Born On The Bayou
Rhode Island jumped the online casino queue in 2023. Could Louisiana be next year's dark horse state? And a slew of updates from Kentucky as its sports betting launch date approaches.
The Bulletin Board
NEWS: Louisiana gaming revenue drops for a sixth straight month; is online gambling the answer?
NEWS: Kentucky’s sports betting launch remains on schedule, but will the fast rollout backfire on a Gov. who has made it a central part of his reelection campaign?
BEYOND the HEADLINE: Sports betting a win for KY Gov. Andy Beshear?
VIEWS: Can ESPN Bet differentiate in an already crowded market? Some say yes, and some say no.
AROUND the WATERCOOLER: Kentucky’s need for speed exposes some glitches in the matrix.
STRAY THOUGHTS: Better every day.
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Online Casino in Louisiana?
Louisiana casino revenue has experienced a year-over-year drop for the sixth consecutive month. The dropoff in July was 6%, the second biggest decline during the six-month decline:
June: -2%
May: -2.2%
April: -8%
March: -1.4%
February: -1.9%
As Rhode Island Senate President Dominick Ruggerio confirmed, online gambling starts and ends with money. So, while Louisiana may not be on the short-list of online casino candidates, the state checks off a lot of the boxes:
Declining land-based casino revenue (24 casinos supporting 40,000 jobs)
An upcoming budget shortfall in 2025-26 (estimated near $500 million)
A familiarity with gambling and online gambling
A path forward through parish-wide voter referendums
I wouldn’t put Louisiana on the candidate list just yet, but I can see the state taking a solid look at online casinos, perhaps trying to bring it to the voters via referendum in 2025 or 2026 - I’m a firm believer in referendums being the best path forward for online casinos in the near-term.
That is precisely how mobile sports betting came to Louisiana. Lawmakers put mobile sports betting to the voters in November 2020, which was approved in most of the state’s parishes, 55 of 64. Lawmakers were then tasked with crafting enabling legislation, which they did in June 2021.
Kentucky Approves 8, Including Fanatics
Kentucky is the next big sports betting launch, and with an accelerated launch timeline, the news is coming fast and furious from the Bluegrass State.
On Tuesday, we learned the state has another applicant, Fanatics, bringing the total number of potential mobile operators up to eight. The Kentucky Horse Racing Commission also unanimously approved all eight for temporary licenses.
bet365
BetMGM
Caesars Sportsbook
Circa
DraftKings
ESPN Bet
Fanatics
FanDuel
There is still a lot of regulatory work to do, as the KHRC said the catalog of approved markets will be released sometime before September 7.
Age ain’t nothing but a number: A side story in Kentucky is the legal gambling age. The law places the legal betting age at 18+, but several earlier operators said they would still require bettors to be 21+. That appears to be changing, as DraftKings has indicated it will restrict betting to 18+, as will Churchill Downs.
It will be interesting to see how that impacts the other operator’s decisions. I took a deep dive into the 18 or 21 debate in a paid-subscriber-only post (you can sign up for a 7-day free trial to read it).
Beyond the Headline: A Win for Beshear?
As I mentioned in a previous post, Gov. Andy Beshear is making sports betting a major policy point in his reelection campaign.
Beshear ran on expanded gambling in 2019 and can leverage sports betting in two ways:
As a “promise kept” opportunity on the campaign trail
A demonstration of his ability to work with Republicans in the state legislature, who led the way on sports betting
Beshear will also have the ultimate photo op, as he plans on making the state’s first sports bet at Churchill Downs at 10 AM on September 7.
However, the rushed timeline could create some hiccups, which could lead to some finger-pointing.
As Steve Bittenbender noted, it was Beshear who sped up the launch timeline.
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Can ESPN Buck the Trend?
Thus far, sportsbook-media mashups haven’t delivered.
MaximBet, FOX Bet, Fubo, Barstool, and SI Sportsbook are either defunct or way down the sports betting food chain. But none of those brands are ESPN.
“PENN will be a winner if they leverage ESPN into something truly unique and differentiated, beyond traditional affiliate marketing activations,” Lloyd Danzig, managing partner of Smart Alpha Advisors, told SportsHandle. One scenario Danzig laid out was giving depositors early access to something like ESPN’s 2020 Michael Jordan docuseries, The Last Dance.
Like Customer Acquisition 2.0 (see yesterday’s post), ESPN Bet could move customers in either direction, offering free streaming services to sportsbook customers or a targeted campaign giving free bets to streaming subscribers.
Penn CEO Jay Snowden outlined the possibilities in the company’s recent earnings call.
“We are particularly excited about the level of integration ESPN BET will have in the broader ESPN ecosystem. With 105 million-plus monthly unique digital visitors, an audience of more than 370 million across social platforms, over 25 million ESPN+ subscribers, and the nation’s number one fantasy database, ESPN has unparalleled reach within the world of sports.”
Others are pessimistic, including Eilers & Krejcik Gaming.
As EKG’s Chris Krafcik wrote:
“Assuming i) Disney is willing to stomach the age-rating change for the ESPN app and ii) ESPN Bet becomes a standalone app that is promotionally integrated within the ESPN app, there will be a lot to get right.”
Krafcik highlighted the importance of the user journey from the ESPN app to the ESPN Bet app. For a comparison, EKG analyzed the journey from ESPN to ESPN Fantasy in its August 2023 Market Monitor. The findings, “In short, it was rough,” Krafcik said, pointing out five “discrete steps” to get to the ESPN Fantasy app registration.
Krafcik concluded:
Sure, ESPN Fantasy = / = ESPN Bet.
But if the aim is to use the ESPN app to drive acquisition for ESPN Bet, the ESPN -> ESPN Bet user journey has to be better—so much better—than the maze-like ESPN -> ESPN Fantasy user journey.
And then there was the analysis by JohnWallStreet.
In a blog breaking down the deal for both sides, he quotes David Van Egmond, the founder and CEO of Bettor Capital and former EVP of strategy at Barstool Sports and FanDuel:
“I would bet this deal gets terminated in three years for a lack of market share. It’ll be too expensive for PENN if they’re seeing the projected market share gains [or lack thereof].”
JWS also quotes Chris Grove, who looked at both sides of the possibility coin:
“But who is the customer that is not already betting, that is going to start betting because ESPN Bet exists. And who is switching from where they are currently betting because ESPN Bet exists?”
“Maybe there are people who haven’t trusted the idea of online sports betting yet, but will if it’s happening under the ESPN brand. Or maybe there are people who need that final nudge to go from interested to actually signing up for an account, and so greater exposure [on ESPN] will make a difference.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
In today’s edition of “Maybe we should slow down a little bit,” we have more from Kentucky, in the form of Steve Bittenbender’s frustrations with the KHRC:
Stray Thoughts
“You either get 1% better or 1% worse every day. There is no staying the same.”
This newsletter is a work in progress. But I promise you, my goal is to keep getting 1% better every day. I appreciate all the support I have received.