Policy Paths in Sports Betting Range from Hot to Mild: Choose Carefully

Policy Paths in Sports Betting Range from Hot to Mild: Choose Carefully

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A recent statement given to ESPN by a great operator of sports bars would seem to be fairly innocuous, just slightly less mild than an order of Buffalo wings. It read: "As the largest sports bar in America, we believe Buffalo Wild Wings is uniquely positioned to leverage sports gaming to enhance the restaurant experience for our guests. We are actively exploring opportunities, including potential partners, as we evaluate the next steps for our brand."

The public comments by Buffalo Wild Wings are proving, in one sense, to be downright inspirational. Jason Gay, a talented and entertaining columnist for the Wall Street Journal leveraged the disclosure to produce one of his most witty (dare we say wild?) columns, noting:

Buffalo Wild Wings is looking at getting into sports gambling. The local B-Dubs has always been an attractive choice for sports TV excitement, but someday you may be able to add the possibility of losing money on the Chicago Bears? Well, that is a whole new level of excitement.

Why are you not going to college this year?

Well, Dad went to Buffalo Wild Wings, bet big on the Bears, and…

Say no more…

How is that for inspired writing? The announcement got some of my literary juices flowing as well. You may recall from my last column in this space that I am quite fond of metaphors to describe the issues surrounding sports betting. And I used one to admonish legislators to be particularly careful, noting that “there are no mulligans in gaming law.”

The statement by Buffalo Wild Wings requires a few new sports-related metaphors. There is a flag on the field. Time out. Or perhaps simply: whoah.

Buffalo Wild Wings has clearly identified an opportunity. Offering its customers the ability to make wagers while munching on its truly delicious fare will help capture millennials and other demographic groups that many industries – including the lottery, pari-mutuel and casino industries – are pursuing with vigor.

That is a laudable goal, but so is the goal of doing sports-betting right. The Buffalo Wild Wings disclosure is more than inspiring. It is bracing, in the sense that a cold shower can be bracing. But it is also bracing in the sense of: Brace yourself. This is just one of many unanticipated consequences that policymakers can anticipate.

We at Spectrum Gaming Group and our recently formed offshoot, the Spectrum Gaming Sports Group have had the distinct honor of working for and with legislators and other policymakers across the entire expanse of the continental United States.

The legislators we have met range from those who are eager to do it right, to those who are eager to do it in time for the beginning of football season. While there is some overlap between these two extremes (you can do it right and be in time for the opening kickoff) the priority should be the former, not the latter.

The issues that lawmakers must grapple with as they establish their policies are complex, and will vary from state to state, but must be addressed. One critical policy goal should be to ensure that the basic principle of legal gaming in the United States remains paramount: A gaming license is a privilege limited to those who have affirmatively demonstrated their good character, honesty and integrity, as well as their business ability and similar requirements.

That principle is not universally understood by those who are new to this field, and we want to help them avoid making any rookie errors (yes, that is another sports metaphor). The concept of a license as a privilege has led to a 40-year expansion of gaming across the world, as the public trusts the brands that have affirmatively demonstrated their suitability for licensure.

Suitability also requires a commitment to responsible gaming, which means developing approved controls to ensure that all regulatory requirements – including avoiding underage or problem gaming issues – are not only addressed, but exceeded.

Moreover, we note that the entities that have proven their suitability – and that encompasses major commercial operators from Penn National and Caesars to tribal operators across the country, and on and on – have leveraged their licensure by investing billions of dollars in brick-and-mortar gaming properties. States are not only obliged to maintain their standards for responsible gaming, but they are equally responsible to ensure that the dollars invested in those facilities are not put at risk by an expansion of locations that can accept wagers.

If Buffalo Wild Wings succeeds, its efforts will likely spawn imitators. To be clear, as sports betting expands into mobile and online platforms across the country, all sorts of eateries and entertainment establishments will have opportunities to participate, but that has to be established carefully, and in a manner that does not in any sense dilute licensing standards or gaming policy.

With his tongue firmly in his cheek, Jason Gay noted that sports betting could be embraced by multiple venues, from airports to funeral homes. The reality, however, is that policymakers have to draw lines – or at least endeavor to draw lines – to ensure that sports betting follows their plans, rather than someone else’s.

There is a playbook (yep, another sports metaphor) for legislators and other policymakers to follow. Start by identifying your existing and future policy goals. Such goals could range from fiscal growth to employment and tourism expansion. Then, layer those goals on to what has already been established as universal and inviolable: the notion of a gaming license as a privilege, not a right.

Theoretically, the future in some states could look something like this:  Licenses are held by brick-and-mortar operators who operate online and mobile betting. That would allow any entity, including purveyors of hot wings, to have mobile betting in their premises.

Or, theoretically, the future in other states could look something like this: Sports-betting licenses could be as pervasive as lottery-retailer licenses. That might result in more sports betting, but could also dilute the value of existing gaming licenses, while making it more difficult for states to ensure effective responsible-gaming and related practices.

In either case, Buffalo Wild Wings would theoretically be able to meet its goal, but the pathways are far different.

We at Spectrum are not choosing horses in this race (ditto, another sports metaphor) but simply need to point out the complex implications of not thinking through every ramification of gaming policy.

Doing it right might mean missing next season, but unless I am greatly mistaken, another season will be coming along.

As a tribute to a very witty column, I will give Jason Gay the last word:

I don’t mean to spoil the party. I’m as intrigued as anyone to see where the sports gambling biz goes. But I worry there’s a disconnect between the future people imagine—and the future that will unfold. Which, come to think of it, is pretty much the business of gambling. Give me $50 on the Bears. And some wings.

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