Setting the Stage
When the Supreme Court voted 7-2 to overturn the Professional and Amateur Sports Protection Act (PASPA) of 1992, sports stakeholders across the country suddenly saw a potential path to entering the lucrative sports betting industry. But with full legal details and state laws yet to be determined, where do the opportunities lie? And how do tech entrepreneurs fit into the puzzle?
Fresh off the announcement of Indy’s new Techstars SportsTech Accelerator, a group of Indy sports tech enthusiasts gathered August 22 to discuss the topic of sports betting and its implications for tech entrepreneurship. Hosted by SportsUNITED and held at the Studio Science downtown headquarters, the event featured a panel discussion with experts representing the gaming, legal, and entrepreneurial viewpoints. Studio Science’s Chris Belli moderated the panel, which included:
Matt Bell, President and CEO, Casino Association of Indiana
Lawrence Walter, Managing Partner, SportsUNITED
Ali Miranda, Government Affairs, Bingham Greenebaum Doll, and Author, The Future of Sports Betting in the States: a Gamble on Federalism and the Growth of the Gaming Industry
The conversation covered a range of considerations, including how to regulate sports betting in Indiana, whether to include mobile and online gambling in legalization, how big data affects regulatory oversight, and the social and economic impacts of legalized sports gambling.
Considering the Issues
Matt Bell kicked off the discussion by asserting that wagering on sports makes watching sports more engaging, something most teams and stadium owners are interested in as it becomes increasingly difficult to attract fans to attend live sporting events. According to Bell, the key is creating a culture of transparency, fueled by data, to fully understand who is gambling and how to support gaming activities in a responsible, legal way.
Chris Belli added that more data leads to better-informed gamblers, which often leads to more gaming activity and potentially more revenue for the state. If put to good use, money generated from legalized sports betting could help fund infrastructure improvements, education, and other social services.
But state legislators need to legalize sports betting in Indiana before any social or economic gains can be realized. And one of the key questions that will likely be debated during the next session of the Indiana General Assembly could have direct impact on tech entrepreneurs hoping to get in on a piece of the sports betting action: whether or not to include online and mobile gaming.
Going a step further, legislators will need to agree on how to tax wagers and whether to require a state casino license for all sports betting operations. The latter could affect entrepreneurs’ abilities to enter the industry. If a license is required, those with emerging technologies that support or enhance the sports gambling experience may need to partner with a licensed casino in a supplier capacity in order to take their solutions to market.
And even those who are successful in launching a new product may face additional challenges when trying to scale. Lawrence Walter asked a key question during the panel: “How do entrepreneurs create a product in one state and then expand into other markets where sports betting laws could be different?”
Walter also suggested that, despite the challenges, entrepreneurs are key to disrupting—and, ultimately, advancing—the sports gaming industry. “Entrepreneurs can provide a better consumer experience. Often, they can experiment with more socially focused concepts than purely profit-driven larger players such as Paddy Power. Entrepreneurs are able to take more risks, which can result in better products for communities.”
With a better consumer experience comes the opportunity to create more transparency in gaming. If one goal of lawmakers is to channel people away from black-market gambling, then inclusion of mobile and online gaming in legalization would create a vehicle for collecting data on gambling trends, making it easier to forecast economic impacts and identify potential for negative social outcomes.
Regardless of the uncertainty surrounding sports betting in Indiana, the future for sports tech entrepreneurs holds a lot of promise. With forward-looking vision and an opportunistic spirit, Indiana’s legislators have the chance to bolster the state’s economic engine by legalizing sports betting. Miranda summed it up well: “As long as we move forward in a way that isn’t restrictive, the entrepreneurial opportunities are endless.”