Bernie’s Redbird Review: How Will The Cardinals Benefit From Legalized Betting?

THE REDBIRD REVEW

Sportsbook at Ballpark Village? In a close victory Tuesday, Missouri voters narrowly approved a ballot initiative to legalize sports betting in the state. According to media reports, the straight yes-or-no measure passed by a slim margin of about 7,000 votes out of nearly three million cast. The campaign was supported by a coalition of professional sports teams including the St. Louis Cardinals, St. Louis Blues, Kansas City Chiefs and Kansas City Royals.

Repeated attempts to legalize sports betting through legislation failed to get by the Missouri state senate, but the state’s voters came through. The provision grants market access to the state’s pro teams, and that should lead to financial benefits for the Cardinals and Blues.

DraftKings and FanDuel teamed up to advocate for a successful outcome by investing $41 million in an aggressive ad campaign. They were opposed by a rival gaming company, Caesars Entertainment, which spent a reported $14 million in an unsuccessful attempt to defeat the proposal.

The thing is, Caesars Entertainment will likely establish a sportsbook presence in Missouri (if permitted). According to Sportico, the company’s opposition stemmed from the need to have legally approved sportsbook revenue flow directly through pre-existing casinos. Caesars Entertainment sought to protect its interests; the company owns three casinos in the state including the Horseshoe in St. Louis.

So given the money that each side invested to win the ballot initiative, FanDuel and DraftKings defeated Caesars by a score of 41-14.

What does this mean for the Cardinals and Blues? What kind of money are we talking about? We’ll know more as Missouri’s pro teams make plans and announce them. But MLB’s Chicago Cubs are one example to look at.

What kind of money are we talking about? In 2020, DraftKings and the Cubs announced a partnership that included the construction of a sportsbook at Wrigley Field. The Cubs reportedly agreed to a 10-year contract for $100 million, which means an average of $10 million per year. The Cubs also collect a share of the food and beverages sold at the Sportsbook.

The sportsbook opened in June, 2023. At that time fans could make legal wagers from their phones from inside the facility (and the ballpark) but weren’t permitted to make in-person bets with the sportsbook’s personnel or wagering machines until March, 2024. The venue, attached to Wrigley Field, has a massive 2000-square-foot video screen and offers full service for food and drink. It’s popular with Cubs fans.

I can see something similar taking shape at Ballpark Village. The infrastructure already exists, and can be repurposed. Cardinals president of business Bill DeWitt III has been working and planning on this for years, so the franchise should be ready for a quick turnaround to the opening of business.

This should be a win-win for the Cardinals. They’ll make money off of this; it’s just a matter of how much. Having a sportsbook partnership (and on-site wagering) doesn’t mean the Cardinals will now have the cash to go out and sign some expensive free agent to a monster contract. And the Cardinals already have a lot of revenue coming in. This won’t transform their financial firepower. But it will help. And it won’t be as easy for Cards management to plead poverty.

A big part of that is up to the team to market and maximize the potential of this new enterprise and take advantage of the opportunity. And should help the Cardinals navigate through problems with their local TV contract and the instability of their partner Diamond Sports. That annoying issue has impacted the team financially … not that anyone out there should feel compelled to have a charity auction to benefit the DeWitt family.

My snark aside, I sincerely believe this: it’s good for the Cardinals to have strong financial health. Among other aspects of this, the Cards can move up to where they should be in the annual MLB payroll rankings.

I’m not as obsessed with payroll as many others. And that’s for several reasons:

Since Bill DeWitt Jr. purchased the team at a bargain price before the 1996 season, the Cardinals have ranked among the MLB top 10 in payroll in 14 of their 29 seasons over that time. That’s 48.2 percent. And they have been ranked 11th in three other seasons, including the World Series championship year in 2006. To summarize, the Cardinals have been among the top 11 teams in spending for 17 of the 29 DeWitt seasons, or 58.6 percent.

Redbirds have qualified for the playoffs six times when they’re ranked between 12th and 14th in payroll. There have been six Cardinal teams – 1997, 1998, 2003, 2007, 2016 and 2018 – that failed to make the postseason despite having the advantage of a top 10 payroll listing.

That said, when the Cardinals are ready to emerge from their planned rebuild, ownership will have to sign off on a larger payroll … a payroll that would put them in right around 10th or 11th among the 30 major-league teams in payroll. I base that on their average payroll ranking – 10.3 – during their 16 postseason-bound seasons.

In the 26-man payroll accounting, the 2022 Cardinals won 93 games and a division title with the baseball’s No. 13 payroll, but slipped to the No. 15 payroll in their 91-loss season in 2023. The 2024 Cardinals were 11th in the 26-man payroll and 14th in the 40-man payroll.

I would like to see them move back up in the rankings. Not in 2025, and maybe not in 2026. But by 2027? Sure. But I strongly prefer to see the front office complete the comprehensive minor-league and player-development overhaul, establish a younger and more talented nucleus, and raise payroll after that. And revenue from the coming sportsbook enterprise should provide a boost.

New sportsbooks have come on line through ballot initiatives. In 2020 three states – Maryland, Nebraska and South Dakota – all received approval from the voters. And in Louisiana 55 of 64 parishes passed a ballot measure to legalize sportsbooks.

Currently about 65% of the U.S. population resides in a state with legal betting. That’s up by 26 percent since 2021.

The Cardinals will be trying to catch up with other MLB franchises in the sportsbook game including three of their rivals in the NL Central. The Cubs, Pirates and Reds all have sportsbook partnerships. The Blues will also join other NHL franchises in the sportsbook alignments. From what I could determine through research, as of now 14 MLB teams and 15 NHL teams have existing sportsbooks partnerships in place.

One thing I did not know about: The Missouri legal-betting measure comes with a 10% tax rate, with that money going to the state (minus promotional costs.) According to Sportico, that 10% rate is lower than the national average. Sportico reports that “a handful of states have recently raised or restructured their tax rates upward.” That will be something to monitor when the sportsbooks open in Missouri.

But soon enough, you’ll be able to wager on the probability of Nolan Gorman striking out in his next at-bat. There are many possibilities.

Thanks for reading …

–Bernie

A 2023 inductee into the Missouri Sports Hall of Fame, Bernie has provided informed opinions and perspective on St. Louis sports through his columns, radio shows and podcasts since 1985.

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Stats used in my baseball columns are sourced from FanGraphs, Baseball Reference, Statcast, StatHead, Baseball Savant, Baseball Prospectus, Brooks Baseball Net, and Sports Info Solutions unless otherwise noted.