulsa, River Spirit Casino Resort and Osage Casino in the Tulsa metropolitan area, started adding craps and roulette games in August.
No action was taken on a bill last session that would allow the Oklahoma governor to expand the tribal-state compact to include “sports pools.”
Opening the betting windows in other states
According to ESPN, five states — Nevada, Delaware, New Jersey, Mississippi and West Virginia — opened up legalized sports books by September. A casino in New Mexico added sports betting in October.
Another three states — Pennsylvania, Rhode Island and New York — are close to opening legalized sports books.
The New Jersey Division of Gaming Enforcement reports that bettors waged $184 million in September, a 100 percent increase from the August total.
The New Jersey totals coincide with the start of football season and the recent launch of mobile and online sports betting. It translates to about $24 million in taxable revenue for New Jersey.
All of this is possible because of a Supreme Court ruling in May, in a case brought by New Jersey, that struck down the Professional and Amateur Sports Protection Act, a federal law dating back to 1992.
Some states, such as Mississippi, anticipated that the federal law might be overturned by the Supreme Court. So Mississippi legislators passed legislation legalizing sports betting in 2017.
As a result, when the Supreme Court ruling came down in May, the state of Mississippi was ready to add sports betting just two months later.
“I think in many cases sports betting is more of an amenity for your customers,” Fales told Oklahoma tribes last week. “The margins are very small, and it is a complex addition. However, I would compare it to providing food and beverage or entertainment. It is something your customers want, and they want it to be convenient.”
Currently, Mississippi is the closest state to Oklahoma to legally place a sports bet.
According to the American Gaming Association, $150 billion was wagered illegally on sports in the U.S. last year.
The American Sports Betting Coalition reported $58 billion was bet on just NFL and college football last year, 97 percent illegally.
In New Jersey, there were $16 million in sports bets the first two weeks it was legal.
New Jersey and Delaware were the first two states to open sports books in June, just weeks after the Supreme Court ruling.
Online betting, other issues to consider
Of course, there are a number of issues to consider as Oklahoma heads toward legalized sports betting.
It is estimated upwards of 70 percent of sports bets made in the United Kingdom are online and through mobile devices. Some estimate more than 40 percent of all sports wagering will be made online in the future.
“We had a recent horse race where there were 26,000 bets being made every minute online or with mobile devices,” said Kevin Vonasek, vice president of business development for the Americas for SG Digital. Vonasek, speaking to local tribal leaders last week, works for a company that is a leader in digital gaming, sports and iLottery.
So how do states deal with online bets? It is a huge market to monitor and tax.
In addition, one of the latest technical additions to sports books in Nevada has been in-play wagering. There are betting opportunities, with adjusted lines, during the play of games.
“There are 200 to 400 race and sports books operating profitably in Nevada,” Fales said. “Some of that is tourism. But Nevada has a smaller population base than Oklahoma.
“Much of that is electronic. So understanding the electronic and mobile component of sports betting is important.”
Plus, should pro and college sports teams get a piece of the betting pie? The NBA has lobbied for upwards of 1 percent on the handle (total amount wagered) and later reduced its request to 0.25 percent. So far, there has been no movement to give a percentage to teams, according to multiple media reports.
In Oklahoma, that could affect the Oklahoma City Thunder, University of Oklahoma football and basketball, Oklahoma State University football and basketball, University of Tulsa football and basketball and Oral Roberts University basketball.
“We don’t know what will happen legislativewise in your state,” said Michael Soll, president of The Innovation Group, a research and advisory firm in the gaming, entertainment, hospitality, tourism and leisure industries. “However, what we do know is that Oklahoma may have more gaming-possible tribal land than any other state.”
Plus, there is the tax rate. Depending on the tax rate, some bettors could decide to go online or to a neighboring state.
“You have to monitor your competition, what they are offering, either within your state or in neighboring states,” Vonasek said.
Michell Hicks is president of Chief Strategy Group, a consulting firm in Cherokee, North Carolina. He is a former chief of the Eastern Band of Cherokees.
“The door has been opened,” Hicks said. “However, it is very important that every tribe make sure it is a concept they want to do. Then, you have to make sure it is a critical piece of what you can do. It takes a lot of planning. I think it is wise to take your time and do what is best for each tribe. It is different for everyone.”