Get ready for legalized sports betting.
The Supreme Court on Monday ruled that a federal ban enacted in 1992 on sports betting is unconstitutional, creating a flurry of business opportunity for companies across the sports landscape and giving fans a new regulated way to wager on games.
The ruling, which overturns the Professional and Amateur Sports Protection Act (PAPSA), allows states to legalize sports betting. Until now, Nevada was the only state where one could bet on the results of an individual sporting event.
“Today’s ruling makes it possible for states and sovereign tribal nations to give Americans what they want: an open, transparent, and responsible market for sports betting,” American Gaming Association (AGA) President and CEO Geoff Freeman said in a statement. “Through smart, efficient regulation this new market will protect consumers, preserve the integrity of the games we love, empower law enforcement to fight illegal gambling, and generate new revenue for states, sporting bodies, broadcasters and many others.”
New Jersey is expected to be the first state to enact new legalized sports betting laws, with others to soon follow. We’ve reached out to the Washington State Gambling Commission for details about the state’s plan for legal sports betting and will update this story when we hear back.
Continuing to outlaw sports gambling would be the height of stupidity in our state. The tax revenue stream alone would be worth billions. You can buy a cookie full of weed but you can’t bet $20 on the Seahawks to beat the Bears?
— Dave Softy Mahler (@Softykjr) May 14, 2018
Startups and entrepreneurs have been anticipating the decision. The opportunity is massive; Americans place $150 billion on illegal sports bets, Bloomberg reported.
“It’s one of the biggest decisions we have been waiting for,” said Rahul Sood, CEO of Seattle-based esports betting startup Unikrn. “In the future, people across the U.S. will be able to bet on esports online using the Unikrn platform.”
It’s a boon for DraftKings and FanDuel, the venture-backed daily fantasy sports platforms. DraftKings, which has nearly 10 million users, plans to offer a sports betting product later this year.
“Our mission has always been to bring fans closer to the sports they love and now, thanks to the wisdom of the Supreme Court, DraftKings will be able to harness our proven technology to provide our customers with innovative online sports betting products,” DraftKings CEO Jason Robins said in a statement. “This ruling gives us the ability to further diversify our product offerings and build on our unique capacity to drive fan engagement.”
DraftKings FanDuel became infinitely more valuable in the last 30 minutes. With the database of gamblers and tech they built with daily fantasy over the last three years, they have a chance to be a winner here. That’s what investors still in those companies had bet on.
— Darren Rovell (@darrenrovell) May 14, 2018
There may also be implications for sports media companies. NiemanLab noted today that “an awful lot of sports reporting is about to move from entertainment information — stuff you read because you enjoy it — to production information — stuff you read because you think it’ll help you make money.”
ESPN reported that most states plan to eventually offer online and/or mobile wagering; each will create their own rules and regulations around sports betting.
“In the aftermath of this landmark decision, and considering the many ways this seismic shift will impact the landscape, it is critical to create a framework that enables U.S. sports fans to engage in the sports and competitions they follow and love, through a safe and secure wagering infrastructure that balances the priorities and needs of all stakeholders,” Carsten Koerl, CEO of sports data giant Sportradar, said in a statement.
Though the NBA and MLB supported legal sports betting, Fortune called today’s decision “a setback for professional sports leagues.” It remains to be seen how leagues will demand certain fees for bets placed on their games and create regulations around data rights.
“It’ll finally be fun to go to a baseball game again.” https://t.co/D3va3jeayi
— Carl Quintanilla (@carlquintanilla) May 14, 2018
Data and analytics will also be a key focus in this new age of sports betting.
I am too. I’m just amazed how foolish people are to suggest that all the advanced analytics means people will win. It’s HARD to win
— Scott Van Pelt (@notthefakeSVP) May 14, 2018