Inside Soccer
Inside Soccer
Episode 4 - Gaming and Gambling, Bill Squadron
Inside Soccer hosts Bill Squadron, Special Counsel at Genius Sports and Asst Professor at Elon College, a recognized expert in gaming and gambling in sport. We discuss the current landscape, technology, laws, and what the future might look like. Very interesting topic that will have an effect on soccer worldwide.
Hello and welcome back. You're listening to another incredible episode of Inside soccer when your host bill Peterson inside soccer brings you a soccer fan expert analysis and opinion on the critical issues facing the game today. also bringing guests that have incredible stories and historical perspectives on the game, with soccer experience spanning 20 Rolodexes open to bring you the voices and opinions you want. Sit back at wherever you are in the world. enjoy today's episode.
Unknown Speaker :Hello everybody. I want to welcome all the listeners from around the world and wherever you may be today and welcome all the soccer fans. This is inside soccer and this is episode four already. As always, we're here to bring you the soccer fan insights and experiences from some of the best in the world. This is Episode Four and you've already heard from Hall of Fame player cobi Jones about his journey and insights into greatness. CEO Kevin Payne about key management issues and media Guru ivis gala sorry all those episodes can be found on your favorite podcast platform or at inside top sports calm. Today we take a unique turn in our search of soccer and soccer land to one of the fastest growing issues in the sport the issue that may forever change sport. We're talking about sports, gaming and gambling the multi billion dollar industry that in one sense lays at the periphery of pro soccer, and in another sense is at the core of fandom media and the future of sport, including our favorite sport soccer. Today we're honored to have gaming expert bill Squadron with us bill is a special counsel at genius sports and also an assistant professor at Ilan College in Ilan North Carolina. He has a very unique background, which we'll touch on a little bit later. But he has put himself in the middle of this issue and is and is involved in a lot of different ways with understanding things. playing sports, gambling and gaming. And that's what we've asked him to come here and do for us today is help us the soccer fan, understand what the landscape looks like today and sports, gambling and gaming, and also where we think this all has to come from not only a participation standpoint, but a technology standpoint, and how it affects the game over the next three 510 years. So welcome bill to inside soccer.
Unknown Speaker :Thanks, Bill. Happy to join you and looking forward to talking about sports betting, which I think is going to have a dramatic impact on the sports landscape in the United States over the next five to 10 years.
Unknown Speaker :Yeah, we're ready to get started. I mean, gaming and specifically betting on sports and soccer is nothing new. It's been going on for a long time, but with some changes in the laws and the technology that's now available to the average person. It definitely has affected already the gaming and gambling industry and will continue to do so. Very, very fast pace. So, we're happy to have you here. Look, I've got as always, I've got a lot of questions and only 30 minutes so we're gonna jump right in and get rolling. For those of us who consider ourselves uninitiated, let's get one thing out of the way if you don't mind bill, what's the difference between gaming and gambling?
Unknown Speaker :Well, I think that gaming is often used to describe a variety of activities, which include even things like video gaming, but often, it encompasses gambling. So when people sometimes use the phrase gaming, they're referring to gambling and they're trying to be a little bit less direct. But, in fact, increasingly people are using them interchangeably because as betting gambling becomes more and more prevalent here in the United States, people are referring to gaming to include the uptick in gambling activity, but I in sort of bottom line, gaming will often encompass things that are not gambling like video gaming, but gambling or betting Of course, involves placing a wager on an event.
Unknown Speaker :There you go fans, we've learned something already. Okay, so look, you have a very interesting background. As I mentioned earlier, your assistant professor, your special counsel, you've worked in the media for Bloomberg, you've worked for IMG, just a myriad of people who are at the core of the development and the operation of sports. How did you find yourself in the middle of the gaming and gambling issue?
Unknown Speaker :Well, I have a background as an attorney, so I was a partner at a law firm practicing law in technology and communications for many years and then went into the government's where I was involved in regulation of communications and cable television, came out and then got into the sort of entrepreneurial world of sport Sports and technology founded a company called sport vision and was co there for a number of years where we introduced a bunch of new technologies into sports. But the whole area of technology, data analytics, and media and sports has always interested me. And I had the opportunity in 2009, to join Bloomberg to start a sports data and analytics business for Bloomberg, which we built over the years. And at that time, it seemed to me as to quite a few other people that the betting laws in the United States were likely over time to change that in 1992, Congress passed a law called passport which prohibited sports betting in any state other than Nevada really, but around the world sports betting and taken off, that in the us it was growing underground. And so at Bloomberg, we were involved in a lot of different products and services around sports data and analytics. And one of the things we developed were algorithms and models that allowed you to predict the outcomes of things like European soccer matches. And we offered those kinds of services outside the United States, of course, because at the time, it was still illegal here in America. But it it certainly occurred to me in running and building that business that sports betting was going to become more and more of a factor here in the United States. And of course, with the Supreme Court decision two years ago, it's now accelerating at warp speed.
