The New Sports Economy
The New Sports Economy Institute (NSEI) will provide comprehensive finance education using a sports-based curriculum so the general public will make better personal financial decisions in their daily lives. The primary delivery vehicle will be the Internet and a prime driver will be ease of understanding and ease of access at little to no cost. Our principal mission is to deliver valuable and practical sports-based finance content that can be readily accessed on a mobile device from New York to the Democratic Republic of the Congo. Where practicable, NSEI will work within established distribution channels (such as existing schools and learning facilities) to deliver the widest possible impact with the most effective and least expensive cost basis. Additional products and services to support this mission will be developed and delivered to organizations and individuals always with an eye to highest impact at the lowest (or no) cost.
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"Scut Farkus" from A Christmas Story to Amend Constitution and Stop Sports Bullies
SportsVote – General What is The Sports Vote? The Sports Vote is a social movement enabling all responsible sports markets to grow and flourish creating a brand new ecosystem called the new sports economy. A sports market? You mean gambling? No, on the contrary and that's our little secret: Sports and money can mix in socially beneficial ways. How so? For as long as anyone can remember, sports betting was the only combination of sports and money man has ever known and we all know now how that worked out. Recently, a new blend, daily fantasy sports has become popular. It’s hard to get out of the mindset that mixing sports and money always brings disaster because it always has. Daily Fantasy Sports ("DFS") & Sports Betting Do you think daily fantasy sports is gambling? Absolutely. Why? Isn’t it a game of skill? It probably is but that doesn’t matter. The skill argument works when you look at games like chess, or the sports games themselves. Daily fantasy sports is often called a game but it is not a game. What is it then? A market. How do you distinguish between games and markets? Simple. Games are self-contained. Markets are based on information provided by real world events. Ask yourself this: “Can we play this on Mars?” If yes, it is a game. Otherwise, it is a market no matter what you call it. You can play chess on Mars if you have two people and a chessboard. You can play football once you have 22 people and a ball. But, you can’t play fantasy football because you need to have ready access to the game stats. Can something be a market and not gambling? Of course. The stock market is an example. But some people say the stock market is the biggest casino. You can be reckless and gamble in any market, yes. But, that doesn’t make the overall market gambling. Why is it not gambling? It serves a purpose – For example: companies can raise money, prices provide valuable information and investors can have a long-term asset tucked away in their portfolios. What about other markets that are not gambling? Derivatives markets would be another example. Derivatives markets look like gambling sometimes. Again, you can be reckless and gamble there, too. But the overall market is regulated by the federal government for a reason. Similar to the stock market, you have price information that is beneficial to various stakeholders. In addition, derivatives markets offer risk management opportunities. Why is sports betting gambling? It’s an entertainment vehicle that doesn’t serve a purpose. You don’t really have prices to begin with (odds don’t count), so naturally there is no price information provided to the industry. Nobody is raising any capital, or managing risks. It’s not an asset you can tuck away in your portfolio. Sometimes bookmakers use other bookies to lay off risk. Is that not risk management? Good try, but no. That risk is not one that the sports industry naturally faces, it’s artificially created by the gambling itself in the first place. Why is daily fantasy sports gambling? Same reason. You don’t have prices. No raising capital or risk management. There is no purpose whatsoever, other than the sheer entertainment experienced by its participants. But players have prices… Yes, but only for one day. That’s not the type of price action that provides valuable information to the marketplace. So there are markets that are not gambling and there are markets that ARE gambling? Correct. Stock markets and derivatives markets, no matter how they may seem sometimes, are not gambling. Sports betting and daily fantasy are gambling. There are games that are not gambling and there are games that ARE gambling? Yes, chess is not gambling. Roulette is gambling. Poker is somewhere in the middle. For a game, skill matters. More skill means you are getting further away from gambling? Yes. For a market, skill does not matter in determining whether it is gambling or not? No, it doesn't. Since markets are based on real-world information, there will always be an opportunity for the skilled person to process that information better than others and potentially make money. If skill does not determine whether a market is gambling or not, what does? We should take a holistic approach and look at the overall purpose and social benefit the market provides. Why is