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Genius | Betting legalisation promises a new era for US sports

SCOTTSDALE, AZ - FEBRUARY 05: A group a caddies and golfers wait behind the ninth hole during the second round of the Waste Management Phoenix Open at TPC Scottsdale on February 5, 2016 in Scottsdale, Arizona. (Photo by Scott Halleran/Getty Images)

The potential of US sports betting will only be maximised if rights-holders focus on maintaining integrity, argues Genius Sports’ Ben Paterson.

Ben Paterson (Genius)

New US legislation which allows states to legalise sports betting is set to open the floodgates to new revenue for clubs and leagues but, according to Ben Paterson, integrity operations director at Genius Sports, this potential will only be maximised by following the path blazed by the Premier League and other sports bodies worldwide to capitalise on the use of official data and focus on maintaining integrity.

“We see the recent overturn on the federal ban on sports betting in the United States as one of the most important developments in world sport in years. New legislation is being drafted state-by-state and that means it will take time to spread across the country, but the fact is that these are exciting times and there will be huge opportunities for sports in terms of revenue, fan engagement and safeguarding the integrity of competitions,” he said.

“All parties are currently asking, ‘what’s in it for us’ and its certain that over time, leagues and teams could benefit hugely.”

But, says Paterson, the key to building firm foundations for a responsible and sustainable US sports betting sector is to “engage with, monetise and utilise official data.”

“Each state is in a unique position to create leading frameworks for regulated sports betting. There is a massive opportunity here to require the use of official data amongst all licensed betting operators because it is central to protecting consumers and competitions while helping to eradicate the black market.”

Official data has helped create the in-play betting market which has driven huge growth in the sector in recent years. The alignment of real-time, official data with near universal access to digital connectivity has transformed an activity which – in those territories where it was legal – often had a negative image.

Today sports betting – particularly live, in-play betting – has become an accepted recreational social activity.

“In-play has transformed the sports betting industry by attracting new customers that are drawn to the new rapid-fire, engaging betting markets. These markets are powered by official data which is fundamental to some of the world’s largest betting operators including William Hill, Betfair and Paddy Power,” said Paterson.

“This type of betting hasn’t been experienced in the US yet, but we fully expect the country to follow the UK’s lead with official data helping to power this in-game sports betting revolution.”

The anticipated legalisation of sports betting in the US brings risks as well and underscores the necessity for rigorous integrity provisions across sport and the entire betting sector.

While there are no exact figures on the size of the betting black market, the fact is that Americans continue to take risks with their money, risk committing offences and feed the roots of corruption in sport by betting illegally with unlicensed offshore sites.

“Sports betting already exists in the US. However, prohibition has driven this market underground where customers have been betting with offshore operators who provide no tax benefit to the states and threaten to compromise the integrity of sports through a complete lack of visibility of their customers betting patterns,” Paterson explained.

“In the UK, experience has shown us that effective legislation can help eradicate illegal markets. This must be a key priority for every state legislator and can be achieved by including measures to ensure licensed operators have access to official data. This will help to ensure the creation of the most engaging in-play products with thousands of different markets, providing a huge competitive advantage over offshore or illegal bookmakers.”

If the move to legalised sports betting is well thought through, the result will help to protect the integrity of sport.

The threat of match-fixing, whether it involves altering the ultimate outcome of a game or individual points or events within a contest, is exacerbated when there is little or no oversight of the bets being placed, as is the case with unlicensed bookmakers.

But legalisation, and applying strict rules to all licensees helps to create a new transparent market that shifts public perception away from its murky view of sports betting in the past.

“There is a common misconception that legalising betting, and thus increasing the levels of wagering, can threaten the integrity of sports. In reality though, the opposite is true as regulation affords transparency, cooperation and the sharing of information which are all vital components to combatting match-fixing”.

“This is a great opportunity to enhance the integrity of US sports by establishing a robust framework with clear rules and regulations from the outset,” said Paterson.

This is a world that Paterson and his colleagues know well. Over the years Genius Sports has developed and delivered integrity services for sports bodies, embracing every element of the process from ensuring that bodies have the ruled and regulations they need to combat betting-related corruption through monitoring of betting patterns to identify suspicious activity, through the education of players, coaches and officials to proving specialist integrity officials and, where a case is brought, providing expert testimony.

An example of its approach is the company’s work with the PGA TOUR which launched its new Integrity Program in January, designed to “maintain integrity and prevent and mitigate betting-related corruption in its competitions.”

Genius Sports’ bet monitoring system provides the TOUR with 24/7 protection. It compares real-time odds movements from betting markets worldwide with predictive algorithms to clearly highlight any potentially suspicious activity.

Genius Sports has also delivered a customised e-learning service which the PGA TOUR has made mandatory for all players, caddies and officials. It enables the TOUR to clearly demonstrate the rules, expectations and consequences associated with betting-related corruption for stakeholders around the world.

“For sports, the combination of clear regulations, monitoring, education and effective sanctions is critical to maintaining the transparency of their competitions,” Ben Paterson said.

“But as we have seen in other mature betting markets, specific legislation can also provide vital protection to the integrity of sports. In the UK, there are a number of specific provisions in an operator’s licensing criteria that helps safeguard sporting competitions. This includes reporting suspicious activity to the Gambling Commission and conducting strict Know Your Customer measures to build accurate profiles on their customers.”

“The major US sports leagues are already taking proactive integrity measures. But going forward, the recent legalisation of betting may require them to increase their efforts around education. More than ever, leagues and teams will have to reinforce to their players vital information such as what constitutes as insider information, the rules against betting on their or other sports’ competitions and what the potential consequences can be”.

“The PGA Tour are leading the field in this regard and I expect to see other sports ramping up their educational efforts going forward.”

According to Paterson, the huge opportunities which US sport now embraces as a result of the new legislation need strong, enforceable regulation to ensure that they are not diluted.

“There is no guarantee that current US customers will migrate from their offshore bookies to fully licensed operators. However, regulators and lawmakers need to capitalise on this unique opportunity to create a sustainable regulatory framework that has integrity at its heart and encourages the licensed betting operator to thrive”.

“That is why we see official data as the driving force that can usher in a new era for sport in the US.”

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