News & Opinion

It’s a lock: Gambling will lift fan interest

Few sports lend themselves so perfectly to gambling as does golf.

Which is why when people complain about the speed of play in golf, they may not be so incensed in a couple of years, when in-play gambling will be part of the game's fabric.

That timeline might be optimistic, because only eight states – Delaware, Mississippi, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island and West Virginia – have legalized sports betting.

In January, those states, excluding New Mexico, which had not started its sports betting, generated $998.8 million, with Nevada leading at $497.5 million, according to the American Gaming Association.

Some of that gambling money could benefit the PGA Tour, which commissioner Jay Monahan has positioned to welcome wagering. The Tour could use a slice of the anticipated gambling pie to increase its tournament purses and entice the world’s best golfers to focus even more on the U.S. tour.

Somebody has to pay for purses that continue to skyrocket.

The Players Championship poses a great example. The purse for this month’s event totaled $12.5 million, with winner Rory McIlroy receiving $2.25 million. Last year, the Players’ purse was $11 million, up sharply from $6 million in 2000. The annual increase this century is $342,000.

With 23 additional states passing sports-gambling legislation, the mood of the country has swung toward wagering, but many things need to happen before you can sit in your lounge chair and bet on every golf shot.

Foremost: mobile gambling. If a state does not pass sports-gambling legislation that allows for mobile betting, a gambler would have to visit a registered facility to place a bet. That would limit access to sports betting and would not allow the golf gambler the ability to wager remotely in real time.

Next, the PGA Tour would have to sign off on allowing for the treasure trove of data generated from its ShotLink platform to be readily available to all bettors.

This could happen in a number of ways.

1. The Tour could create its own betting site and provide live and archived data to golf bettors. The site could be offered free or for a fee. The Tour would have to enter the betting business, which it likely would not do, and instead recruit a partner that already has built a gambling infrastructure.

2. The Tour could license its ShotLink data to any facility in the U.S. that allows for sports betting.

In either scenario, the Tour would have control over the data and ultimately get a piece of the action, pursuant to each state’s gaming laws.

In a recent interview with Alex Kaplan, the president and general manager of Discovery Golf, an aspect of the company’s recent deal with the Tour became clear: Discovery will create a gambling platform on GolfTV over-the-top.

While limited, GolfTV is only for international consumption of PGA Tour coverage, and the rollout across all countries will be piecemeal as current PGA Tour agreements expire.

But with a deal that runs for 12 years, Discovery is focused on trying to find ways to recoup its rights fees, and gambling likely will be one of those ways.

“It's not just betting. It's also gamification,” Kaplan said. “Obviously, those two can come together, and there's shades of gray there, but to me there is a slight difference. It's not just for the gambler who wants to put a lot of money on who is going to win the tournament or what score they're going to shoot. It's making it fun and engaging to watch within the broadcast. I think some of that can be more in games than it is in traditional betting.”

The PGA Tour has installed the technology to eliminate any latency issues with ShotLink’s data flow. For example, updated data on the percentage of putts made from a certain distance are almost instantaneous.

The latency issue is still a work in progress for Discovery coverage. With so much money involved, not only via in-play gambling but driving interest in the broadcast in what Kaplan called gamification, Discovery has a lot of incentive to find the answer.

In the meantime, each state needs to play its part.

Only nine states have not moved toward passing gambling legislation for 2019. Three of them – Hawaii, Kentucky and South Dakota – killed bills that would have permitted sports gambling.

With the eight states that already allow sports betting – Arkansas, Oregon and the District of Columbia have passed bills that are not yet operational – that leaves 24 states with active sports-betting bills in their legislatures.

By the end of this year, 35 states and D.C. could have legalized sports gambling, opening the way for money to flow to all sports.

But how much money?

In February, New Jersey reported gross gaming revenue of $241.2 million, from which gaming wins totaled $196.7 million. The state received $20.5 million in taxes, leaving $24 million for the gambling facilities, or only 10 percent of the revenue.

During that same time period, sports wagering totaled $12.7 million. Using the same formula, the amount of money falling to the bottom line would be approximately $1.3 million, to be split among the participating leagues and the betting houses.

Of course, this is only one state, but New Jersey is highly sophisticated in its gambling operations, permitting mobile betting among a large population.

Other states, with smaller populations and with limited or no mobile betting, will produce less revenue.

Either way, sports gambling clearly will be an incremental revenue source in the short term and could mature to something more significant in the future, but the true benefit of wagering in golf likely will be fan engagement and retention.

Alex Miceli is the founder and publisher of Morning Read. Email: alex@morningread.com; Twitter: @AlexMiceli