Supreme Court sports-betting ruling to have limited Nevada impact

Updated April 28, 2018 - 6:28 pm

Sports betting could become legal nationwide as soon as Monday.

Or it could take a few more weeks.

The gaming industry, technology providers and weekend gamblers across the country have been anticipating a decision since Christie v. NCAA was argued before the U.S. Supreme Court on Dec. 4. But the justices move at their own pace.

Their decision will determine the fate of the Professional and Amateur Sports Protection Act, which prevents sports wagering in all but four states. Under the law, Nevada is the only state that takes single-game sports bets.

New Jersey wanted in on the action. The NCAA and professional sports leagues sued to block New Jersey’s plan. Lower courts ruled against New Jersey. Now it’s the Supreme Court’s call.

Industry leaders, regulators, advocates, and critics have weighed in on what a PASPA repeal would mean. The decision will have consequences for the states that have enacted, or plan to enact, legislation to legalize sports betting, and possibly for the Silver State. Would Nevada lose market share with a proliferation of sports betting?

No effect on Nevada

“I don’t think it will affect Nevada at all,” said Nevada Gaming Commission Chairman Tony Alamo. “I think some of our licensees that have other properties in other jurisdictions will jump in and do some sports betting there because they have the infrastructure and expertise. But will it hurt Nevada? It won’t make any difference at all. At the end of the day, our handle will stay the same and our win percentages will stay the same. It’s an amenity to bring people into our gorgeous properties.”

States that anticipate massive increases in gaming tax revenue will be disappointed with what they take in because sports wagering is such a low-margin profit center, Alamo said.

“Everyone needs to keep in mind that this is a small-margin business, and it’s not going to move anyone’s needle in any of the states,” Alamo said. “We have a very beneficial tax structure here in Nevada, and I believe last year the win for all of sports gaming in Nevada was about $250 million (it was $248.8 million, according to the Gaming Control Board), divided by all our licensees that participate in sports betting. That’s not a lot of money.”

Alamo said he thinks lawmakers in some states are dazzled by the potential handle — the amount of bets made illegally, which are estimated at between $100 billion and $300 billion annually. But handle isn’t what’s taxed; it’s a book’s winnings.

Amenity to draw traffic

Alamo said sports books are built as an amenity to attract gamblers to casinos so they can spend at other resort profit centers — the hotel, food and beverage, nightclubs and gaming.

Companies that already have sports books in Nevada and resorts in other states or manage casinos on tribal land are the best positioned to profit from the repeal of PASPA. Those companies include MGM Resorts International, Caesars Entertainment Corp., Boyd Gaming Corp., Penn National Gaming, Eldorado Resorts and, to a lesser extent, Wynn Resorts Ltd., Golden Entertainment and Red Rock Resorts.

“Our legal experts seem very confident that PASPA will be overturned,’’ MGM Resorts CEO Jim Murren told Wall Street analysts on the company’s Thursdays earnings call. “With our singular dominance in sports so far, we intend to be the biggest beneficiary of commercial sports betting, should the Supreme Court overturn PASPA as early as June.”

The New York-based Jefferies Group brokerage believes the publicly traded companies most likely to benefit from legalized sports betting are the largest regional casino operators — Caesars and Penn National, as well as technology suppliers Scientific Games Corp. and IGT.

Las Vegas-based Scientific Games positioned itself in January, weeks after the Supreme Court heard the PASPA arguments, to be on the forefront of sports-wagering technology. Scientific acquired NYX Gaming Group, developer of the OpenBet sports betting platform, for $630 million and kept its CEO, Matt Davey.

Based in Las Vegas, Davey said, the company has developed the top online betting platform and sports-betting engine. It handles 80 percent of sports-betting transactions in the United Kingdom, the largest online gaming market in the world.

Scientific CEO Kevin Sheehan said his company’s goal is to be the world’s leading supplier of digital gaming and lottery technology with products for land-based casinos, the internet and mobile wagering.

OpenBet is used by top operators William Hill, Ladbrokes and Paddy Power, and Scientific has relationships with casinos and lottery outlets nationwide.

“By coupling that technology and product with Scientific Games’ physical distribution and regulated position in the U.S., it becomes a very powerful solution to what we see in the marketplace,” Davey said in a telephone interview.

States preparing

Twenty to 30 states already have sports-betting legislation introduced, with approvals completed in New York and Pennsylvania, Davey said. Integration would take a minimal amount of time in order to begin wagering, he said.

With potential startups just around the corner, there are still a few nagging questions.

Will sports betting be viable in other states with all the investment that needs to occur? With margins so narrow, what’s an appropriate tax rate? Will Congress consider federal oversight? Most advocates believe monitoring sports betting is best left to the states.

Sports book operators would have to invest in sports-betting infrastructure as well as pay taxes on any net revenue.

Casinos that offer online wagering would have lower costs and higher profit margins, according to Global Market Advisors.

“A state tax any higher than 10 percent would make it very difficult for a sports betting operation to compete against illegal operators who do not pay anything in tax and do not have the burden of paying for land-based operations,’’ said GMA.

Jefferies expects the sports betting black market to remain large even if it is legalized. Sports fans may not want to take the time and effort to register with the appropriate agencies, pay taxes on any earnings or break existing relationships they have with illegal betting operations, the brokerage said. Jefferies pointed to the cannabis market, which still has a black market even in states where it’s legal because of high taxes.

With the exception of the largest operators like MGM and Caesars, most smaller casinos will likely outsource their bookmaking to third parties like William Hill and CG Technology, Jefferies analyst David Katz said in an April 16 note on the subject.

Not a big impact

Katz doesn’t expect legal sports betting to have an immediate big impact on the casino industry.

“It could take longer to evolve than some initial optimistic estimates,’’ he wrote. However, the total impact is not easily captured by just the potential win on sports betting.

“The presence of a sports book with casino floors in Nevada does intuitively drive traffic to casino floors, especially during heavier sports-betting periods, such as the Final Four and Super Bowl,” he said.

Companies as well as their products will have to be licensed in each state. As providers of slots and lottery systems in many states, both Scientific Games and IGT are licensed at the corporate level. This will give them a “first movers advantage’’ when sports betting is legalized, Katz said.

Alamo, meanwhile, is hopeful that Nevada will be considered a resource when the industry takes off.

“I hope Nevada is in charge, because nobody does it better than Nevada,” Alamo said. “Why? Because we’ve done it for so long and we’ve done it right.”

Contact Richard N. Velotta at or 702-477-3893. Follow @RickVelotta on Twitter. Contact Todd Prince at or 702-383-0386. Follow @ToddPrinceTV on Twitter. Review-Journal writer Todd Dewey contributed to this story.

Sports Betting Spotlight Videos
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Fun photo booth at World of Concrete
World of Concrete show at the Las Vegas Convention Center sponsored by DeWalt gives conventioneers a chance for photos with giant tools. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: Laserstar Technologies
Laerstar Technologies showed off their laser engraving machines, that can be used to personalize anything from guns and knives, to medical tools and household items. (Mick Akers/Las Vegas Review-Journal)
World of Concrete Show has big equipment on display
World of Concrete Show has big equipment on display at the Las Vegas Convention Center including an impact crusher, concrete pump and a self-erecting portable concrete batch plant. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Shot Show 2019: Kalashnikov USA shows off new products
Jonathan Mossberg of Kalashnikov USA talks about new products on display at Shot Show 2019 in Las Vegas.
News Headlines
Home Front Page Footer Listing