The first time I bet at a Las Vegas sportsbook was in 1983, when I bet on the Miami Dolphins as the favorites to win Super Bowl XVII. Washington won handily, 27-17. Having just moved to Las Vegas from Southern California after college, the little sportsbook, then the Bingo Palace, offered a unique Nevada experience.
That uniqueness is gone forever. Legal sports betting is on its way to over 40 states. This week on Indy Gaming, we take a look at how Nevada sportsbooks are adapting to the changing landscape.
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A sports fan sitting in a Phoenix-area restaurant can simply download one of 12 sports betting apps approved by Arizona gambling regulators, enter their customer data and credit card information and immediately start placing bets on college and professional sports.
Sports fans in Las Vegas can go through a similar process, but with one additional step: Customers must complete sign-up at a licensed sportsbook associated with the app.
Analysts said the lack of technology, known as remote registration, has negatively impacted Nevada’s sports betting industry and is one of the reasons the state, once a leader in sports betting, has fallen to 10th place in annual revenue, behind more populous states that have legalized sports betting since 2018.
Gaming Control Board regulations require customers to sign up for mobile sports betting accounts directly at casinos, leaving some popular operators on the sidelines, including DraftKings, FanDuel and the recently launched ESPN BET, which are not affiliated with Nevada casinos.
Nearly every state allows online registration, even those without casinos.
“I live in Maryland, but I’m in New York about once every two weeks,” Chad Beynon, a gaming analyst at Macquarie Securities, said in an interview last week. “I take the train to New York and I go through New Jersey. When I open the BetMGM, DraftKings or FanDuel app, it automatically gets my location. [into that state’s app].”
Nevada’s sports betting industry recorded record revenue in 2023, raking in more than $481.4 million. But nationally, Nevada’s total was only the 10th largest among the 37 states and Washington, D.C., that offered legal sports betting last year.
According to a report released last week by the American Gaming Association (AGA), New York, New Jersey and Illinois are each set to surpass $1 billion in sports betting revenue in 2023. Neighboring Arizona, which has yet to release its December sports betting totals, surpassed Nevada with $492.4 million in just 11 months.
Analysts and Nevada sportsbook operators said the state’s small population was the main reason it dropped from No. 7 in 2022.
“I think that’s absolutely true,” Beynon said.The top nine states for sports betting all have populations between 20 million and 7 million, according to the U.S. Census Bureau, more than Nevada’s roughly 3.2 million.
A 2018 U.S. Supreme Court ruling allowing states to legalize and regulate sports betting ended Nevada’s status as the only state where sports betting was legal.
Sports betting is considered an incidental gambling activity in Nevada unless there are major sporting events taking place, such as the opening weekend of the NCAA basketball tournament or the Super Bowl, which drew a record $185.6 million in wagers two weeks ago.
Jay Kornegay, who has overseen the Westgate Las Vegas Superbook since 2004 and previously operated three other sportsbooks on the Strip, said the in-person registration requirement was never an issue when Nevada “had a monopoly on the sports betting industry.”
The SuperBook operates online sports betting in eight states that do not require in-person sign-up.
“It’s been a very smooth operation for the last three years,” Kornegay said, adding that Nevada’s national ranking will continue to be determined by population, though he believes adding technology available in other states “will help us grow that population.”
The FanDuel Sportsbook inside the Fremont Hotel Casino is operated by Boyd Gaming. This location was photographed on Jan. 12, 2023. (Jeff Scheid/The Nevada Independent)
Two of the largest U.S. sports betting operators, DraftKings and FanDuel, do not operate in Nevada because of in-person registration requirements. Boyd Gaming owns 5% of FanDuel and has rebranded its sportsbook inside the Fremont Hotel Casino as FanDuel, but Boyd continues to operate the business.
Nevada will “significantly increase” the size of its sports betting market by eliminating in-person registration, Eilers & Krasik Gaming analyst Chris Krafcik said in an email.
“Operators like FanDuel, DraftKings and ESPN Bet will have a positive impact on the market rather than a dent in it,” he wrote.
The situation in Nevada could change if sports betting is legalized in California, Texas and Florida, the three most populous states in the country.
Nevada sportsbooks accepted $8.3 billion in wagers in 2023, a 5.1 percent decrease from the record $8.7 billion in 2022. Nationwide, sportsbooks accepted more than $119.8 billion in wagers in 2023, an increase of about 28 percent, mainly due to five more states having sports betting than in 2022.
Despite the lack of remote registration, nearly 66% of all sports bets placed in Nevada in 2023 were placed on mobile devices, according to the control board.
