Editor’s note: This commentary is by Steve May, who is a licensed clinical social worker with 15 years providing clinical services to addicts, alcoholics and their families. May has worked in a variety of settings across Vermont spanning agencies and private practice. He is a Democratic candidate for the state Senate in the Chittenden District.
[M]y father was a problem gambler. Over the course of his life and to the detriment of his family, he lost significant money and wagered well in excess of $1 million. I saw this powerful addiction unfold at home over and over. This is the reason I pursued a profession as a clinical social worker. He is the reason I specialize in addiction medicine. I have a breadth of knowledge when it comes to the business of gambling. My nuclear family, including myself and my mother, were steeped in the industry. My mother was employed as an administrative assistant at Foxwoods, a casino in Connecticut, for more than a decade. I also worked at Foxwoods in their phone center walking past throngs of bettors wagering at all hours of the day and night. I worked myself through graduate school at while attending the University of Rhode Island. I remained steadfast and focused with my eyes planted squarely on my set goals.
The U.S. Supreme Court decision to permit state authorized sports betting in recent days will inevitably bring sports wagering to Vermont. Will Vermont be prepared for the challenges and opportunities implied? It’s not like sports betting isn’t already happening in Vermont. It’s happening. Four states have some form of sports wagering in place today. Another five including Connecticut, New Jersey and New York all voted to put betting on their books just in case it ever became legal again. These states have made proactive plans and are definitively making some sort of revenue-accruing plan.
What has changed in the 26 years spanning 1992-2018? In 1992, the expansion of sports betting was halted by Congress and the Supreme Court. Business interests fueled by heavy-hitting television networks rooted in the income professional sports supplied eventually became tapped out. Nowadays, individual teams and their owners, through their respective leagues, their players and their unions have come to see revenue from wagering as part of the next frontier in sports revenues. These powerful business interests see the writing on the wall. Vermont should capitalize on these opportunities to access revenue from a resource clearly already in play.
In 2018, sports wagering is what personal seat licenses in arenas and stadiums were a generation ago. In 2018, sports wagering offers opportunities that cable TV offered the sports industry was a decade ago. It is just another expression of the business of the sports entertainment industry maximizing its return on investment.
Let’s discuss the New England Patriots. Their ownership group is a minority owner in daily fantasy sports platforms like: Fanduel.com and DraftKings.com. The four major sports leagues already are in talks about real-time sports betting, using a cellphone to amplify the event for the viewing public. NBA commissioner, Adam Silver, for example, in his 2017 State of the League address, was wistful in discussing potential partnerships with virtual betting parlors to amplify the fan experience. When pressed by reporters, he said he was doing exploration in real time with gaming companies and that basketball would benefit from working with properties that had legal wagering products that they might eventually deploy. These opportunities are ripe.
Conservative estimates from the National Gaming Association state that $150 billion was wagered on sports as part of the underground economy in 2017. By comparison, legal sports books in Nevada took bets equally $5 billion for the 2017 calendar year. Stated differently, more than 95 percent of all sports wagering in 2017 took place illegally as part of the underground economy.
A fraction of those involved Vermont residents and online estimate do vary greatly. Vermonters will wager on sports. This should be no revelation to anyone. Some of those very same Vermonters who bet will be the ones who will wager well in excess of what they can afford to lose. That reality will not affect their patterns of wagering.
Those losses will have some social cost to the state and its citizens. We must be prepared. If Vermont were to wager in proportion to its population and Vermont represents 1/435 of the country, 1/435 of the National Gaming Association number should be equivalent to: roughly $345 million a year. This back-of-the-envelope math is crude but demonstrates the point. Vermonters bet and do so in significant numbers.
Before the court case was settled earlier in May, Vermonters were betting every day and did so while putting themselves at some legal risk. The legal risk was significant, similar to the environment that confronted cannabis users. Shell companies in third countries were facilitating illegal activity. Sometimes these same actors were involved in other illegal activity and gaming was part of the process of making dirty money clean. Meanwhile, Vermonters were sometimes involved in complex financial relationships to move monies to a place where there wagering activity was permitted by law in a third country. Capital flight meant that monies came and left Vermont, but the consequences of the bad behavior are all localized. The average bettors’ losses and the social impact implied continue to reverberate across Vermont.
Daily fantasy sports and sports wagering games exist today, but they are about to become even more popular and commonplace. Neighboring states are moving first, well in advance of us. Nobody should think that the tide of monies available through wagering will end there. The amount of revenue available to states will become too much to pass up. Vermont should have a plan to address their proliferation and its consequences. When the Legislature returns, they should task the lottery commission with studying the effects of this court decision and its impacts ahead of the 2019-2020 legislative session. It’s imperative that we have a plan because everyone else will be doing a whole lot more than planning starting January 2019. Legislative processes take time. Will we make the choices necessary and take advantage of the opportunities laid out before us?
As a matter of both sound public policy and personal and professional understanding, let me be the first to caution that this tide is coming. When it eventually reaches here, Vermont, it will be awesome in size and scope. Failure to act now and in these coming months responsibly will have consequences and reverberations. We have choices. Vermont will either be thrust into the role of attempting to simply hold back the wave or getting swamped by currents we are powerless to impact. It will be not unlike a flood. The choice is exclusively ours.
