The U.S. Supreme Court has established a framework for calculating damages in federal court under the Racketeer Influenced and Corrupt Organizations Act (RICO). The Court held in the case of DirecTV v. Leto, that a plaintiff’s damages under RICO should be calculated as the “difference between what the de fendant actually paid and what the plaintiff would have received in a properly executed and delivered arm’s length negotiation.” In other words, a plaintiff who has entered into an illusory contracts with the defendant is entitled to the benefit of his bargain.
Forbes’ Matt O’Brien highlights five ways the betting industry is currently complying with this new legal standard and how this may affect consumers in the long term.
1. Bets Are Being Settled
Sportsbooks are now required to settle bets in accordance with the Supreme Court’s decision. In other words, if a bettor and bookmaker agree to the terms of the wager, the bookmaker must follow through and fulfill his obligations under the contract. This places an added measure of trust between the two parties, which benefits the consumer and the sports betting industry as a whole.
2. Punters Are Choosing To Sit Out Big Games
The New York Times’ Andrew Flowers notes that many professional and college football punters have chosen to sit out big games due to the risk of losing their entire bets. In other words, if a team you support loses big, you may lose everything you wagered on that game. The risk of loss certainly discourages wagering on big games and could cause some fans to stay away from their respective teams’ biggest matchups. This has the potential to hinder fan engagement and threaten the long-term health of the sports betting industry.
3. Bookmakers Are Offering Consumers More To Bet On
To attract customers, sportsbooks are now offering consumers more to bet on. For instance, the bookmaker may take into consideration the price of each item or event in an attempt to create a more attractive betting marketplace. As a result, customers may be spending more money than they would otherwise. However, as Matt O’Brien points out, the long-term impact of this strategy is still uncertain.
4. Online Bookmakers Are Optimizing For Performance
Sportsbooks that operate online know that performance is key if they are to succeed and attract customers. To that end, they have implemented various devices and software that help the user navigate through the site more easily and quickly. Additionally, they are making use of big data and advanced analytical tools to ensure they are always offering the best possible odds to their customers. This performance-based approach to online sports betting could very well lead to a paradigm shift in how we will see online betting in the future.
5. Consumers Are Redefining The Thematic Nature Of Their Bets
The thematic nature of sports bets – i.e., making wagers on one or more sporting events that will occur at a particular time and location – is being redefined thanks to changing consumer habits and the rise of recreational betting. As more people choose to wager on events that take place outside of the mainstream sports, the industry is adapting quickly to meet their needs. For example, the rise of eSports betting has enabled fans to place wagers on the outcome of video games. The video game industry is also reaping the benefits of this trend as more and more people are engaging with the games and keeping track of the scores through online betting.
The betting industry is always adapting to stay ahead of the curve, and for the most part, its transformation has been managed successfully. However, in some cases, this adaptation has caused short-term problems that could potentially be more damaging in the long term. The U.S. Supreme Court’s decision in DirecTV v. Leto requires bookmakers to settle bets in accordance with the terms of the contract. Therefore, if a bettor enters into an unsound contract with a bookmaker, the bookie could potentially be on the hook for a large sum of money that he simply does not have. This risk is certainly something to consider before you make a wager; if you are unsure of whether or not a bookmaker is trustworthy, then it might not be a good idea to play with him.