Standing on the outside, looking back in at baseball, former MLB slugger Ryan Howard sometimes wonders how much money was bet on him and his team’s performances or what Las Vegas had the over/under on his home runs for a season set at during in his prime.
For a century, staying away from gambling has always been one of baseball’s cardinal rules, so Howard didn’t think much about the odds during his 13-year career.
“All the fantasy managers, I guess, kind of let me know how I was doing later on,” Howard told ESPN in a recent phone interview. “It was funny. You’d always have a random person coming up, saying, ‘Ryan, thanks, bro. You helped me with my fantasy team.'”
Howard, who announced his retirement from baseball in September, is now a partner SeventySix Capital, a venture capital firm targeting opportunities in the growing legal sports betting market in the U.S. SeventySix Capital recently invested in the Vegas Stats & Information Network, a sports betting media outlet featuring hall-of-fame broadcaster Brent Musburger and a studio located in middle of a Las Vegas casino.
Howard and SeventySix Capital partner Wayne Kimmell spoke with ESPN about entering the sports betting and what next as more and more states elect to offer legal sports betting.
(This Q&A has been edited for clarity).
Q: Ryan, now that you’re out of the game, how has your perception of sports betting has changed?
Howard: I never gambled, but being out in the business world and changing uniforms, looking at it now, the opportunities are endless. It’s going to be insane, just the thought of all the opportunities of bets: What pitch is this guy going to throw? Does the batter swing? If he does, is he going to hit it, and what kind of hit is going to be? The possibilities are endless. That can be your new kind of slots, if you will. Your dollar bets, $5 bets, in-game, inside the stadium.
Again, kind of like the fantasy, I think it’s going to change the way people ‘fan’ and keeping in touch with people who aren’t necessarily in their area. You could be in Philadelphia and betting on games out in LA. So I think it’s going to definitely draw more attention in the way that people look at sports. Q: Why did you believe VSiN was a good investment?
Kimmel: Getting back to the core of what we do at SeventySix Capital is invest in smart, nice people who want to change the world. And we see the sports betting industry as one of those opportunities that is just going to be this really, really big, brand-new $250-billion-plus legal, regulated market.
So when we saw this occurring and happening, we looked at the market and broke it up into four specifics areas: No. 1, we wanted to look at how we could get into the data collection side; (2) we wanted to look at how we could get into the data analytics; (3) we wanted to get into the media side of the business, as well as (4) the broadcasting side.
Specifically with VSiN, it really fits in the media side. They’re looking to build this brand-new media network for the sports bettor, very similar to how CNBC created a media network for the stock ticker.
Q: Do you expect to continue to invest, expand in the sports betting space?
Kimmel: We believe in investing in startups, very early stage businesses. When we look at that world and the opportunities that are out there today, we believe that the entrepreneurs, these brand-new companies, the innovators will be the ones who will create the Googles, the Facebooks, the Amazons of the sports betting industry. And we want to invest in the entrepreneurs who are creating those companies.
On the data collection-side, which we think is an important part of this, we’ve made an investment into ShotTracker, a company that keeps track of over 100 different movements that a basketball player makes on a basketball court. That data can be used, not only just for coaches, general managers and broadcasters, but also for the sports bettor. But that data needs to be analyzed, so we’ve also made an investment on the data analytics side of things, called Swish Analytics. Swish, we really think is interesting, because what Ryan was describing, this idea of being able to bet in-game, and all of these prop bets, and just the fact, in Europe, over 70 percent of bets are done in-game. Here in the U.S., it’s less than 5 percent. That’s a huge untapped market and new opportunities for people who really want to engage with and have a good time as they watch.
Q: Ryan, you mentioned some of the in-game betting opportunities. There have been some concerns, including from MLB lobbyists, even former MLB pitcher Al Leiter, that those are the types of wagers that could be compromised. What are your concerns about legalized sports betting?
Howard: It’s definitely going to be interesting to see how it challenges the integrity of the game. Obviously, I think once it was passed, I think every league, NFL, NBA, MLB, were all talking about trying to come up with stuff that are going to continue to help keep the integrity of the game.
A lot of it is going to fall on the actual athletes themselves. I think MLB and all the other leagues are going to try to help regulate it the best way they can, but it’s going to fall on those guys to try to continue to protect the integrity of the game, leave that stuff to the bookmakers.
Every year in spring training they always have the conversation about gambling and sports betting.
Q: Do you think the leagues are entitled to a cut of the amount wagered on the games, an integrity fee?
Howard: I’m glad I’m not in that situation, that position to have to try to figure that out. It will an interesting to see. Anytime there’s a cut or some type of profit to be made, obviously you’re going to (examine) it, when they’re using your organization.
Wayne: As Ryan just said, it’s a complicated issue. I think the leagues are going to get their money, if you look how much money the teams in Europe are able to make from sponsorships and other types of ancillary revenue sources from the betting companies. I think that’s the way it will play out. I really don’t think there will be integrity fee.
Q: Get out your crystal ball, guys. What do you see in that that excites you about the future?
Howard: I think we’re in the crystal ball right now, with sports betting and esports. You have two completely new sectors, where it’s wide open. As these continue to develop, with the popularity of esports, the possibilities with that are endless. It’s a very exciting space to be in, to see where it winds up, and I think it’s the same thing with sports betting right now.
Kimmel: Someday, I envision across from the NASDAQ, across from Times Square, you’ll also have a VSiN studio, with a ticker that will have the lines on the games, just like prices on different stocks.