The expansion of legal sports betting is part of the AGA’s efforts to eliminate illegal and unregulated sportsbooks that are based outside the United States but target American customers.
“There’s no doubt that we were able to transition [to legal sports books] “This will provide a new option for tens of millions of Americans whose only sports betting option was the illegal market,” AGA CEO Bill Miller said during an online press conference last week.
The AGA declined to comment on Nevada’s lack of remote registration for sports betting.
Red Rock Resorts, the local casino giant that operates STN sports betting, has long opposed remote registration, with company executives pointing out that it has invested millions of dollars in its sportsbook operations, including its newest facility at the $780 million Durango Casino Resort.
Even FanDuel’s partner, Boyd Gaming, doesn’t want the regulations changed.
There have been some moves toward loosening in-person registration restrictions over the past few years, most notably comments made by MGM Resorts International CEO Bill Hornbuckle in 2021. But that same year, a group of smaller gaming operators in Nevada proposed that the Governor’s Gaming Policy Commission and state lawmakers approve regulatory changes.
Nevada casinos recorded a record $15.5 billion in gambling revenue in 2023, but sports betting accounted for just 3% of the total.
Kornegay said he was surprised that during Super Bowl 55, Superbook customers from other states were unable to sign up on Nevada’s app from their hotel rooms and had to come to the sportsbook.
But Cornegay said he knows betting companies that have invested heavily in the largest sportsbook operations are not in favor of the change. Though the Westgate is considered a Strip resort with a 3,000-room hotel, 70% of the Superbook’s sales come from local customers.
“I think if I worked for a different company I might have said the same thing,” Kornegay said.
The Formula 1 Las Vegas Grand Prix passes through the Paris Las Vegas Casino Resort operated by Caesars Entertainment on Nov. 17, 2023. (Jeff Scheid/Nevada Independent)
News, Notes, Quotes
Caesars CEO calls F1 ‘phenomenal event for the market’
Caesars Entertainment CEO Tom Reeg said revenue from the inaugural Formula One Las Vegas Grand Prix benefited only two of his company’s Strip resorts, Caesars Palace and Paris Las Vegas, because they cater to a high-end clientele and are located along a key section of the track.
“That hasn’t been the case in mass-market properties,” Reeg said during Caesars’ fourth-quarter earnings conference call on Feb. 15. “It’s been phenomenal for the market, generally speaking. I think it’s going to be a better event if it activates more areas of the city, not just four or five cities.” [resorts] That’s where we got the majority of the profits.”
League suggested lowering ticket prices — some of which can cost as much as $10,000 — to more “affordable” prices to attract a more diverse audience.
“This will also be helpful for facilities that haven’t been able to participate as much in the past. [in 2023],” He said.
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VICI CEO says A’s Stadium is part of ‘sports triangle’
Edward Pitoniak, CEO of real estate investment trust VICI Properties, sees his company’s potential in what analysts call the “Sports Triangle” — the land surrounding Allegiant Stadium, T-Mobile Arena and the Major League Baseball stadium where the Oakland Athletics will move to replace the Tropicana Las Vegas.
“Everything in that triangle is owned by us. MGM [Resorts International] “We operate everything within that triangle,” Pitoniak said on a conference call last week about VICI’s fourth-quarter earnings. MGM leases operations of its Strip resorts from VICI.
“Las Vegas has reached a global tipping point that no place on Earth right now can match, not even Orlando or Macau,” he said. “Las Vegas is in a category all its own.”
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Head: Las Vegas is not an option for Penn Entertainment
Penn Entertainment CEO Jay Snowden was asked during a quarterly conference call with analysts whether the company was still interested in operating a casino on the Strip. Penn has more than 40 casinos in 20 states, operates the M Resort in Henderson and two smaller casinos at Jackpot and formerly operated the Tropicana Las Vegas.
“Opportunities are very limited and there’s nothing particularly noteworthy at this point,” Snowden said.
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Gaming tech pioneer John English dies at age 60
Gaming technology developer John English died last week at the age of 60. English, who was working on reviving the Bet LeRoy sports betting brand, was managing director of sports betting and technology at Global Market Advisors (GMA).
“He never stopped short of finding a way to bring someone’s vision to life, and his passion cemented the storied traditions of our industry,” GMA executives said in a statement.
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So does that mean there’s still a chance?
“There has been skepticism about the financing of the Athletics’ stadium, [and] Once the Tropicana is built, unless Bally is confident in moving forward with the project, demolition of the Tropicana will not occur.”
— Truist Securities gaming analyst Barry Jonas said in a research note following Bally’s fourth-quarter earnings call.
