It’s been a little more than a month since Governor Larry Hogan signed HB940 into law, thereby legalizing sports betting within the state of Maryland. Already, businesses and media commentators are speculating, in quite a different sense, on the long-term impact of the new legislation, and particularly how it will help to bring the state’s finances into better health after the disaster that was 2020.
Understanding the market
The emergency bill went into immediate effect, but of course it takes time to establish the necessary infrastructure for a whole new industry, and sports betting will officially launch in the fall. That sounds far off, but in reality, three months will go by quickly. Already, strategies are being formed.
It’s important to understand the drivers behind sports betting. The phrase conjures images of people with encyclopedic knowledge of horse racing or baseball statistics studying the form, poring over the odds and knowing when and where to place a bet to make a killing. Sure, such individuals exist, but they are a tiny minority in the sports betting community.
Most are just people who enjoy sport and who want to get behind their team. The odds are only of academic interest and will not affect the way they bet. A football fan in Baltimore will place $10 on the Ravens to win with the same attitude that he will put on his Lamar Jackson shirt before the game. He’ll do so regardless of the opposition or the odds and will see the $10 as a worthwhile expenditure. If the Ravens win, so does he, and if they lose, well sport is all about disappointment as well as joy.
Understanding the nature of the market is vital, and will influence the nature of the businesses that apply for the 60 sportsbook licenses that are available. These are split into two categories, Type A and Type B. The former will be taken by the big-name providers – the state’s large casinos, horse racing facilities and even sports teams themselves.
Social sport betting brings new possibilities
Social sports betting is a segment of the industry that taps into the ethos of betting on sport being first and foremost about increasing the fun factor as opposed to trying to win money. It brings all sorts of possibilities and could be an important consideration for those who might apply for a Group B license. However, it has been difficult for gambling companies like the ones listed here to quantify it. It’s just as much of a puzzle for the regulators so this is a debate that could run and run, but there is no doubt that the area of social sports betting has plenty of potential. Here’s how it works.
In conventional sports betting, the gambler takes on a licensed bookmaker. To use our Ravens example, it means that if they are taking on the Steelers, our Baltimore fan places his $10 on the Ravens and the bookmaker is effectively backing the Steelers. With social betting, you are going up against someone else – let’s say the Baltimore fan has a college buddy from Pittsburgh. They each put $10 in a pot, and the person whose team wins gets to keep the money.
Of course, that describes social betting in its simplest and purest form. The online age makes it relatively simple for variations on this theme that might involve tens, hundreds, thousands of fans. More organized social betting also sets odds for each game as opposed to the simple even money example we gave above.
The point is that social betting taps into the fun side of the pastime and is a perfect fit in the Facebook and Twitter age. But doing it right means somebody needs to step in to provide a platform, devise a way of setting the odds, ensure wagers are held safely and so forth. There’s no doubt that it presents an intriguing opportunity, but it falls outside the scope of traditional sportsbooks.
A pioneering opportunity
Will we see online social betting platforms popping up over the coming months and applying for Type B licenses? Time will tell, as this is largely uncharted territory. It’s been discussed in various circles, but the states that have legalized online sports betting so far have only considered it conceptually, and none have made any real move to put it into action.
Type A licensees are unlikely to have any real appetite for social sports betting. Indeed, some are already striking up strategic partnerships with traditional providers. For example, Maryland Live! has teamed up with FanDuel to provide sports betting at its facility in Arundel Mills and the Horseshoe Casino in Baltimore is owned by Caesar Group, which acquired the William Hill betting business last year.
That leaves a potential gap in the market. Social betting has the potential to change the whole nature of an industry that is worth more than $85 billion worldwide, and Maryland stands in a unique position of being able to take up the gauntlet and pioneer the concept statewide. Licenses are there for the taking and will be made available to businesses in the state that have the drive, know-how and incentive to make a success of social sports betting. Whether that will come about remains to be seen, but one thing is beyond doubt – there are interesting months ahead and the whole world will be watching.