The Line on Betting in Delaware
8/13/09 - Philadelphia Daily News - View Source
By Dick Jerardi
AMERICANS LOVE sports. Americans love to gamble.
We play. We bet. We bet on what is played. But we definitely bet - on just about anything.
The American Revolution was partially financed by lotteries. Nevada does not exist without gambling. State governments, desperate for revenue, have backed lotteries for decades and casinos for years.
Serious legal sports betting, however, has been isolated in Nevada. One could make a case that if the federal government legalized sports betting on a national basis over the Internet and taxed it, the national debt could be retired and there would be health care for all.
That is an argument for another time. What is no longer arguable is that, barring a legal setback and if all the equipment is in working order, serious legal sports betting will come to Delaware on Sept. 1. Players will be able to bet on baseball, college football and, the Holy Grail of American sports betting, the NFL. In fact, patrons will be able to bet on just about any games from anywhere in any sport, just as they do in Nevada.
What nobody knows yet is how many people will leave the comfort of their living rooms to drive to one of Delaware's three racetracks (Delaware Park, Dover Downs, Harrington Raceway) to make those bets. With illegal bookmakers just a phone call away and offering credit, how many will want to do this legally, show up with cash and start firing?
"We want to get up and live by Sept. 1, so that everything has run through its trial period before the NFL starts on the 10th," Delaware Park general manager Andrew Gentile said.
Nobody really knows how much traffic will come to the racetracks or how much action will come with that traffic.
"There's a lot of different estimates," said Gentile, who grew up in Washington Township, N.J., went to Washington Township High and The College of New Jersey. "I'm really hoping it's going to be a home run, really bring a lot of excitement to the property, bring in people to play slots. We're getting a lot of phone calls. Just based on the buzz, we're really excited about it.
"I don't know if I could actually give you a dollar amount on it, because nobody on the East Coast has ever had anything like this."
Brandywine Bookmaking, run by University of Delaware and Widener Law School graduate Joe Asher, just won the contract to be the risk managers for Delaware's sports betting operation. Brandywine will partner with Scientific Games, a gaming company based in Mount Laurel, N.J., that will supply the technology.
Brandywine will set the lines. If it sets bad ones, the movement of the money will let it know and it will adjust.
At Delaware Park, the sports-betting windows will be on all three levels, side by side with the parimutuel racing windows. The tellers will wear different shirts for sports and racing. Just as in Nevada, players will be able to bet on single games against the spread. There will be prop bets, future bets, halftime bets, and almost all the other kinds of wagers any sports bettor already understands.
If, say, you want to bet $100 on the Eagles, giving six points to the Redskins, you will have to give the teller $110. If you win, you will get $210 back. If you lose, you lost your bet, including that 10 percent. That 10 percent "vigorish," or "juice," is how so many bookmakers have made a living for so long. If the Eagles win by six, it is a "push" and there is no "winner" on that game. The bettor gets the $110 back.
"There are 30 million people within a 3-hour drive," Asher said, hopefully.
The Delaware State Lottery is the overseer of the sports books. There will be a limit on the amount of money one can bet. The Lottery will have the final say on the limit and will vary by event. Gentile said the limit will be modeled after typical numbers in a Nevada sportsbook and that the initial betting limits on football games will be $10,000 for the NFL and $5,000 for college games. The over/under bets will be $2,000 for the NFL and $1,000 for college games.
Delaware's slot machines have fueled the horse-racing product. Sports betting will do the same.
"My expectation is that sports betting will bring in a different player, and we might actually be able to drive hopefully 10 to 20 percent improvement on our racing handle," Gentile said.
The revenue from sports betting will be divided among the state and the tracks. Scientific Games will get its income from a percentage of the "win," and Brandywine will split that with Scientific Games. Whatever is left will be divided 50-50 among the state and the tracks. Delaware Park's horsemen will get 9.6 percent of the track's share in the form of purses.
So how much are we talking about?
"I can tell you we've been getting phone calls into our marketing department from as far north as Connecticut and as far south as North Carolina, wanting to know who do they contact to do bus tours and what hotels in the area can they book rooms at," Gentile said.
There is a billboard advertising Delaware sports betting on southbound I-95 in Philadelphia and another one in Atlantic City.
