Regulators walk a fine line when it comes to novelty sports betting markets

Coronavirus Cancellations Highlight Need For Off-Season Sports Betting Options

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With professional and collegiate sports suspended due to the coronavirus outbreak, bettors are looking for other ways to scratch the itch. Unfortunately, it’s particularly slim pickings for regulated US sportsbooks at the moment.

The temporary shutdown of American professional sports hit suddenly. It began with the NBA, which put its season on hold on March 11 after two Utah Jazz players tested positive for the virus. Most other professional sports leagues, including the NHL and MLB, made similar announcements shortly thereafter.

It’s normal for US sports betting to go through an annual lull as the calendar gets sparse in the months after hockey and basketball wrap up. But this year’s off-season will not only start earlier and potentially last longer, it also lacks most of the usual alternative betting options like spring baseball.

Sports shutdown comes at the worst time

The gambling industry is in chaos amid these cancellations, and the timing couldn’t possibly be worse for the US. The Supreme Court struck down the federal prohibition on sports betting less than two years ago, and the total amount of legal wagers placed since then has been rapidly closing in on $20 billion.

Most states with regulated sports betting are still in their first year of operation. Many were enjoying a post-launch growth phase, with revenue increasing each month right up until February.

March should have been a record month. It has historically been the biggest month each year for US sports betting — legal or otherwise — thanks to NCAA basketball’s annual March Madness tournament.

Unlike the professional sports leagues, which merely postponed the ends of their seasons, the NCAA will not hold the tournament at all this year.

Horse races, obscure leagues, and virtuals

It isn’t only US leagues shutting down; most countries have taken similar measures.

Sportsbooks have had no choice but to move down the list as one league after another drops off of it. Markets like Belarusian soccer are now front-page fixtures, though it’s probably a matter of time before these are put on hold too.

In the US and UK, horse and greyhound racing are among the few sports still active. Races like the Louisiana Derby are mostly happening with empty stands, as the sport itself is a comparatively low-risk activity with little contact between participants their equipment.

The problem with racing as an alternative is twofold.

For one thing, it’s simply not that popular. Compared to Ukrainian table tennis, it might be, but ponies no longer draw the same attention they did in their heyday.

What’s more, race betting has been legal in the US for a long time. It, therefore, lacks the novelty of other forms of sports betting, and new sportsbooks have to compete not only with each other but with long-established racebooks.

Virtual sports are another popular option in Europe that are only starting to catch on in the US. These are nothing more than simulated sports events with randomized outcomes. While they’re considered casino games in the US, bet365 did receive permission this year to integrate virtual sports products into its online sportsbook in New Jersey.

Is it time for esports betting to shine?

Another option is esports — computer and video games played competitively. The most popular genres are first-person shooters and various kinds of real-time strategy games.

Not all states with legal sports betting include esports at the moment. In fact, because the industry is so young and esports betting not particularly popular, many regulators haven’t yet had to make a decision about them.

Nevada has allowed esports wagering for a while, but it’s been slow to catch on elsewhere in the US. New Jersey allowed it for the first time last November on a one-time trial basis for the League of Legends World Championship Final.

One problem with these games, however, is that they tend to have complex mechanics. Strategy titles can be particularly difficult to follow for those who aren’t players themselves.

Video games based on real-world sports — such as those from EA Sportsare sometimes played competitively and would be more easily understood, but they simply aren’t very popular within the esports community.

Coronavirus or not, chess betting might be coming

As with esports, tournaments for mind sports like chess, bridge, and poker are sometimes available at international sportsbooks.

Poker is off the table during the outbreak because of casino closures. Meanwhile, the demographics for bridge aficionados and online sports bettors don’t really overlap all that much. However, at least one sportsbook wants to bring chess betting to the US market.

PointsBet communications director Patrick Eichner indicated that his company had asked regulators for permission to offer lines for the Candidates Tournament currently underway in Russia. It would do the same for future tournaments if allowed, including the World Championship, which takes place toward the end of the year.

Unibet would presumably want to get in on that action as well since it has a sponsorship in place with the heavily favored current world champion Magnus Carlsen.

Regulators have a fine line to walk

Illegal offshore gambling sites don’t have to wait on regulatory approval, so they offer all these options and more. Desperate bettors are itching to get money down on anything they can, and offshores will book action on anything from the weather to how quarantine measures affect traffic for porn sites.

Using these bookmakers is not without its risks, however. There are no customer protections and no guarantee of integrity, especially for non-standard proposition bets. These sites also don’t pay taxes or have an obligation to segregate funds.

It’s, therefore, in the best interest of both the customer and the state to channel players to legal sites. By extension, it’s in the best interest of regulators to allow as many types of bets as they safely can.

That said, customers have an expectation that legal betting will be safe. There are good reasons to worry about betting on markets with real-world consequences like elections. Regarding esports, there must be assurances that players can’t exploit bugs in the software or otherwise cheat.

It’s a balancing act, in other words.

The current situation has shown in extreme form, however, why regulators would be wise to broaden the purview of betting a bit. Provided the appropriate protections are in place, there’s not much harm in taking a somewhat liberal view of what constitutes a “sport.” There is, however, a significant upside to giving players something to bet on legally during the off-season.

Or, say, a global pandemic.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for Online Poker Report, he has been writing about poker and the online gambling industry in various capacities since 2014.
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