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The XFL is embracing sports betting more than any other U.S. professional or collegiate league ever has.
While the NFL and other leagues spent years fighting in court to stop the spread of sports betting, the XFL kicked off its reboot by consulting with bookmakers on new rules and encouraging media partners to infuse gambling into broadcasts. The XFL may be just starting, but it appears it is already ahead of the gambling game. Now, we'll see if it pays off.
For decades, the traditional leagues in the U.S. kept their distance from sports betting, concerned gambling would tarnish the integrity of the games. At the same time, even though commissioners and owners may have been reluctant to admit it, they benefited from fantasy sports and bettors participating in the massive underground and offshore sports betting industries. Former baseball commissioner Bud Selig once testified that sports betting is 'evil, creates doubt and destroys your sport.'
Times have changed. Legal bookmakers now operate in more than a dozen states, and, at least to this point, sports have survived. The NBA, the NHL and MLB each have official betting partners, and the NFL is moving in that direction. None of them, however, are as all-in on betting as the newest league on the block, the XFL, which, instead of shying away from the gambling industry, is determined to 'embrace the spread.'
'This notion of embracing the spread,' XFL president Jeffrey Pollack said, 'means that our mission, our design and our business infrastructure are all geared to the sports betting future that's coming fast.
'We see a lot of pros to leaning into the sports betting world,' he added. 'It's what our fans want. We don't see cons, we see opportunity.'
Keeping the spread in play
When creating its rules and scoring system, the XFL kept the bettor in mind and even bounced ideas off Las Vegas sportsbook operators to see what worked and what didn't.
'I thought it was very interesting,' John Murray, executive director of the SuperBook at Westgate Las Vegas, said of the informal calls with the XFL. 'It was cool just to talk to the guys who were starting a new football league and see what kind of ideas they had.'
The XFL landed on rules aimed at condensing the game. They wanted to increase the pace of play, eliminate virtually automatic plays like kicking extra points and enhance timing rules to improve comeback opportunities and keep the spread in play longer.
• The XFL's play clock is 25 seconds (it's 40 seconds in the NFL), and the game clock stops only briefly, except for the final two minutes of each half, called 'comeback periods.' The goal was to deliver a similar number of plays per game as the NFL but in less than three hours. NFL games during the 2019 regular season averaged 126.8 offensive snaps and 45.6 points per game. The first four XFL games averaged 124 offensive plays and 38.5 points.
• After touchdowns, teams choose between going for one point from the 2-yard line, two points from the 5-yard line or three points from the 10-yard line. 'This enhances a team's ability to make a comeback,' XFL senior vice president strategy and business development John Scheler said. 'Your bet's in play longer because the team potentially has the ability to come back and cover the spread.'
• Overtime is decided by a pseudo-shootout, with teams alternating single plays from the 5-yard line. Each score is worth two points.
The rule tweaks to timing and scoring were a challenge for oddsmakers. Not knowing how coaches would handle the new options after touchdowns and their success rate on those attempts reduced the value of the traditional key numbers -- most notably three and seven -- that bettors are accustomed to in the NFL and college football. Out of the 19 touchdowns scored in the four games over the weekend, coaches elected for the 1-point option 11 times and the 2-point option eight times. They were successful on four 1-point chances and three 2-point chances.
Creating a point spread, though, was not the toughest task for oddmakers in Week 1. Setting the over/under was.
Circa Sports, a new bookmaking operation in downtown Las Vegas, was the first sportsbook to put up totals on the four Week 1 games. They admitted the process of setting the totals was not sophisticated.
'For me, it was a huge guess,' Circa sportsbook manager Chris Bennett said with a chuckle.
Last Thursday, Circa opened at 40.5 for each game. The first wave of bets came in, all on the over in each game. In less than three hours, the totals on each game climbed into the 50s.
Three of the four Week 1 games went under the total.
Odds-infused broadcasts
For years, play-by-play announcers like Brent Musburger and Al Michaels slyly worked gambling references into broadcasts. 'Some baskets are more meaningful than others,' Musburger might say in regards to a basket that affected the spread. Michaels is known to describe a late score that pushes the game over the total as 'overwhelming.'
There were no veiled references, though, in the weekend's XFL games. Instead, announcers were overt, and the odds were front and center.
Point spreads and over/unders were displayed alongside the scores on the XFL broadcasts on ESPN and Fox, and advertisements for the sponsoring sportsbooks like Caesars and FoxBet popped up from time to time.
