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http://msnbc.msn.com/id/6517657/
Internet might doom sports books
Online betting is booming, and Vegas hurting to keep up
Though estimates vary, the worldwide online sports betting industry should lure at least $3 billion in sports bets this year, surpassing the $2.5 billion or so raked in by Las Vegas.COMMENTARY
By David Sweet
NBCSports.com contributor
Updated: 4:46 p.m. ET Nov. 18, 2004For a sports fan bearing a wallet packed with hundred-dollar bills, nothing beats a weekend in Las Vegas during football season.Ensconced in a sports book packed with television screens the size of outdoor billboards, he can scream over his $500 payoff on a garbage-time field goal. With parlay cards scattered about and gusts of cigar smoke hovering nearby, he can high-five a stranger when Green Bay quarterback Brett Favre zings a touchdown pass against Minnesota — even though, as a die-hard Jacksonville supporter, he wouldn’t care about the game any other weekend.
But in decades hence, the sports book may go the way of the XFL.
The reason? Despite the detritus of failed dot-com companies and sputtering Web advertising as the 21st century began, online sports betting has marched on as a major Internet growth industry. Some sites have doubled their wager intake since 2002. Though estimates vary, the worldwide industry should lure at least $3 billion in sports bets this year, surpassing the $2.5 billion or so raked in by Las Vegas. Wagers are expected to increase exponentially every year as more people in the world click on to the Web.
“Once they try betting online, Vegas seems a hassle,” says Rob Gillespie, founder of the BoDog sportsbook at http://www.bodog.com. “If you go to Vegas, books have from 5-25 windows, and they cannot accommodate more people than that at once. We can take thousands of simultaneous users. Shopping for the best line for your play in Vegas is difficult as you have to physically go from book-to-book. Shopping for lines on the Internet takes seconds.
“Take those facts, plus not having to spend time and money driving and parking to place your bet and cash your tickets, and it is easy to see why sports betting online is so popular.”
The popularity — especially among computer-savvy college students — has continued in the U.S. despite the fact Internet betting is considered illegal by the federal government. Of course, that has never stopped illegal sports gambling in general, estimated to be at least an $80-billion-a-year industry by the National Gambling Impact Study Commission.
While losing craps and blackjack business to states that are approving new casinos at record rates, Nevada remains the sole state in the U.S. to offer legal sports gambling. Faced with relatively recent sports book competition via the Web, how is Vegas, the hub of sports betting, fighting back against never-ending promotions (Sportsbook.com offers Half Price Basketball Fridays) along with the frequent rebates and bonuses offered by online sites?
The town, perhaps lulled to sleep by its monopoly over the years, has remained hidebound. Rarely are specials offered. Unknown blackjack players get show tickets or a comped room for frequent play, but not sports bettors. National advertising is almost nil for sports books.
In the midst of a 14-hour day, Robert Walker, director of the race and sports book at The Mirage, offers a dour outlook for sports books.
“I’m pessimistic,” said Walker, sitting in an office replete with eight TV screens and three computers screens. “There’s no growth, except when another (Steve) Wynn property opens up. We’ve seen our handle (amount of wagers) go down slightly every year, though our hold percentage (wagers they keep) goes up.”
Aside from citing sports book consolidation and the law against out-of-state phone betting as hindering his business, Walker sees online sports betting as a growing threat.
“I’m sure we’ve lost business to offshore books. There’s no doubt about it,” he said.
During the weekends, Vegas sports books are 100 percent dependent on tourists. Which begs the question: Why would a wannabe bettor who owns a computer in Schenectady, N.Y., endure a day-long trip to Nevada, spend hundreds of dollars on airfare and a hotel, and suffer stomach pains from the $5.99 buffet just in order to place a $20 parlay on the Jets and Giants?
Aside from guaranteeing winning bets will be paid (online sports books drop by the wayside weekly), Vegas still boasts one advantage the Internet can never replicate: the experience.
“There’s excitement. There’s camaraderie,” Walker said. “The sports book exemplifies what Vegas is all about.”
Later that afternoon at The Mirage sports book, Walker’s words ring true. With less than a minute to go and Oklahoma leading Nebraska 30-0, a Cornhusker ballcarrier lumbers 60 yards into Sooner territory. With one second left, the quarterback spikes the ball to stop the clock, and the placekicker trots on the field. Though few Nebraska fans at the game applaud his meaningless three points, the scene is different in Las Vegas, where cheering erupts and a bettor jumps from his chair and lands on his knees, exulting in the fact that he could cash his ticket after beating the 30-point spread.
Actually, maybe online betting even wins in this category: fewer hospital trips to fix broken kneecaps.
David Sweet is a sports business writer in Chicago. He can be reached at [email protected]
