Football’s future
The Arena Football League’s commissioner Scott Butera enjoyed a successful career in the gaming space, including stints as CEO of Tropicana and then Foxwoods, before he took on the job of turning around the fortunes of the professional indoor league in 2014. His background and current role give him a unique perspective on the sports betting question soon to be decided by the US Supreme Court. Butera spoke to iGaming Business North America regarding his league’s position on regulated sports, leveraging its commercial data and fan engagement opportunities going forward.
iGaming Business: Prior to 2014, your career was in the gaming space — you were CEO of Tropicana and later Foxwoods. How did the move into the sports business come about?
Scott Butera: Originally, I was a banker on Wall Street for about 16 years, in lodging and gaming. But I was always very involved in sports, particularly football, throughout high school and college. I went on to become a trustee of my college [Trinity College (Connecticut)] and am very supportive of the football program they have there. I always loved the game. When I became an operator, I did a lot of restructuring work with Donald Trump, then Tropicana, and also a couple of projects on the Las Vegas strip, and then at Foxwoods for four years. During that time, I became close to a number of the sports teams we worked with, including the Red Sox, the MSG [Madison Square Garden] folks with the [New York] Rangers and the Nicks, and I also did some work with the Patriots. So I really got to know the sports industry quite well, and then was considering a job in mainstream sports, and then the opportunity to run a football league came up.
The sport had then been around for 30 years but never really came to life. It had some notoriety, some starts and stops, and needed some upgrade management. Given my restructuring background and love of football, it was very attractive to me to try to fix this to make it a great sport.
I fitted the bill suitably well. I was always very involved tangentially anyway, and then directly when the opportunity with the Arena Football League came up.
How is the role going in terms of turning the league’s fortunes around?
The league had suffered mismanagement for quite some time. But the sport itself was always very good: it had good fans, good attendance, and the athletes themselves were always great — some of the best in the world. It’s just that its ownership was often not very good, the financial management was not good, and so it was in dire need of repositioning. I came in to try to do that. What we’ve done is we’ve cleaned up our finances, cleaned up our ownership, and we now have nothing but strong owners. We needed to be a little bit smaller to do all that, but we managed it, and now we are in growth mode. We are trying to add new franchises to our platform, which is now fairly well set up. Now that we have new ownership, solid finances, our own network, and our own apps, we are functioning like a real league. We have our own podcasts. Everything you would want to see in a younger league, we now have. We have the building blocks for growth, and now the idea is to get more people to come join us.
How are you looking to reposition the sport?
Football is going to cater very much to the way all sports are going. So we are very much into cutting-edge technology, we are very into digital technology, we are very much into data, which is where sports betting and fantasy sports come in. We really believe people want fast-paced, high scoring, exciting games. Even if those games are two or four hours long, people can use social media and their cellphones to look at different players and different analysis. They can analyse data and ultimately they will receive the full package of sports and entertainment coming together, in that model right there. So for us it’s about combining a traditional sport with cutting-edge technology, data and ultimately sports betting and fantasy sports.
So the AFL is fully supportive of legalized and regulated sports betting in the US?
We are supportive, that’s correct.
How does it work with the other leagues? Were you approached to join the lawsuit against NJ, or was your position on sports betting made clear from the outset?
I haven’t spoken to the other leagues about this. We all have our point of view. We have owners involved in the other leagues, so I try to be respectful of that. We have to walk a careful line. But, that said, we are our own league and we have to do what is right for our league, so it’s best that we just focus on what we want to do as opposed to what others might be doing.
The US Supreme Court will start hearing oral arguments in the NJ appeal case in early December, with a decision expected spring 2018. Notwithstanding the outcome, do you now see licensing/regulation of sports betting across the US as inevitable?
I do. It doesn’t mean that other people might feel differently. But I think there’s a lot of momentum behind it, and with the advent of fantasy sports, it’s hard to shut out the entire industry. If you look at sports betting, 95% plus of it in this country takes place illegally. So, by not legalizing sports betting, we are allowing a black market business to flourish, and that has its own set of consequences, so I definitely think that some form of legalized sports betting will happen. I am not saying I see full-fledged sports betting in every state by the end of the year, but I do think gradually we will introduce sports betting. But even gradually you are still talking $2bn or $3bn of opportunity.
Of that 95% of illegal wagering, most happens on offshore sportsbooks, yet online betting doesn’t even figure in the lobbying push by the AGA and the casinos. Do you think this is the right approach, given that an in-state model would limit the size of the accessible market, and leave many existing bettors outside the scope of US consumer protections?
I think online will take longer in terms of regulatory approval. I’m not saying whether this is right or wrong. I think it would be great to have it from Day One – but the relative complexity of it means it is going to take longer to be resolved.
You touched on the opportunities for greater engagement with your fans that sports betting technology can provide, but how will you be looking to grasp the more conventional commercial opportunities that a regulated sports betting market would offer?
We are not going to get a gaming license, which prevents us from participating in those kinds of revenues. But we do have traditional sponsorships — we have one right now with William Hill, which is a sponsor of our league. We are very close to finalising a deal with a fantasy sports provider. So we are looking at it two ways. Absolutely we are looking at traditional sponsorships — but for one that morphs into something more like a partnership where we can help each other to grow. That’s of more significance for us.
Safeguarding the integrity of the game was purportedly the rationale behind the leagues’ push for PASPA, and the likes of the NFL are sticking doggedly to this position in the lawsuit against NJ. Do you share any of their concerns about the impact that legalized wagering could have on sporting integrity?
No. I’ve been involved in gaming practically my whole adult life. I’m very comfortable with it. I don’t think there are any integrity problems. It’s a very highly regulated industry. There’s very little room to maneuver within that. There are a lot of precautions in place. I mean, obviously anything can happen, it’s a cash business. There’s a lot of foreign money — from Asia, the Middle East — that comes in, so you never really know. But it is very regulated and very closely monitored and, as I said, I have been in it most of my life and haven’t experienced serious problems, so I don’t think there are any integrity issues. I get the recent scandal with the NCAA and basketball and recruiting, but that was a little different. Those incidents always give rise to questions about the influence of sports betting and sponsors on athletes, and whether or not they are getting paid, but again, I think this all points toward legalizing sports betting. Once you legalize it, a lot of these illegal activities have no home, there’s no use for them any more. So that could be a positive.
As someone who has seen the debate from both sides, what advice would you have for any potential stakeholder on the sports side who doubts that legalized sports wagering wold be good for their business?
It’s our view that marrying sports with responsible, regulated, legalized sports betting and fantasy sports is a very good, symbiotic marketing relationship. I think it creates a lot of excitement for fans. It gives fans more reason to go to the games, it provides a lot of the sports teams more ways to interact with their fan base, and learn about that fan base, and to collect data from it. I think it’s similar to what Amazon and Facebook and Google are doing in the traditional marketing and advertising worlds — you could have that same data collection in sports by working with sports betting providers. So I think it’s got tremendous upside.
Other than preparing for sports betting, what will be your main areas of focus as commissioner of the AFL over the next 12-18 months?
Right now, obviously our big focus is just to keep growing. We have built a solid foundation, we have got a lot of good tools in place and the idea for now is to get into more cities, predominantly on the east and Midwest of the United States. We want to add more sponsorships, review our broadcasting deals and I guess continue to get more of them. So, really, it’s new teams, broadcasting advertising and sponsorship that are our big focuses right now.
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