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Stadiums and sports betting

Sheryl Ring at Fangraphs adds another dimension to the SCOTUS sports betting decision story.

But there is another incentive for states to legalize sports betting aside from just basic tax revenue. We’ve talked about ballpark deals, particularly in the context of the Marlins. If states legalize betting at games and tax those bets, they can guarantee themselves a potentially large revenue stream out of the baseball stadiums they subsidize for teams — which suddenly makes ballparks a much more interesting investment for local governments. It wouldn’t be terribly surprising to see some ballparks look a little more like racetracks in the future, with the ability to place bets at the park itself. The idea of ballparks as entertainment centers, rather than simply sporting venues, is one which lends itself particularly well to this model.

But remember the potential for a patchwork we discussed. Let’s say that Pennsylvania and New York legalize sports betting and allow it at ballparks, and Missouri and Wisconsin don’t. Now you have a situation where big-market teams like the Phillies and Yankees have access to another revenue source, while smaller-market teams like the Brewers and Cardinals don’t. In an era of superteams, state laws could suddenly have a big impact.

On the other hand, sports gambling already happens all the time — and I’m not just talking about racetracks and off-track betting. I’m talking about websites like FanDuel. Many states, partly in response to PASPA, already either make gambling illegal or tightly regulate it, and that has led to a series of lower-profile cases arguing that daily fantasy sports are actually gambling — a proposition which courts have been debating for years. We’ve seen New York settle a case for millions of dollars against FanDuel and DraftKings, and this issue has arisen over and over again in courts throughout the Seventh Circuit, which covers Illinois, Indiana, and Wisconsin. This constant legal limbo has led to financial trouble for daily-fantasy companies. But the Supreme Court’s decision is likely to grant FanDuel and its industry peers a new lease on life.

Fangraphs is a baseball website so its focus is only on that sport, but there’s no reason to think that the “let’s have sports betting at sports venues” idea would be so limited. I mean, football is the 800 pound gorilla of sports betting, and I have to imagine the idea of creating that kind of enhanced revenue stream will have occurred to Jerry Jones and Bob McNair as well. If they can pitch the idea as being mutually beneficial to the local governments they have fleeced out of taxpayer dollars received stadium deals from, that could make for a strong lobbying team at the Capitol. I’m not saying this will happen – I don’t even know what the NFL’s official position on the SCOTUS ruling is – but it could happen, and if it does it will be a lot more formidable than the usual collection of casino and horse racing interests, which are usually at odds with each other. It’s worth keeping an eye on.

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