If you’ve ever put money on the line in the name of business, you may have considered betting against a company. But exactly what is betting against a company, and how does it work? CNBC’s Serena Marshall explains in this article.
The Rise In Online Gambling
It used to be that if you wanted to place a wager on something, the most you could do was join a bookmaker and place a lay bet on the outcome of a sporting event. But times have changed. Nowadays, there’s a whole world of online gambling waiting to be discovered by entrepreneurs who want to try their hand at the wagering business.
In a nutshell, sports betting, as it is practiced online, is a wagering activity conducted between two or more parties where one of the parties is a bookmaker. A bookmaker is an individual or business that accepts wagers from people or entities wanting to bet on sporting events. Bookmakers make money through charging fees for placing wagers and taking bets, and also from commissions paid out on winning bets. Companies like DraftKings and FanDuel, which are focused on sports betting, have built their businesses on the idea that people want to engage in sports betting privately and without having to go through a bookmaker. In other words, they want to be able to place a wager without having to go through a middleman.
The Two Types Of Sports Betting
There are two types of sports betting: pari-mutuel and ante-post. Pari-mutuel betting is named after the French word for “together,” because it involves wagering on multiple events that are contested by multiple teams or individuals, with the profits being split proportionately among the winners. For example, if you wager $2,000 on four horse races, you’ll win $1,000 four times, with the remaining $1,000 going to the fifth-place finisher. Ante-post betting, or “backing a selection,” is when you bet on the outcome of a single event (e.g., the Super Bowl or the World Series).
You might be wondering at this point how two types of betting can exist in the same industry. To start, there are actually a number of different organizations that regulate and oversee sports betting, including the Nevada Gaming Commission, the Singapore Gaming Commission, and the Kahnawake Gaming Commission in Canada. The key difference between each type of organization is that the first two are primarily concerned with monitoring and regulating sports betting while the latter is focused on overseeing the fairness of the games.
The Benefits Of Online Gambling
If you’ve ever shopped at a traditional brick-and-mortar sporting goods store, then you may be familiar with the problem of getting your hands on a game once it’s been decided. But online gambling solves this problem by providing access to more games than ever before, with the ability to place bets on the go. Having a smartphone connected to the Internet is all you need to access the entire planet of online gambling, wherever you might be. And because mobile casinos are becoming more and more sophisticated, you can even bet on the go, using your smartphone’s GPS to place wagers in the location of your choice.
The Drawbacks Of Online Gambling
While the benefits of online gambling are undoubtedly there, the industry also has its drawbacks. One of the biggest issues is the problem of being connected to the Internet. For those who are online gambling addicts and can’t stay away from the devices, the lure of being able to place bets whenever you want is certainly difficult to resist. And since the technology makes it so easy to bet whenever you want, it can also become an issue of integrity. After all, if you can place a bet whenever you want, why not do so? Or, at least, make your money look like it’s been placed without any problems?
The simple answer is that it’s a violation of protocol to place bets after the designated wagering hours, since the integrity of the games is supposedly protected from outside interference. However, in reality, many casinos have their own internal policies that are less than reputable and allow them to skirt these rules. The problem is that they eventually get caught, and when they do, it usually ends up being a major embarrassment. For example, in March 2019, the New York Gaming Commission terminated the registration of the Galaxy Entertainment Group, finding that they violated state regulations by accepting wagers outside of the regulated sports betting markets. In this case, it wasn’t even a skirting of the rules; they were blatantly breaking them.
A Regulatory Wild West
The United States is home to some of the most influential and sophisticated organizations in the world of sports. But for every rule and regulation there is an exception that breaks the rules. For example, in 2019 the Justice Department sued the state of New York, alleging that it violated federal law by enforcing sports betting restrictions against some but not all interstate bookmakers. Specifically, the federal government is challenging the constitutionality of the New York State Constitution, which prohibits gambling except as provided by law.
It’s fair to say that the regulatory environment of any country, state, or province governing sports betting is chaotic at best, with each individual office battling it out with the other for supremacy and a general lack of cooperation between agencies. This is made even more complicated by the fact that some states have a vested interest in seeing the sports betting industry regulated and controlled by other states, or by the federal government, since they make a lot of money from sports betting and would like to keep it that way. In fact, lobbyists from the sports industry actively work to influence legislation and judicial decisions that impact their business.
Where Does All This Lead?
If you’re looking to get into the online gambling business, then it’s important to understand where all of this is going. Are there legitimate opportunities for those who choose to dive in? Or is the entire industry filled with sharp operators who are taking your money and running? There are a number of legitimate online gambling businesses that are currently available, like BetOnline Poker, which is licensed and regulated by the government of the State of Nevada, and also accepts players from all over the world. But if you want to play in unregulated markets, with no government oversight, then you might be putting your money at risk.