June 7, 2018 5:30 a.m. ET
States around the country are moving to legalize sports gambling, but those moving forward should take notice of what happened this year with Las Vegas’s first major professional sports team.
Enthusiastic local fans kept betting—and mostly winning—on the Vegas Golden Knights of the National Hockey League, hurting Nevada sportsbook operators. In a playoff game last month, a late goal by the Golden Knights reversed the fortunes of Nevada bookmakers including William Hill US. The betting operator went from recording a slight loss on the game to a huge one, a swing of over $100,000.
Events like that one offer a glimpse into the challenges betting firms are likely to face around the country.
A U.S. Supreme Court decision last month overturned a decades-old federal ban on sports wagers in most of the country, daftar poker but a separate federal law that remains on the books restricts interstate money transfers involving bets. That means each state must essentially operate as its own betting market, increasing the risk for bookmakers who might struggle to attract wagers on teams opposing popular local favorites.
Joe Asher, chief executive of William Hill US, a subsidiary of British betting firm William Hill PLC, said the experience this season with the Golden Knights has shown how lopsided betting action and a successful local team can lead to significant volatility for companies like his. “They win; we lose,” he said.
Las Vegas could be further tested when the National Football League’s Oakland Raiders move there, scheduled to begin with the 2020 season.
The overall economics for sports betting are relatively straightforward: Operators try to set the odds in such a way to entice equal amounts of money on each side. That can mean sweetening the deal for underdogs by widening the point spread needed for the favorite to win, or tweaking the payouts in other ways to make bets more attractive on both sides.
As long as the money on each side of the bet is close to even, the bookmaker or casino is well positioned to earn money because of the transaction fee the operator charges.
However, popular local teams—such as the Golden Knights in Las Vegas—can make it tougher for casinos to find that split. That problem could crop up in several states expected to be the fastest adopters of regulated sports betting, such as New Jersey. For example, the NFL’s New York Giants or Philadelphia Eagles, both popular among New Jersey residents, could attract much more money than out-of-state opponents.