Unknown Speaker :So gambling on soccer is a multi multi billion dollar enterprise and I imagine spikes on on yours when the World Cup is played. And a lot of that's due to technology and a lot of it's due to just you know, cultural norms and people have been betting on the game since it started. And some countries have different rules and others etc, on what's legal and what's not legal and the way you actually execute a bet on a on a game. Here in the United States, it's a little bit unique. And before we get into technology, just give our listeners on inside soccer a sense of what's different in the United States about this issue, and specifically sort of the state by state situation that we're in and where you think this goes and the speed at which it goes.
Unknown Speaker :Yeah, we do have a different environment here. And I think the sort of baseline we all need to start from, is that many people who love sports like to bet on sports. I mean, this is just a very basic principle. And it's been true. You know, I think probably since the beginning of people enjoying watching sports and around the world, as you say, in many countries where it's legal, a betting on soccer has been a major activity for many years. In fact, it's been estimated that on the last World Cup over 130 billion dollars was bet all around the world on soccer. So this is not a new phenomenon. And in fact, one of the reasons that there was a real push to have the law changed here in the United States was that even though Congress have banned sports betting here in 1992, outside of Nevada, there had been a vast and growing underground of betting with offshore bookmakers online, essentially a black market that had reached hundreds of billions of dollars here in the United States. And I think what people had concluded was that you're really not going to stop people from betting on sports. You're better Off bringing it into the sunlight, regulating it, taxing it, monitoring it, and dealing with it properly rather than pretending that it's going to go away. So two years ago, literally may 2018, the Supreme Court found that that 1992 law was unconstitutional. And that opened the door for states to make their decisions about whether to allow sports betting within their borders. And we have a long history in this country, whether it's horse racing, or lotteries, or bingo or anything like that casinos, of course, of allowing states to make their decisions about whether they want to allow different kinds of betting within each state. And that poses some challenges, of course, and a number of the sports leagues like the NFL have said that it would be more logical and rational to have a single federal law and have Congress regulate sports betting. So you've got a Single coherent system with the same rules that apply all over the country. But we have a long tradition of in this country of allowing states to make their own decisions about gambling. And I think at least at the moment, that's the direction we are going to be in for some time. And so each state has now since the Supreme Court's decision two years ago, been deciding whether or not to open their states to sports betting, and already about a third of the states have done so. And there are bills pending in many others. The challenge associated with this is that states adopt different rules, they have different views on things. To give you a very specific example some states that have legalized sports betting only allow it at a physical location, say in a casino or to racetrack, whereas others allow it on your phone, on your computer. You know, basically anywhere you are as long as you're within the state. And those that's a big difference in terms of the impact on the market. So So each state making its own rules creates challenges for the industry and for betting operators and so forth, because they have to work with each state to make sure that they're complying with their own rules. And the result of that is going to be that the growth of the markets will be a little bit uneven over the next three to five years as things begin to mature. But over time, I think you'll see the markets begin to resemble each other, and you'll have what's effectively a national market, but that will take some time.
Unknown Speaker :Well, I don't think I've asked you this before, but how is horse racing, specifically betting on horse racing operating in his country? And are there lessons there to be learned or practices to be copied? I mean, there are not tracks in every state, but I get a sense that you could probably place a bet in any state in this country. Is that true?
Unknown Speaker :Well, not every state. So most states have Legal horse racing, but not all do. So, in fact, in the state where I teach at Ilan University in North Carolina, North Carolina does not have racetracks and horse racing within the state. So while most states have approved horse racing for betting that it's not the case that all have, not all states have, for example, authorized casinos virtually all I think, maybe 49, and it could be 50 have lotteries. But, you know, every state takes its own approach. The one thing that has evolved over the past, you know, 15 to 20 years is that most states have authorized in one form or another casinos, as we talked about a minute ago. You know, almost all states have lotteries. Horse racing exists in most states. The result of that is that many states have established gaming, Commission's or gambling regulatory agencies. And that's allowed a lot of states that are beginning to move forward for sports betting to already have a structure in place, and to be able to fit the new regulatory system for sports betting into that framework. So they're not starting from scratch effectively, because they've had a regulatory body that has dealt with awarding licenses, investigating entities that are applying for licenses, making sure that the rules are protecting the public dealing with things like gambling addiction. So there is a framework in place in many states a good part of it due to horse racing casinos, lotteries, and otherwise, that allow the states not to be starting from scratch, but to fit that sports betting approach into the existing framework.
