Las Vegas casinos prepare as sports betting niche opens to the country
Prior to Monday's Supreme Court ruling, Nevada was the only state with legal wagering on sports games. But now, as states across the country look to open sports betting operations, Nevada's gambling hub is strategizing on how to adapt to the new market dynamic.
Nevada for years was the only game in town if you wanted to place a bet on your favorite team. Federal law prohibited sports wagering in most states, leaving sports books in Nevada's casinos as the only way to bet legally on football, basketball, and other sports.
That all changed Monday when the Supreme Court struck down the 1992 law.
But don't look for the casinos to turn their ballroom-sized sports betting palaces into Keno lounges. In fact, operators in the nation's gambling mecca have been expecting this day to come and they say they are ready to double down on sports betting.
"Some people look at this as a threat," Jay Kornegay, the sports book director at the Westgate casino-resort. "Others look at it as an opportunity. We've been preparing for this decision for a very long time."
Operators on Monday did not express any concerns over their Las Vegas market, and instead, signaled they are ready to embark on efforts to operate sports books in states that end up allowing them – plans that could become a land rush of sorts. Financial analysts also do not foresee the ruling having an adverse impact on the city's sports betting activity – which accounts for a relatively small portion of the total gambling revenue.
"[Customers] are telling us that if they can participate in sports betting at home, whether they live in Mississippi or New Jersey or Massachusetts, it will only increase their interest in the sport and their team, and they will absolutely want to come to Las Vegas to root their team on, whether it's in a tournament or on TV or actually physically playing," MGM Resorts International CEO Jim Murren told The Associated Press. "...The parallel would be if you think back on casino expansion throughout the United States, that has actually benefited MGM in Las Vegas because people want to go to the market leader, [and] Las Vegas is the undisputed leader in the United States. I think the same will happen with sports betting as well."
The company operates 10 major casino-resorts in Las Vegas, two in Mississippi, and one each in Detroit, New Jersey, and Maryland – just minutes away from the nation's capital.
The now-unconstitutional Professional and Amateur Sports Protection Act barred state-authorized sports gambling with some exceptions. The 1992 law made Nevada the only state where a person could wager on the results of a single game.
The high court's decision came in a case from New Jersey, which has fought for years to legalize gambling on sports at casinos and racetracks in the state.
Mr. Murren said the company will offer sports wagering at its casinos if lawmakers approve regulatory frameworks in those states. In states where it doesn't operate properties, it plans to pursue partnerships to operate sports books at existing casinos.
Mark Frissora, the CEO of Caesars Entertainment, said the company expects to provide "safe, exciting sports wagering experiences to consumers across the country" and will announce its approach to this business at a later time. The company operates casinos in 13 states.
Stock prices for casino operators and equipment makers surged after the ruling was announced. Many states have hoped their cut of legalized sports gambling could help solve budget problems, and five states have the edge in the race because they already passed laws contingent on the Supreme Court's decision.
Statistics from the agency responsible for promoting Las Vegas show 74 percent of the city's 42.2 million visitors in 2017 gambled during their trip, but it is unknown how many of those placed bets on sports. People wagered $4.9 billion on sports in Nevada in 2017. Of that, casinos won $248.8 million, and the state's estimated cut was $16.8 million, according to regulators.
Analysts at Fitch Ratings after the ruling said they expect other states to allow sports betting, but believe that won't "have a material adverse impact on Las Vegas' sports betting activity."
"We do not anticipate sports books in regional markets will materially compete with Las Vegas during marquis sporting events, such as the NCAA Final Four or the NFL Super Bowl, as Las Vegas has firmly established its attractiveness as a leisure destination," they wrote to investors.
The Las Vegas Convention and Visitors Authority earlier this year projected that 311,000 people would travel to the destination during Super Bowl weekend. The agency estimated that weekend is worth an estimated $410.1 million to Las Vegas.
Mr. Kornegay, the oddsmaker at the Westgate, said patrons don't come to the property near the Las Vegas Strip just to wager at the sports book, but they travel to enjoy the venue and all the amenities that Las Vegas has to offer, including restaurants, casino table games, shopping, shows, dayclubs, and nightclubs. He said he expects big sporting events such as the Super Bowl, big boxing, and mixed martial arts fights to continue to draw crowds.
"With the expansion of legalized sports betting across the country, there's a chance that it will be introduced to a whole new demographic who will then want to come to Las Vegas and experience the Las Vegas venue," Kornegay said. "I think most of us are really embracing this."
This story was reported by The Associated Press.