daily fantasy hiding behind the skill argument? That’s the tiny thread holding their entire legal claim together. Making it look like a game and focusing on the skill argument allows them to be compliant with most state laws, but it doesn’t matter. It is gambling and everyone is quickly seeing through that nonsense. What about fan engagement? It is true that daily fantasy makes you watch more sports, but it also negatively impacts the way in which you watch those sports. You are not rooting for your team anymore. There is no loyalty. You are rooting for certain players – the ones drafted onto your fantasy team – even if they score against your favorite team. Sports betting does the same, instead of rooting for a win, you root for the spread. Put this altogether and it creates conflicted fans. We long for the old times when our parents took us to the ballpark and we were loyal only to our teams. Losing that pure, uncalculated loyalty is losing an important fabric of our society. Protecting Integrity Besides not having a social purpose and creating fan conflict, why is sports betting so destructive to society? Because it undermines the integrity of sports. Game fixing. Point shaving. Gamblers stalking college kids. You name it. Why is this happening? It’s all about incentives. If you can triple your money overnight, it becomes way too easy to risk a lot of capital and promise to share some of those proceeds with an athlete, referee or somebody else while asking him/her to influence the outcome in return. Big payments based on game outcomes make people do bad things, don’t they? Yes, and we hate that. Purity of sports is not to be messed with. That won’t happen in responsible sports markets. Can responsible sports markets deliver payments on game-based outcomes? They could. This is another big misconception. Having payments on outcomes, per se, is not the issue. People freak out when they hear game outcomes and money in the same sentence, but that’s simply because they are hard-wired to think about all-or-nothing bets in a single game context. Are all-or-nothing propositions always gambling? While this sounds reasonable at first, the answer is no. It is true that gambling is generally associated with all-or-nothing propositions, but some contracts in the financial markets are also all-or-nothing, e.g. some option contracts. The difference? A sports bet provides no purpose. A financial contract on the other hand, provides price information and an opportunity for risk management. But you can lose your shirt with an option contract… Like a sports bet, the financial contract can be used for speculative purposes and the outcome could be dangerous. However, unlike a sports bet, when those speculative activities are combined under the umbrella of a regulated marketplace, they improve the price information as well as the risk management opportunities. A healthy dose of speculation is actually healthy for the markets, provided that the marketplace turns it into something useful. And if something is not all-or-nothing, does that mean it is not gambling? The answer is, again, no. Here is an example. Take a $25 contest in your favorite DFS site and change the payouts. Instead of giving a jackpot prize to the top finisher, let him/her win $1,000. Similarly, adjust the prizes on the lower end so even the last-place finisher gets, say, $5. Now, this is not an all-or-nothing structure, since all participants are guaranteed something no matter what. However, other than the prize structure, you have not fundamentally changed anything. There is still no purpose. Therefore, it is still gambling. So all-or-nothing is not determinative whether something is gambling or not. Correct. Once you identified you have a market, and not a game, the only thing that matters is purpose. Look closer if you see all-or-nothing propositions, but don’t base your decision on something that can be tweaked with a few keystrokes. Purpose, on the other hand, cannot be faked. Sports betting is gambling and undermines the integrity of sports? Yes. This is precisely why sports betting is even worse than casino gambling. Not only do you have all the problems and agony that comes from gambling, but it also threatens the integrity of sports. Does it matter whether it’s a bet on a single game or something else, say end-of-season placement? Either way it’s gambling. Single-game bets are the worst for integrity and unfortunately, that’s where the majority of the action is. Longer-term bets are still problematic, because eventually there will be one game or two that will impact how the bet will pay out and you have integrity issues. What about daily fantasy sports? It’s all-or-nothing and it’s based on single games. It is based not on game outcomes but on player statistics. While the integrity issue may not be as drastic as sports betting because of that, it still is a big threat because information is valuable and some people will misbehave to gain an edge if there is a lot of money at stake riding on a single game. Stalking college kids may still turn to useful information for the fantasy line-ups. A referee can potentially call a game a little bit differently. Obviously, DFS is still gambling. It’s worse than casino gambling, and only marginally better than sports betting. Going back to game-based payments…How does that protect integrity? Game-based payments, if