March 14, 2019

Indiana state senator Jon Ford explains why an official data mandate for in-play wagering was a necessary component of the state’s sports betting bill.

Interview with Indiana state senator Jon Ford

Indiana state senator Jon Ford explains why an official data mandate for in-play wagering was a necessary component of the state’s sports betting bill.

Having passed in the Indiana State Senate on 27 February, Senate Bill 552 received its first reading in the state’s house of representatives on 5 March.

The bill, as it stands, would enable casinos and racetracks to offer land-based and mobile sports betting, with a condition that official league data is used to settle any in-play wagers.

It’s the first sports betting bill to include official data as an explicit condition of gambling operations, which co-sponsor of the bill Senator Jon Ford says is necessary to retain the integrity of bets placed in-play.

Speaking to ICE North America last week, Ford was candid about his position. “I’ve not always been a fan of using official league data”, he said. “But after really doing research, I came up with this middle ground where in-play wagering requires official data because I do think integrity is a major issue there”.

He admits that the prominence of the state’s IndyCar racing teams was also a factor. The Indianapolis Motor Speedway has welcomed the move, alongside the state’s NFL team, Indianapolis Colts.

“They make a good argument that they own their data and their data is coming in very quickly, showing where cars are on the racetrack and the speed”, he says.

Similarly with football, the senator says: “If the data is not league official and someone loses a bet because the data source says it was two yards but the official leagues figures say its three yards, people will be losing money over that so, for us, it’s an integrity thing and league data is what we’re going to use to determine those bets”.

In practice, this gives official data providers, whether they be direct from the leagues or via a third-party such as SportsRadar or BetGenius an integral position in the state’s sports wagering supply chain.

Originally an angle pushed by the leagues in the run up to PASPA’s repeal, the introduction of an official data mandate on sports betting has proved controversial.

Most casinos and operators see it as an unnecessary barrier to entry and claim the additional cost implications will increase the difficulty of competing with the offshore books who operate without such stipulations.

However, Ford is unfazed by this. He says the limited scope of the use of official data within his bill makes it booth easy to comply with and purposeful condition.

“At the end of the day I think that most casinos are going to end up using official data anyway”, he explains. “This won’t create any kind of monopoly, it’s just for in-play, not for sports books”.

The legislation, if it passes through the House in its current form, will offer three types of license; one for operators, one for vendors (third-party operator); and sports wagering service providers, such as data providers.

Ford says he has received very little push back from representatives over the inclusion of the data mandate, although some US news outlets have reported that sources anticipate scrutiny in the next stage. 

Coming to the process later than nearby states, such as West Virginia and Pennsylvania, helped to shape the content of the bill according to Ford.

As did the legislation of those further afield. “It became very clear when you compare Mississippi to New Jersey that mobile really is important” he says.  

“So that re-emphasised to me that we needed to make sure that we had a good mobile programme set up. Watching how New Jersey implemented skins also influenced my bill, which is why we’ve included the three types of licence”.

If passed, the legislation will enable the Indiana Gaming Commission to take applications in July this year, with the hope that the state will be up and running in time for NFL season in September.

Ford says Indiana’s move towards legalised sports betting is motivated by providing consumer protection and follows on from a bill he backed in 2016 introducing legislation to regulate the DFS industry in the state.

He says his reasons for backing the bill were two-fold. “First, to provide the gaming industry with another tool in its portfolio to be competitive with neighbouring states, and second, to bring some of that illegal sports wagering market into a regulated industry so we can make sure we have consumer protections.” 

The legislation is not “about chasing any revenue or tax dollars”, he adds. “At the end of the day it’s a marginal business and I don’t think there’s going to be a huge amount of tax revenue generated from sports betting in Indiana”.

Ford has been quoted as estimating tax revenue for sports betting would be between $3m and $18m per year but says making the offer mobile is key to getting anywhere near the top of that bracket.

For operators, barriers to entry are intended to be relatively low. “Our intent is to have a 6.5% tax, which will be the lowest in the United States, and our licensing fee is $100,000,” Ford says.

Esports are currently off the table but Ford hasn’t ruled out giving the vertical consideration at a later date. “We are a conservative state and there is some concern from my colleagues that esports is really for minors, so it was easier for me to not include esports and come back to it,” he says. “I think we will definitely look at it down the road”.

Senator Jon Ford will speak at ICE North America in Boston between 13 and 15 May 2019. The senator will whether official data requirements will contribute to the creation of a sustainable market in the US.
 

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