In the fourth quarter of the Seattle Dragons-D.C. Defenders game Saturday, ESPN color man Greg McElroy joked about the disappointment fans who bet the over must have felt when the Dragons elected to take points off the board after a running into the kicker penalty, only to squander the ensuing scoring opportunity by fumbling deep inside D.C. territory.
For many sports betting proponents, the odds-infused broadcasts were what they envisioned when the U.S. Supreme Court struck down a federal statute in 2018, allowing states to decide whether to regulate gambling.
Joe Favorito, a longtime sports marketing consultant in New Jersey, was watching the St. Louis-Dallas game Sunday with his 21-year-old son, who asked what the 'O/U 52.5' meant on the scoreboard on the bottom of the screen.
'[He] was casually following XFL and had no idea of the floating betting lines,' Favorito told ESPN. 'He assumed it was another deep dive into stats, not gambling. He figured it was similar to when 'SOG' appeared on a hockey scoreboard for shots on goal or when MLB suddenly added 'MV' for mound visits and 'PC' for pitch count to scoreboards. ... He became more engaged immediately.'
Betting interest
At Caesars Sportsbook in Nevada, less than $10,000 total was bet on the point spread for the opening game between the Dragons and Defenders. It might not sound like a lot -- and compared to the hundreds of thousands of dollars normally bet on NFL games, it's not -- but it was notable and was more than the amount bet on many of Saturday's college basketball games and even some NBA games.
'I think there's an interest, but it's just not something I think people have confidence to bet on yet, on the public side of things,' Caesars senior oddsmaker Alan Berg said.
In New Jersey, sportsbook FanDuel said '20 times' as much money was bet on the first XFL game as was bet on the first game of the now defunct Alliance of American Football League. XFL betting increased from Saturday to Sunday by 55%, according to FanDuel.
The XFL believes it's only the beginning of the league's relationship to the sports betting industry, which unlike its predecessors, it has decided to embrace from the opening kickoff. The XFL has announced multiple betting partners, launched a new free-play gaming app (PlayXFL) and hired sports data company Genius Sports to provide integrity services.
'The XFL should be applauded for its proactive stance in engaging with the sports betting industry,' Chris Dougan, spokesman for Genius Sports, said. 'From its inception, the league has embraced best practices with operators and built strong relationships with the state regulators. By requiring all XFL players, coaches and officials to participate in our online integrity program, the league has made education a key pillar in preventing threats of betting corruption.'
The two XFL games broadcast on ABC and ESPN averaged to 2.9 viewers. There was buzz on social media and at sportsbooks. The XFL is determined to make it last by, in part, being the most betting-friendly league in the U.S.
'For a lot of our fans,' Pollack, the XFL's president said, 'free-to-play gaming, fantasy and legal sports betting have become [as] essential to the football experience as the helmet, ball and jersey.'
Gambling Law: An Overview
Gambling, though widespread in the United States, is subject to legislation at both the state and federal level that bans it from certain areas, limits the means and types of gambling, and otherwise regulates the activity.
Congress has used its power under the Commerce Clause to regulate interstate gambling, international gambling, and relations between the United States and Native American territories. For example, it has passed laws prohibiting the unauthorized transportation of lottery tickets between states, outlawing sports betting with certain exceptions, and regulating the extent to which gambling may exist on Native American land.
Each state determines what kind of gambling it allows within its borders, where the gambling can be located, and who may gamble. Each state has enacted different laws pertaining to these topics. The states also have differing legal gambling ages, with some states requiring the same minimum age for all types of gambling, while for others, it depends on the activity. For example, in New Jersey, an 18-year-old can buy a lottery ticket or bet on a horse race, but cannot enter a casino until age 21. Presumably, the age 21 restriction is due to the sale of alcohol in that location.
A standard strategy for avoiding laws that prohibit, constrain, or aggressively tax gambling is to locate the activity just outside the jurisdiction that enforces them, in a more 'gambling friendly' legal environment. Gambling establishments often exist near state borders and on ships that cruise outside territorial waters. Gambling activity has also exploded in recent years in Native American territory. Internet-based gambling takes this strategy and extends it to a new level of penetration, for it threatens to bring gambling directly into homes and businesses in localities where a physical gambling establishment could not conduct the same activity.
Internet Gambling
Federal Regulation
In the 1990s, when the World Wide Web was growing rapidly in popularity, online gambling appeared to represent an end-run around government control and prohibition. A site operator needed only to establish the business in a friendly offshore jurisdiction such as the Bahamas and begin taking bets. Anyone with access to a web browser could find the site and place wagers by credit card. Confronted with this blatant challenge to American policies, the Department of Justice and Congress explored the applicability of current law and the desirability of new regulation for online gambling.
