New Hampshire legislators are poised to approve legal sports betting this year, creating an interesting conundrum for sports fans.
New England’s four main professional teams — the New England Patriots, Boston Red Sox, Boston Bruins and Boston Celtics — have won a combined 12 championships since 2001 and racked up impressive winning records and deep playoff runs in many of the seasons in which they didn’t win it all. But that success bodes ill for sports betting revenue.
As recent figures out of Rhode Island’s casinos indicate, the better a hometown team does, the less money local bookies, and therefore states, take in.
Gamblers in Rhode Island placed $20.7 million in wagers in February, much of it on the Patriots to win Super Bowl LIII. By the end of the month, after Tom Brady and Co. came out victorious, the state’s two casinos had to pay out $21.6 million.
Under Rhode Island’s new sports betting law, the state gets 51 percent of the revenues — when there are some.
“Most people in our market were betting for the Patriots,” said Paul Grimaldi, a spokesman for the Rhode Island Department of Revenue. “Your winning technically hurts your state. If you’re a Rhode Islander and you’re making a big bet (on the Patriots) that pays off, you’ve won and you’ve hurt all your neighbors.”
Rhode Island’s betting revenue for March is up, thanks to the NCAA basketball tournaments, but experts say the New England region has to be cognizant that its teams’ successes will likely lead to volatility.
A bill that would legalize sports betting in New Hampshire, both at physical bookmakers and online, passed the New Hampshire House 269-82 last month and is considered likely to pass the Senate. HB 480 would generate between $1.5 million and $7.5 million in its first full fiscal year of operation, according to a state analysis.
Gov. Chris Sununu’s proposed budget for the upcoming biennium includes $10 million in revenue from sports betting.
“If you want to approve gambling, that’s fine. You can get some revenue and maybe it will help you pay for a program you didn’t have, but this cannot be what you’re thinking about when you’re thinking about your state’s budget because it’s so small,” said Richard Auxier, a researcher at the Urban Institute who studies gambling and tax policy.
He said the recent figures from Rhode Island show how little money may actually come into states and also suggest that bookmakers in New England must learn to strike a careful balance between setting odds on local teams that will turn a profit but not be so outside the mainstream that gamblers travel to other states.
“This is one of the issues that legal sports betting has. Any time a New England team goes deep in the playoffs, your state revenue can get hit pretty badly,” said David Schwartz, an associate vice provost at the University of Nevada Las Vegas who previously served as the director of the school’s Center for Gaming Research.
“Going back a long way, this is why they have something called layoff betting, where if you’re a bookie and you get a lot of action on one team you would call a bookie in another state and make a bet to offset that,” he said, adding that the practice is generally illegal and therefore not an option for licensed bookmakers.
Companies that operate in multiple states, like William Hill, which runs Rhode Island’s books, are more immune to the volatility of one region’s success or failure, Schwartz said.
For state gambling regulators and money-counters, though, the only hope may be rooting for very specific outcomes.
In Rhode Island’s casinos, the spread for the Super Bowl had the Patriots favored by 2½ points, according to Grimaldi.
“The senior team here, including the lottery director, were rooting for the Patriots to win by two,” he said.