Before several state attorney generals tapped the brakes last season, fantasy football was taking the country by storm. Then the bubble burst. Now, a Nevada startup helmed by a sports-betting veteran is rolling the dice on fantasy’s return.
Vic Salerno has been in the sports-betting business since the 1970s and has spent his career inventing ways to make gambling more accessible—from creating Nevada’s first computerized bookmaking system to, more recently, developing race and sports kiosks and a mobile sports wagering app. He expanded Leroy’s Race and Sports Place into a statewide chain with 53 locations and 19 satellite kiosks before his company, American Wagering, was acquired by British super-bookie William Hill in 2012. Salerno then served as chairman and chief technology officer of William Hill until February 2016. That’s when the American Gaming Association Hall of Famer founded USFantasy Sports, the first fantasy sports operation licensed in Nevada.
“Fantasy sports,” Salerno says, “is what younger people like now.” With a long history of successfully regulating sports betting, Nevada was a natural launching pad for his new venture.
Calling itself “next generation Daily Fantasy Sports,” USFantasy Sports uses a pari-mutuel model, which means that players aren’t betting against the house. Mostly used in horse racing, pari-mutuel betting puts all money into a pool, which is then proportionally divided among winners, minus a cut for the house.
“We are different from a DraftKings or FanDuel because our process is entirely transparent,” Salerno says. “Anyone can see the odds changing as it happens.”
USF currently offers action on football and basketball, with hockey, golf, NASCAR and baseball coming soon. In football, bettors pick from groups of quarterbacks, receivers and running backs to win, place or show in their category. Points are earned for each positive yard, with additional ones for touchdowns and other big plays.
It’s an oft-repeated truism that there is no “I” in “team,” but fantasy bettors can pick a winner from a losing team. In fact, Salerno says that is more common than expected.
“Many times,” he says, “a quarterback on a team that falls behind early is going to throw much more than one that’s winning most of the game. So often a losing team’s quarterback wins.”
In addition to the straight-up win/place/show betting, USF offers Daily Double, Pick Three, Exacta and Trifecta bets, and what Salerno says is “the biggest overlay in the history of Nevada sports betting,” the Million $ Seven contest. To win a million dollars, all a bettor has to do is wager one dollar and correctly pick the top seven players in seven different prop groups.
Just as with other DFS, players can win money by picking top performers. There are telling differences, though. Where DraftKings and FanDuel have argued that what they offer isn’t gambling and therefore doesn’t fall under antigambling statutes or gaming regulations, USF is positioned as a pari-mutuel wagering product. That’s smart, because states have been regulating pari-mutuels for decades, so USF isn’t asking for a legal carve-out or new regulatory structure. It also means that racetracks, which have been struggling for years, are ideal places to host USF wagering in states without Nevada’s network of legal sports books.
That pari-mutuel structure helped USF quickly become the first legal DFS purveyor in Nevada in June. It also may help the company get up and running in other states soon. Salerno says that USF is currently in talks with Colorado, Pennsylvania, West Virginia, Mississippi, New York and California, among other states. Unlike other DFS companies, which would elbow out existing operators, USF would complement those already in the market, Salerno says.
“Racetracks are interested in putting in something that will bring in a younger crowd on a daily basis,” he adds.
For his part, Salerno thinks there is ample room for traditional sports betting and his product. “Fantasy players are a little different from traditional sports bettors,” he says, with more of an emphasis on individual performers. Where there is no legal betting, though, he admits, “there will be more interest.”
People have never had a hard time finding different ways to gamble, and USF’s pari-mutuel twist on DFS, with all the institutional benefits that go along with it, could prove successful in many states. As Salerno has seen in his nearly 40 years in the business, there is one constant: People like risking money to prove their mettle in picking winners.
David G. Schwartz is the director of UNLV’s Center for Gaming Research.