Nevada will remain a sports betting mecca but its proliferation around the country could ultimately cut into visitation during March Madness and the Super Bowl, with the biggest threat to the state coming if it’s legalized in California and Arizona, some experts said Thursday.
UNLV hosted a panel discussion on what the nationwide expansion of sports betting means to Nevada and whether it can remain the capital of the activity. Four states – New Jersey, Delaware, Mississippi, and West Virginia – have legalized the sports betting and a New Mexico Indian tribe launched a sportsbook after the U.S. Supreme Court in May stuck down a federal ban. Other states are expected to follow.
“Nevada will always lead in sports betting. We will be like the big leagues to the minor leagues, and people wagering in other jurisdictions will always come here,” said Vic Salerno, president of USBookmaking, which operates the sports book at the Santa Ana Star Casino in New Mexico for the Tamaya Nation at the Pueblo of Santa Ana.
From left, John English, Joe Asher, Mike Davey, CEO of SG Digital, and Vic Salerno
“But I think in a way the hotels will get a little bit hurt by special events like the Super Bowl and March Madness because if you are on the East Coast and with facilities in New Jersey, that’s going to keep people from coming,” Salerno said.
When it comes to the NCAA basketball tournament, Las Vegas has long attracted college students from all over the country. With sports betting on the East Coast and Midwest, there will be similar parties like in Las Vegas where those students can wager on games, he said.
“Why spend all of your money coming here when you can use it to bet on games there,” Salerno said.
Mark Lipparelli, former chairman of the Nevada Gaming Control Board and founder of Gioco Ventures, said casinos aren’t dramatically impacted by sports wagers. However, anything “that looks like competition can have a negative impact on visitor volume.”
Lipparelli said Nevada is like a regional market fed by visitation from California and Arizona. Expanding sports betting to those two states – where people can bet football on the weekend – would have a greater impact than expansion elsewhere in the country.
“We are still the preferred destination by any stretch,” Lipparelli said. “If they have travel alternatives at a lower price and better weather and other kinds of amenities, that is something to be mindful of.”
Not everyone, however, was concerned that the sports betting expansion would hurt Las Vegas, even for big events.
William Hill US CEO Joe Asher has long believed the expansion of sports betting would be good for Nevada.
People across the country have bet via the black market, and they’re now being moved to the regulated market, said Asher, whose company operates more than 100 Nevada sports betting sites and recently launched sports wagering in the newest markets.
The expansion has enabled William Hill to hire more staff in Nevada.
“My approach is whatever is good for MGM and Caesars is good for William Hill,” Asher said. “I haven’t seen any indication at all that handle is dropping off because people aren’t flying out to Las Vegas from New Jersey. We have seen in New Jersey that people have quickly migrated from the black market to the legal market.”
In September, New Jersey sports books took in $184 million in wagers with online and mobile wagering responsible for $104 million of the handle. The books held $24 million in revenue.
Asher doubted Las Vegas would be hurt during March Madness and the Super Bowl. The last Super Bowl, for example, had record-setting $158.6 million in wagers.
“It’s the weather,” Asher said following the discussion. “It’s going to be cold in Atlantic City. Vegas is far more accessible. We have direct flights from so many places. Is there some guy that’s going to go to Atlantic City rather than Vegas? Sure. I’m not worried about it.”
As for any possible expansion of sports betting in California in the future, Asher said nothing causes him to be concerned about the health of the Nevada economy.
“What we have our here is so unique,” Asher said.
Panelists said Nevada has a lower tax rate than other state gaming jurisdictions, which helps make other states less competitive. Nevada casinos can also offer better odds. It was suggested, however, that state policy makers make sure regulations help sports betting grow and thrive.
Nevada has $5 billion in sports wagers annually. Casinos hold about $250 million before operating and marketing expenses, said John English, a partner with Global Market Advisors and moderator of the panel discussion. Sports betting contributes between 2 percent and 2.5 percent of monthly casino revenue.
Lipparelli said wagers have grown from $3.5 billion in less than five years because the state legalized mobile wagering. That move added new customers. He added, however, that customer signup continues to be an issue. He cited the importance of making it easier for people to participate in sports betting.
New Jersey allows people to sign up for sports wagering accounts remotely, but Nevada requires customers to physically go into a casino.
“What works in Nevada may not necessarily work in other states,” Asher said. “I think in-person is the right model for Nevada, but probably would not work if they did that in New Jersey. In Nevada, 99.9 percent of the population lives within 15 to 20 minutes of a casino.”
In New Jersey, the sports books are concentrated in Atlantic City. The two racetracks with sports betting are in Northern New Jersey. Many people would have to drive more than an hour to sign up. Asher said that’s “not realistic” given the presence of illegal “black market” bookies in the state.
If remote sign ups were allowed in Nevada, Asher said someone might get a license in a rural county and do a marketing-driven model.
Salerno said he disagrees with Asher and said requiring an in-person sign up is anti-competitive and self-serving.
“This is America,” Salerno said. “I believe in everybody having that opportunity, otherwise I wouldn’t be sitting here in front of you today. If anything, (Nevada) has been too conservative. We have to loosen up to be competitive with these other people.”
Asher said no one is going to move from Nevada to New Jersey because they can sign up for an account remotely.
“That is kind of silly,” he said.