In exploring whether an offshore Internet gambling business taking bets from Americans violated federal law, attention was focused on the Wire Act, 18 U.S.C. § 1084 (2000). The operator of a wagering business is at risk of being fined and imprisoned under the Wire Act if the operator knowingly uses a 'wire communication facility' to transmit information related to wagering on 'any sporting event or contest.' 18 U.S.C. § 1084(a). An exception exists if that act is legal in both the source and destination locations of the transmission. § 1084(b). The Wire Act’s definition of “wire communication facility” appears to embrace the nation's entire telecommunications infrastructure, and therefore probably applies to online gambling. See § 1081.
The Department of Justice maintains that, under the Wire Act, all Internet gambling by bettors in the United States is illegal. U.S. House of Representatives Committee on the Judiciary Hearing on Establishing Consistent Enforcement Policies in the Context of Online Wagers, 110th Cong., Nov. 14, 2007 (testimony of Catherine Hanaway, U.S. Attorney (E.D. Mo.), Dept. of Justice). The Fifth Circuit disagreed, ruling that the Wire Act applies only to sports betting, not other types of gambling. In re MasterCard Int’l Inc., 313 F.3d 257 (5th Cir. 2002).
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which made it illegal for wagering businesses to knowingly accept payment in connection with unlawful Internet gambling (though it does not itself make Internet gambling illegal). 109 Pub. L. 109-347, Title VIII (Oct. 13, 2006) (codified at 31 U.S.C. §§ 5301, 5361–67). It also authorizes the Federal Reserve System to create regulations that prohibit financial transaction providers (banks, credit card companies, etc.) from accepting those payments. See 31 U.S.C. § 5363(4). This Act, along with threats of prosecution under the Wire Act from the Department of Justice, has caused several Internet gambling businesses to withdraw from the U.S. market.
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In response, House Representatives introduced multiple bills in 2007 to soften federal Internet gambling law. If passed, the Internet Gambling Regulation and Enforcement Act and the Internet Gambling Regulation and Tax Enforcement Act would license, regulate, and tax Internet gambling businesses rather than prohibit them from taking bets from the United States. Alternatively, the Skill Game Protection Act would clarify the Wire Act to exempt certain games such as poker and chess.
State Regulation
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In addition to federal measures, some states have enacted legislation to prohibit some types of Internet gambling. In 2006, Washington State amended its Code to make knowingly transmitting or receiving gambling information over the Internet a felony. See Wash. Rev. Code § 9.46.240 (2006). Other states with similar prohibitions have made it a misdemeanor instead. See e.g., 720 ILCS 5/28-1 (2007).
States have not been particularly active in enforcing these laws, possibly due to a conflict with the dormant Commerce Clause doctrine. That doctrine theorizes that state law applying to commerce outside the state’s borders is unconstitutional because that power lies with federal, not state, government. In particular, federal preemption has obstructed states’ attempts to regulate gambling activity on Indian reservations within state borders. See Missouri ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d 1102 (8th Cir. 1999). The federal Indian Gaming Regulatory Act, 25 U.S.C. § 29 (2000), governs gambling activity on Indian reservations, but the extent to which it and other federal gambling laws preempt state action in the Internet arena is uncertain.
menu of sources
Federal Material
U.S. Constitution and Federal Statutes
- U.S. Code: Title 15, Chapter 24: Transportation of Gambling Devices
- U.S. Code: Title 15, Chapter 57, Interstate Horseracing
- U.S. Code: Title 18, Chapter 50: Gambling
- U.S. Code: Title 18, Chapter 61: Lotteries
- 18 U.S.C. §1953 (Interstate Transportation of Wagering Paraphernalia Act)
- 18 U.S.C. §1955 (Illegal Gambling Business Act of 1970)
- 25 U.S.C. §§2701-2721 (Indian Gaming Regulatory Act)
- U.S. Code: Title 28, Chapter 178: Professional and Amateur Sports Protection
- Code of Federal Regulations: Title 25, Chapter 3: National Indian Gaming Commission, Department of the Interior
- Proposed Internet Gambling Prohibition Act of 1997 (not passed)
Federal Judicial Decisions
- Greater New Orleans Broadcasting Association, Inc. v. United States, 527 U.S. 173 (1999)
- Ratzlaf v. United States, 510 U.S. 135 (1994)
- Chickasaw Nation v. United States, 534 U.S. 84 (1999)
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State Material
Other References
- '14 Charged in Internet Betting' (Washington Post, March 5, 1998)
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