they exist, can be set up in way so they are a very small percentage of your capital at risk. There is simply no incentive to fix a game, shave points or misbehave to get an information edge. If the incentive is there, people will find a way to cheat and even the best monitoring systems will not work. We are a big fan of setting up the incentives correctly up front as opposed to punishing people after the harm is done. What SportsVote is striving for is to identify socially beneficial sports markets AND make sure integrity is preserved. The New Sports Economy Changing gears here. If we create responsible stock markets, what would be the effect on the economy? Beyond huge. Why is that? “Financial news may have great human interest potential to the extent that it deals with the making or breaking of fortunes. And the ﬁnancial media can present their perennial lead, the market’s performance, as an ongoing story—one that brings in the most loyal repeat customers. The only other regular generator of news on a comparable scale is sporting events. It is no accident that ﬁnancial news and sports news together account for roughly half of the editorial content of many newspapers today” Irrational Exuberance, by Robert Shiller, Winner of 2013 Nobel Prize in Economics Not every day you find two potent forces, sports and money, coming together like that. But that mixture is explosive. Which is precisely our point. The world has seen the dark side of that combination so far, and it will get even worse if daily fantasy continues to expand and sports betting gets legalized. But the mixture can do wonders for our economy and society if managed right. With great power comes great responsibility. What does the new sports economy look like? For the sports industry: new revenue channels for the leagues, regulated sports trading and increased fan engagement. For everyone else: A brand new ecosystem, job creation, growth, tax revenues and much more. The beauty is that none of that comes at the expense of integrity or welfare of the sports community. It’s a win-win for everyone involved. When you say new revenue channels for the leagues…? We believe in sharing. Every responsible sports market can decide what works for them, but we believe the leagues deserve more than the indirect benefit of fan engagement. We feel what works best is the old-fashioned partnership: 50-50 revenue sharing. You propose to give away 50% of the revenue to the leagues? For any sports markets we bring to life, yes. Without them, we wouldn’t exist and it is the right thing to do. As well, their participation will make the market much larger. Does a sports market help me understand finance better? Yes. We believe that sports is the best way to teach finance and view this as a paradigm shift in financial education. People will be drawn to their passions and it’s much easier to learn finance and start making better decisions if your entry point is sports. The financial literacy/education piece is a big part of what we do and why we are excited about responsible and socially beneficial sports markets. Concluding Thoughts The combination of sports and money can do all this? We are believers in capitalism but in a much gentler, more humane form. Sports and money are a powerful combination and if set up wisely, it will take us to new heights. It is unfortunate that it has not always been this way, so we need to erase certain prejudices that formed over centuries and demonstrate to everyone that sports and money do not always equal gambling. What does the Sports Integrity Protection Amendment (SIPA) do? It’s the first stop for The Sports Vote. When it gathers enough signatures in California, it will go in front of the voters in the November 2016 general election. When it passes, sports trading will become a constitutional right! From there, the legislature will write the laws and fill in the details to make sure everything comes together properly. What is next for The Sports Vote? We will not rest until the concept becomes a reality and legalized sports betting is stopped in its tracks. Finally… what if I'm not in California? That's alright. You can be in California or The Congo and still sign this online petition and share with your friends. That way we'll keep you up to date on our progress and the more support we have, the better. We'll get to your home town even faster with your help! 9 Reasons Why You Should VOTE FOR SPORTS: 1. You are a sports fan. 2. You think sports can play an even bigger and a more central role in your life. 3. You think socially beneficial combinations of sports and money can exist. 4. You think rooting for your team is much better than rooting for the spread or certain players. 5. You like the concept of responsible sports markets. 6. You want to protect the integrity of sports. 7. You want more jobs, better jobs and growth. 8. You believe in sharing and caring. 9. You believe in good education, financial literacy and empowerment. To a better world! Zack Ward The Sports Vote Ambassador & "Scut Farkus" from A Christmas Story P.S. You can read the full text of the Sports Integrity Protection Amendment (SIPA) in California here: http://tinyurl.com/sipaamended and see it online here: https://www.oag.ca.gov/initiatives/active-measures (#15-0082). The detailed summary as provided to the California government is here: http://tinyurl.com/sipasummary