If sports betting in Delaware does hit, you know other states, desperate for the kind of revenue that prompted Delaware to go all-in on sports betting, will be screaming for it. Because of a 1992 federal law prohibiting gambling on sports, only four states (Delaware, Nevada, Oregon and Montana) can offer sports betting. Those states had pre-existing statutes, so they were grandfathered in when the federal law was passed.
Which did not stop the NFL, NCAA and other major pro sports leagues last month from going to court to try to stop sports betting in Delaware. Last week, a federal judge in Wilmington turned down the leagues' request for an injunction to stop it. On Monday, the leagues asked the 3rd U.S. Circuit Court of Appeals in Philadelphia to expedite their appeal of that decision.
A trial on the merits was scheduled for Dec. 7 in Delaware. Meanwhile, Sept. 1 is coming fast. The leagues and the NCAA are upset that there will be single-game wagering this time, as opposed to the parlay cards Delaware tried in 1976 without much success.
With single-game betting, the leagues argue, there is more skill involved than chance, and such wagering would violate the Delaware Constitution.
"The underground market size for [sports] betting, people have thrown out numbers anywhere from $300 [billion] to $500 billion," Gentile said. "Based off the state's estimate, they're estimating that we will get $150 million [annually] in handle. If there is already $300 [billion] to $500 billion being wagered in sports, how is $150 million in Delaware going to affect the integrity of the game?"
In reality, a legalized, regulated sports-betting concern is far more likely to spot unusual betting patterns than far-flung illegal operations.
The leagues might just feel they have to do it. Even though Americans love to gamble, we don't really want to let anybody know how we feel about it. So the powers that be apparently have to, at least, act like Capt. Louis Renault in "Casablanca."
"I'm shocked, shocked to find that gambling is going on in here," Renault said as the croupier handed him a wad of cash.
It is part of the culture in Great Britain, too. Only they are not prudish about it. Betting shops are on every corner.
Maybe somebody should offer the NFL a piece of the action. Wonder whether its stance might change then.
The NFL has a great product, but does anybody think television ratings would be as huge without the point spread? One could make a strong case that the two greatest inventions in football were the forward pass and the point spread, not necessarily in that order.
Check out the queues at Delaware Park around 12:45 p.m. on Sunday, Sept. 13. They likely will be quite revealing.
That $150 million estimate probably will be very low. The original slots estimates were really low. In 2008, $2.58 billion was bet on sports in Nevada. The "win," or revenue, from that is approximately 6 1/2 percent ($168 million).
Nevada has a population of about 2.5 million. Thousands of tourists like to bet on anything and everything. There are, however, no professional sports teams in proximity - unlike Delaware, which is near the homes of so many professional teams whose fans might like to back their teams with a few bets.
"It's really exciting to be chosen by the state to do this," said Asher, who grew up in Wilmington, started going to the races as a kid at the old Brandywine Raceway, worked for publicity director Marv Bachrad as a 16-year-old at the Big B, was Gene Hart's backup announcer there, the backup at Dover, called the races at Harrington, and handicapped Delaware Park races for the Wilmington News-Journal. "We're focused on putting out a good product, and the customers will vote."
Asher's company manages race and sports books for Nevada casinos and is known for its prop bets. It put up a point spread for every 2008 NFL game before last season at The Plaza in Las Vegas. The betting menu in Delaware will be very large. You can check out the company's Nevada menu at betatluckys.com. The company currently runs 11 properties in that state.
Brandywine Bookmaking (named after the track of Asher's youth) will take the risks. The state is not in that business. So Brandywine's odds will need to be good.
"Where we've really sort of made a name for ourselves is by coming up with interesting and unique proposition-type wagers," Asher said.
Odds boards are being installed at Delaware Park this week. Communications lines are about to be installed. Training will start for the tellers next week. Testing is tentatively scheduled for late August.
Slots have been huge for Delaware's racetracks and the state. But slot revenue has been down the last 18 months, given the economy and the fairly new competition from Pennsylvania. So, sports betting is coming to Delaware.
"My sense is that if this is a home run, all the other states will be clamoring for it," Gentile said.
The sports-betting windows are due to open in 19 days. The fall Sunday scene at tracks likely will look like a large sports bar where people don't have to bet by phone. They can just walk up to a window with their cash and make a play.