While legal land-based sportsbooks seem possible, legal US online sports betting seems like a far cry.
Verizon Communications Inc. is meeting with gaming experts and business consultants to determine whether to enter the multi-billion dollar sports betting market. The telecommunications giant anticipates entering the sportsbook industry, if the U.S. Supreme Court strikes down PASPA and legalizes sports betting at the federal level of government.
Last year, Verizon bought Yahoo! for $4.5 billion. With one of the largest English language search engines among its assets, Verizon believes it could launch a profitable sports-focused online gambling venture.
The Supreme Court heard arguments in New Jersey’s 5-year legal challenge to the Professional and Amateur Sports Protection Act (PASPA) on December 4, 2017. The nine justice are expected to hand down a ruling on the case sometime in the first half of 2018.
Verizon Online Sports Betting
Over a dozen US states have prepared or are preparing for legalized sports betting, by passing regulations on land-based sportsbooks. Twenty states signed an amicus brief in support of New Jersey’s sports betting challenge, indicating that nearly half of the United States might legalize land-based sports betting, if the PASPA is struck down.
Complicating the matter for Verizon would be the fact online and mobile sportsbooks would remain illegal. Under current US Justice Department interpretations, the laws which govern Internet sports gambling are the 1961 Wire Act and the 2006 UIGEA. The Wire Act rules that interstate sports betting over telephone lines is illegal, while the UIGEA states any gaming activity banned under the Wire Act (for phone lines) is banned on the Internet, as well.
Considered Sports Betting Before
Those familiar with Verizon’s decision making process suggest that the telecommunications corporation might choose to stay out of the gaming market. Previously, Verizon executives considered entering the gambling industry, but decided that the business, dominated by casino operations, which involve tough competition.
Still, Verizon wants to diversify its telecommunications business in the wake of the Yahoo buyout, so leveraging Yahoo’s online business into a Internet gambling is tempting. The Verizon/Yahoo combination is formidable. Verizon has over 100 million subscribers, while Yahoo has over 1.3 billion users worldwide.
Verizon Online Gaming Buyouts?
One option would be for Verizon to buy existing online gambling brands, which would help the company break into the market with greater speed. Verizon used the same strategy in 2014 to get into the streaming video market, when it purchased Intel Corp.’s OnCue video service.
If it chose to get into online sports betting, Verizon might have an edge over many competitors. Verizon has live streaming deals with the National Football League (NFL) and National Basketball Association (NBA), so it would have the ability to stream NFL and NBA games live while offering live/in-play betting, much like the English Premier League (EPL) does.
Verizon/NBA Streaming Deal
Just last week, Verizon signed a new streaming deal with the NBA. At the time, NBA Commissioner Adam Silver and Chief Executive Officer Lowell McAdam discussed instituting quarter-by-quarter fantasy betting through daily fantasy sports platforms.
Adam Silver previously has discussed his opinion that sports betting should be legalized and the commissioer clearly wants to position his league to reap direct economic benefits from legalized sports betting.
Legal Sports Betting Worth $15.8 Billion
Eilers & Krejcik Gaming estimates that legal and licensed US sports betting could generate as much as $15.8 billion a year. It is estimated that 44 million Americans bet on sporting events each year, with an estimated 97% of those gamblers placing their bets in the illegal gaming market, either through online sportsbooks or local bookies. E&K Gaming estimates that Americans bet $244 billion on sports, if one includes black market gambling.
Yahoo Sports has a huge online sports fan community. In 2015, Yahoo attempted to get into the online daily fantasy sports market with Yahoo Sports Daily Fantasy, but its DFS product is a distant third behind DraftKings and FanDuel. That experience could have an effect on Verizon’s decision, though online sports betting is a vastly larger potential revenue stream.
