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Legal Sports Report

Five Stories To Watch In Sports Betting And Daily Fantasy Sports For 2018

sports betting stories 2018
In reality, one story in the sports betting and daily fantasy sports space is far more important than all the others in 2018: the verdict in the New Jersey sports betting case in the US Supreme Court.

But we’ll give you five anyway. (And here are five more, for good measure.)

What will happen in the NJ sports betting case?

The future of sports betting in the United States will be determined on a single day this spring.

A verdict in Christie vs. NCAA — the case in which New Jersey is trying to legalize sports wagering — could come as soon as January, but is likely to come in March or later. Oral arguments took place in December, and by all accounts, things went well for the NJ side of things. Many believe a majority of justices will side with the state over the leagues that are litigants on the other side, including the NFL, the NBA, the NHL and MLB.

New Jersey is arguing for the federal ban on sports wagering — the Professional and Amateur Sports Protection Act — to be struck down as unconstitutional. There are a multitude of possible outcomes, but the three most likely are:

  1. The Supreme Court agrees with NJ and PASPA comes off the books entirely.
  2. New Jersey wins narrowly, and it is allowed to partially repeal its own laws to have sports betting. Other states would have to do something similar to New Jersey — legalizing the equivalent of unregulated sports wagering — to follow suit, an unlikely scenario.
  3. New Jersey loses and the status quo of no single-game wagering outside of Nevada persists.

All of those scenarios present interesting topics to watch in 2018, as well, especially the first one.

Which states pass sports betting laws?

If PASPA is struck down, there will be no shortage of states trying to take advantage of the ability to offer sports gambling within their borders.

An expansion of sports wagering is likely to happen quickly in the US if NJ wins. We already have several states potentially ready to offer sports betting in the event of an NJ victory: Pennsylvania, New York and Delaware.

The list of other states that will give legalization and regulation a look in the new year seemingly grows by the day. Before and after the SCOTUS verdict, what these states will do will shape the immediate future of sports wagering in the US. The domino effect of PASPA being struck down would be a likely flood of states that legalize wagering in short order.

If New Jersey loses (or wins only narrowly, not on the full scope of PASPA), what the pro sports leagues do next is likely important.

What will the leagues do on sports betting?

While the NCAA and the pro sports leagues are fighting New Jersey, not all of them have the same vision for sports betting in the US:

  • The NCAA has never been in favor of any type of legalized wagering. If sports betting starts to proliferate in the US, it could ask for carveouts excluding college sports betting. It may also seek to block it entirely.
  • The NBA has said it wants a federal framework for sports betting and that it’s going to lobby Congress for regulation.
  • The NFL has remained against more regulated sports betting in the US, despite the fact that the Oakland Raiders are moving to the home of US sports betting, Nevada. It could become a topic of division for owners next year.
  • Major League Baseball and the NHL have been quieter than the rest. But MLB seems to be moving closer to the NBA’s position. And the NHL moved a franchise to Vegas as well.

If New Jersey wins, the leagues will be scrambling to come up with a PR strategy, either separately or together. The leagues want to have a say in how sports wagering goes down in the US, after all, and they want to make such a rollout as beneficial to them as possible. The NCAA will probably be on an island apart from those efforts.

If New Jersey loses, what do the leagues do? That would be interesting to see, as well. For instance, will the NBA continue to actively lobby for Congressional action, or will it pull back with the threat of a New Jersey victory in its rear-view mirror?

Regardless, the tack the leagues take with regards to sports wagering will be one of the most interesting stories in the space next year.

Will FanDuel be sold?

Let’s start here: DraftKings and FanDuel are not going to continue in the DFS industry as they are into perpetuity. A merger fell through last year and isn’t coming back. DraftKings has made no secret that it eventually wants an IPO.

FanDuel has not been as overt about what it wants, but it’s also not a secret in the industry that it’s been shopped around. The departure of CEO Nigel Eccles and replacement by Matt King seems to point toward a potential sale.

Who would that buyer be? There a number of potential suitors:

  • Existing gaming companies that could use FanDuel as an entry point for DFS, sports betting or both.
  • Media companies that could benefit from owning a DFS platform.
  • Existing shareholders.

How much will FanDuel sell for? Likely far less than the valuation of over a billion dollars it once enjoyed in the heady days of 2015.

Will it sell? If I were setting a line, FanDuel being sold sometime in 2018 would be a favorite.

Will DFS get a victory in a key state?

The legislative victories in the DFS industry have been nothing short of amazing. Eighteen states have now declared paid-entry fantasy sports to be a game of skill, apart from gaming laws (19 if you count Connecticut).

However, the road ahead is certainly going to get tougher. While there likely will be victories in 2018 for DFS, the industry is likely looking for quality over quantity. There are several key states where legal clarity remains important:

  • Illinois: A negative attorney general opinion for the industry still looms overhead, and efforts have stalled since 2015 to legalize DFS. Efforts in 2017 were tied to online gambling provisions, and next year the gaming package with DFS could get even bigger.
  • California: After a DFS bill passed the Assembly with just one vote against it in January of 2016, we will have gone almost two years without movement. While DFS companies operate in the largest state, they do so without legal clarity.
  • Florida: Like Illinois, DFS exists in a legal gray area, and bills have faltered in past years. A bill already advanced out of committee ahead of 2018, but the Seminole Tribe has emerged as a more vocal opponent.
  • Texas: The legislature is out of session until 2019. And DraftKings has a court date in 2018 to fight the negative attorney general opinion that DFS is illegal gambling.

Turning one of these states into a friendly environment for DFS will likely be the focus of lobbying efforts this year.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.