Unknown Speaker :Interesting, so let's move forward to the technology and if I'm a soccer fan, listening to this podcast on inside soccer, What I care about is how am I going to be able to bet on my favorite team or players or a combination of those? What sort of available today that you're aware of? And generally speaking, where do you think we are in the short term in the longer term
Unknown Speaker :technology will have a huge impact on this space. And the principal way in which it will play out is that the vast majority of betting that will take place over time on sports events will be on your phone. And that's already occurring outside the United States where people will literally sit in a in a soccer venue in Europe and watch the game in front of them and be betting on their phone as the game is unfolding. And that ties into another key part of what this market is going to be, which is the people historically in the United States, because this is not something that The vast majority of people are that familiar with think about betting, as, you know, a line in a football game or betting ahead of a game who's going to win a boxing match or something. But in fact, the majority of betting that takes place outside the United States and will be the case here over time is on bedding after the game starts. So in other words, as the game is going along, and the odds are changing, because someone scores a goal, or there's a red card and a player gets sent off, or the weather changes, and that may affect the thing, those odds are going to be changing as the game is going along. And people will be able to bet in real time as the game is proceeding, and they'll be able to bet on propositions. So you'll be offered an opportunity to bet on whether there will be you know, more or fewer than three corner kicks in the next 25 minutes. You know, propositions like that and all of that will take place in real life. Time on your phone. So enabled by technology enabled by a technology that allows live data to be delivered literally in milliseconds to bookmakers to betting operators who will then turn that into the odds that will be offered to, you know, a fan a better using their phone. The other sense in which technology will play a big role here in the US is because we have this state by state rule, you have to have geo fencing technology. So there are companies that work with the betting operators to make sure that if you're driving across the state line, either from a state that allows betting into one that doesn't or vice versa, it will recognize where you are, and will either authorize you to start betting if you're driving across, let's say the George Washington Bridge from New York institution into New Jersey, where New Jersey does allow mobile betting New York does not yet. And you'll then as soon as you get to the New Jersey side, assuming you have an account, be able to access that account. and place a bet. And so you know if you're a an MLS fan and you want to bet on, you know, NYC FC, you can't do it yet within the New York Region, but you can drive across the bridge. And as soon as you get to New Jersey again, assuming you have an account with a new jersey betting operator, you can place that bet and that geo fencing technology will be very important, you know, at least over the next few years until we end up with some form of Interstate compacts or something that deals with the problem of each state having their own rules.
Unknown Speaker :And Bill, what's the latest update? And, you know, I've promised the listeners of this podcast, we dive a little bit deeper into issues and maybe other people will, and there's one it's a basket of issues, but it's really the same issue. That to me seems like a tremendous challenge for for sports leagues especially, but also broadcasters and all Ultimately the gaming industry as well. And, and that's how this pile is going to be divided up. So, you know someone has to pay for those additional broadcasts somebody has to pay for the additional brought when I say additional broadcast, I mean, the the, the betting line, if you will, or the betting broadcasts that people are, are placing bets on because right now, that's not the same as what you're watching on TV. If you're in a foreign country, my understanding is, you're on a screen, but you're getting another screen, and that is showing the action so that they can eliminate the latency and there's no chance of seeing things in the stadium, more than as you said, milliseconds before someone's sitting at home. So someone has to pay for the hat right now. Someone has to pay for the app development in the phones. I'm sure there's not a league here that doesn't believe you know, they're owed some sort of rights fee and that's just their thinking about everything and the world, we put this game on, so you should pay us for it. And then you have a gambling industry that historically has never done that before, at least in this country, as far as I know. So what's happening with the carving of the pies? How I'll put it?
