• Joseph DiDonato

Legalized sports betting leaves small businesses and e-sports out in the cold

Legalization of Sports Betting laws in New Jersey leaves small businesses out of potential income opportunities from gaming directed to millennials.

On June 11, 2018, Governor Philip D. Murphy of New Jersey signed a Assembly Bill 4111 that legalizes sports wagering ensuring legalized gambling in casinos in Atlantic City and New Jersey racetracks to attract new business and new fans, boosting their long-term financial prospects and strengthening the economy of many related businesses.

A growing concern regarding the new legislation - and the speed with which it was adopted after the Supreme Court decision - illustrates a lack of understanding of “new” gaming, e.g., e-sports. The bill allows wagering at casinos and racetracks on certain professional and collegiate sports or athletic events but bans betting on high school sports events, electronic sports, and competitive videogames as "prohibited sports events". The prohibition exempts "international sports events in which persons under age 18 make up a minority of the participants”. However, the specifics of "international" aren't defined and the exemption only refers to "sports events," leaving open the possibility that e-sports and professional gaming events are prohibited. Uncertain wording aside, the bill illustrates the concern that game-related gambling regulation should be consistent. Different rules in different states governing the international e-sports scene are not likely to result in a consistent and well-regulated framework for gambling.

Regulations allowing sports betting in New Jersey and other states around the country based on the recent U.S. Supreme Court ruling will boost local economies and tax revenue, benefiting many businesses and citizens. However, legislation must recognize the potential opportunities for small businesses regarding tangential products for the “gaming business” at both racetracks and casinos. Restrictions on e-sports or other professional gaming will prohibit smaller businesses from benefiting from potential opportunities. Smaller businesses cannot establish casinos or racetracks and therefore can only share in the gaming business by developing products (in many forms including software) that complement improve, and sometimes, are the core of the games. Therefore, small businesses need to rely on intellectual property in the form of patents, trademarks, know how, trade secrets and copyrights to become players in the gaming industry without being exploited by larger businesses which have greater financially resources. It is hoped that smaller businesses by relying on their intellectual property can partner with larger businesses that own and manage casinos or racetracks so that all can share in the financial opportunities that exist with sports betting.

Photo licensed under CC BY-SA 3.0 by Mikerussell

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