Unknown Speaker :Well, I think it's a very good question because a lot of this is still being sorted out. But in the in terms of the basic issues at the at the core of what you're asking. One thing that has developed over time is that there's a very sophisticated global industry around betting. It's relatively new, of course here in the US, but it has been developed, you know, over decades around the world. And so a lot of the issues that you're alluding to, are now addressed by very mature and sizable betting operators who have systems for Making sure that data is delivered reliably and very, very quickly from a venue, whether it's a tennis match, or a golf tournament or a soccer game, you know, to a facility where it's then turned around converted into odds delivered to people in real time. So that that kind of latency issue where people are able to make sure that their bets are safe and reliable, that really has been addressed by the growth development of a very sophisticated market globally. And so, you know, a lot of those issues have been resolved over the past, you know, 10 to 20 years. The issue of how, in the in the US, I'm sorry, in the United States, the league's interact with the betting operators, and that whole market grows here. A lot of those issues are being worked out. The one thing though, that everybody is cognizant of is that this will be a very Very powerful opportunity for all concerned. So engagement with a game, people watching more games people watching longer. That is an established fact. I mean, there's a ton of research that's been done that shows that when betting is permitted, people watch more games and people watch longer. And of course, you will have sponsors and advertisers much as we saw a couple years ago with daily fantasy when DraftKings and fanduel had ads all over television. This is going to be a new category for sports leagues to be able to work with and to drive revenue from new sponsors and new advertisers. They're going to have more people watching longer for their events. All of that is you know, a major increase and opportunity and revenue for them. And whether the league's actually have revenue directly from bedding that hasn't been, you know, fully decided Yet a lot of states are debating that. No state has actually agreed that the league should have a percentage of betting. But that's been the betting operators domain. There are states that have said that official data from the league's should be required for in play betting. Again, not all states have said that, but some have. So a couple of these issues are still being worked out. But I think the larger picture is what people should focus on, which is this is going to be a major boost in an entirely new revenue opportunity in category it's going to increase engagement by fans. It's gonna increase viewer audiences and longer time watching. And all of that is going to be a very big benefit economically to the sports industry.
Unknown Speaker :Yeah, I agree. It's a it is a massive wave that's coming and it's going to change things and there's going to be some growing pains as always, and some interesting developments, I'm sure but at the end of the day, and A few years from now, I imagine everyone will be sitting around with their phone, doing things. And watching the game they'll be. They'll be wagering while the game is going on. So I'm ready for the collective groan here. And this will also show just how ignorant I am to this situation. I don't normally bet on sports Actually, I don't bet on sports. But can I go online and place a bet now either across state lines or from an offshore betting company or from something in England? I mean, it doesn't seem like there's regulation on where I'm paying taxes if I purchase something. So Can somebody actually stop me from doing that? And I know you said there's geo fencing but you were talking about here in the US and something to come is it does it exist now and does it exist in foreign countries?
Unknown Speaker :So there is a big offshore betting operation that has been serving the The US market for, you know, 25 years I mean then and longer. And that's one of the reasons that people began to realize that it would be better to bring it out of the darkness into the sunlight and legalize it. Because many people were betting with offshore bookmakers that are located in the Caribbean or in Latin America or elsewhere. And they provide websites where people can bet from the United States now it's not legal. That's an that's an unlawful environment and ecosystem. And if you're betting you are taking some risk that something could get shut down or you could not be able to get your money. But it grew and flourished much like during Prohibition, you had plenty of opportunity to find alcohol, people wanted to bet and this was a unlawful wave serving that market and it hasn't disappeared. And in fact, some states that have passed their legal sports betting laws have very high tax rates. They're making it harder to make sure that, you know, everything is being driven aboveboard and to the legal markets. So these, these websites still exist. But over time, if the legal sports betting environment in the United States is done properly, everything should shift to legal people will prefer to two things legally, if they have that choice, but that market grew and that opportunity grew. Because there was a demand for it. And as we know, if there's a big demand, somebody's going to figure out a way to meet it. The people who operate legally so for example, Bill, you referenced the British betting operators, which is again a very mature, sophisticated market. If you go on their sites, you can see the bets that are offered and it shows People the vast volume of games around the world that are being offered, but you would not be able to access it from here, they would block you because they are operating legally and in a regulated way and will not take bets from jurisdictions where it's not been approved.
Unknown Speaker :Interesting. So with a bit of sarcasm, and in 10 years when the next version of COVID comes, they will not shut down sports leagues because they'll need that revenue. I had to explain to my children and why liquor stores gas stations and a lottery still operated when everything else was shut down. And how did that link to supermarkets so they got to keep us alive so we can keep spending the other money and paying taxes. So once they're generating billions of dollars from sporting events, we will continue on wire and other for sure. It's interesting so going back to soccer MLS in this country, US men's and women's national teams, all very popular women around the world for sure the men, I would say around the world as well. What challenges do you think they have, if any that are outside of what you're seeing or unique to soccer? Or maybe there aren't any? I don't know.
Unknown Speaker :Well, I think they have a tremendous opportunity. I mean, they're always challenges in any new thing. And of course, betting is not without them. But I think, really, the vast focus is going to be on the opportunity, which is to be able to move toward the sports betting markets in a in a kind of thoughtful and logical way. And that will allow people over time to be increasingly engaged with games. I mean, obviously the MLS has an enormous following us, men's, women's national teams have enormous followings, even without betting. But this will simply be another layer where people will have that opportunity. And from what I've seen from US Soccer and MLS, people I've spoken to, they are enthusiastic about the opportunity, they're looking at it thoughtfully and carefully to make sure that they're taking the right steps to protect the integrity of the sport. So to provide education about whatever risks there might be around, you know, corruption or match fixing, which we have to, you know, address. I mean, like with anything, there are always risks and those risks embedding, but there are very intensive ways of addressing it, monitoring matches, providing education and those organizing. Authorities from everything I've seen are taking all the responsible steps to deal with that. And the upside is really enormous and financial opportunity and also to give their family The chance to bet on their games and as we've said from the outset, I mean, this is something a lot of people like to do. I mean people bet on soccer all over the world. And one of the opportunities MLS particularly has is because their season runs through the summer when European soccer leagues take their break, that presents particularly a major opportunity for betting on MLS games around the world when, you know, those are going to be among the leading offerings by betting operators, particularly when European soccer is not available. So I think it's a great opportunity for MLS and for the men's and women's national teams in terms of the economic chance it's a great thing for their fans because they'll enjoy doing it. And from everything I've seen, they're taking the right steps to prepare themselves properly to take advantage of it.
Unknown Speaker :Those are very good points. You're listening to Inside soccer we've been fortunate to have bill Squadron on with us. He is the special counsel for genius sports and also an assistant professor at Ilan College in North Carolina, and finds himself in the middle of this explosion of sports, gambling and gaming. Bill, we appreciate you being here today. One final question we've asked all of our guests today is, is there any Tales from the past that you can share with us? I know, I know, you're a lawyer. And I know you're involved in some very serious stuff here. But is there anything our fans would find interesting or unique or shake their head out and just say, I can't believe that actually happened?
Unknown Speaker :Well, I you know, I have to say that I think I what people don't fully appreciate is the scale of what's to come. So I'm not sure this fits into, you know, I can't believe it did this. I mean, I guess if I were to tell you that I would say this. thing that people are most surprised about about me is that when I was growing up in New York, I used to hang out at horse racetracks all the time. So I guess I come by this gambling gene, naturally, because I really, and I still like it today, every time I have a chance to have a free afternoon, I'll go to a racetrack and I really enjoy both thoroughbred and harness racing, that people are usually surprised to hear that about me. But that's always been in my blood. But one thing I would say to people more broadly, is that this is a major tidal wave that's coming. I mean, this will be a huge impact on the sports industry, people five years from now, we'll take as naturally in the United States, you know, on their phone, on their laptop or on their tablet while they're watching a game, you know, casually betting 510 2050 hundred dollars on the outcome or on a particular proposition. Will Steph Curry score more or less than 10 points in the last six minutes of the third quarter? And that's what's coming. We only need to look at neutral In Pennsylvania, that before Coronavirus, shut everything down had between the two of them roughly a billion dollars in money bet. Both those states have authorized mobile betting and the markets were really beginning to take off even, you know, in these early stages. So this is going to be a major part of the US sports ecosystem going forward. And if it's handled properly and responsibly as you know, my senses, everyone is really doing that. I think it can be a great boost and a real opportunity for fans who have shown over the decades if not centuries, they like to bet on sports.
Unknown Speaker :Excellent bill, great way to wrap it up. We really appreciate you coming on. I think the fans and listeners of inside soccer have just experienced something that they won't find anywhere else and we'll leave here with a much better understanding of knowledge. Only the landscape today but where we're headed in the future and the opportunities. And if that's their, that's their cup of tea as they say, then they're going to be ahead of the game a little bit and know what to expect. So we appreciate your time and taking it out for us and our people. And hopefully we'll get you back on in a future and get some updates as this as this issue continues to grow and expand. So thank you very much and enjoy your day.
Unknown Speaker :Thanks, Bill. Happy to join