You Can't Make Everyone Happy

Two new draft regulations have been unveiled by the California Bureau of Gambling Control. One was praised by tribes and derided by cardrooms. The other was praised by cardrooms and derided by tribes.

Sep 26, 2023

NEWS: CA tribes applaud a draft regulation banning blackjack at cardrooms while criticizing one loosening dealer restrictions on player-banked games.
NEWS: Outgoing BetFred US CEO talks about the struggles of being a smaller operator in the US and some of the lessons learned.
NEWS: Ontario operators express uncertainty about what is and isn’t allowed in the new AGCO advertising rules.
NEWS: A quick update on Florida sports betting.
VIEWS: [Michael Buffer voice] Let’s get ready to… Showroom floor and conference! G2E is just two weeks away.
AROUND the WATERCOOLER: A fourthhand account of Elon the poker player.
STRAY THOUGHTS: The bestest gambling podcast has a Substack.

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CA Draft Regulations Help And Hurt Both Sides

The California Bureau of Gambling Control has proposed two new regulations concerning non-poker games offered at commercial cardrooms.

The proposals please no one, as one new regulation would be a favor to the tribes and the other a favor to cardrooms. One proposal bans blackjack, and the other lengthens the time a single player can deal at a table from two hands (which is not enforced) to 40 minutes.

Both rule changes are in the draft stage, with a public comment period running through October 26.

“It’s [a] dramatic change,” Kyle Kirkland, the president of the California Gaming Association, told Play USA in regards to the proposed blackjack ban. “We’re carefully researching the legal process and economic implications, and in turn, our response options.”

“We’re pleased that the second attorney general in a row has put forward regulations intended to bring these unlawful banked games into compliance,” Jacob Mejia, vice president of public affairs for Pechanga, told PlayUSA. “The blackjack prohibition is notable, though it should have also addressed other games.”

The other games Melia references are Baccarat and other traditionally house-banked card games that are offered at California cardrooms via a rotating player-banked deal (you can read a near-decade-old explainer of player-banked games in California here).

And it’s the rotating player-banked deal that has always been the tribes’ prime complaint - a recent Capitol Weekly column offers a good explanation of how the current situation came to be, and a near-decade-old explainer of player-banked games in California can be found here.

Interestingly, while the BGC is taking away blackjack, it is loosening the current regulations on player-banked deals. The previous regulations called for the deal to change every two hands. The new proposed regulation lengthens that to every 40 minutes.

Even if the proposed regulations are adopted, cardrooms currently offering blackjack would have a one-year grace period, and as Viejas Band of Kumeyaay Indians Attorney General Tuari Bigknife told Play USA, the legal process will likely play out over many years. “In short, we could be here 5-7 years later in the same position,” Bigknife said.

Is There Room For a Tier 2 Sportsbook in the US?

So you’re saying there is a chance.

On the latest episode of Eilers & Krejcik’s excellent Zero Latency podcast, Bradley Allen spoke with outgoing BetFred US CEO Bryan Bennett about the opportunities in the US market for “Tier 2” operators.

The gist of Bennett’s comments was a scalpel approach - a common strategy among Tier 2 operators - where choosing markets wisely and making sure you’re getting a proper return on your investments is paramount. Bennett singled out the company’s two deals with the Colorado Rockies and Denver Broncos, and the difficulties tying up that amount of marketing spend creates.

“At the time, we thought we needed those big sports brands to build street cred in Colorado because no one had heard of BetFred in Colorado. Retrospectively, did we need two? Definitely not. Did we even need one? I’m not sure.
“If we knew then what we know now, we probably wouldn’t have signed those deals.”

Another interesting point Bennett made was the value placed on being a first-mover, which he doesn’t necessarily believe is a good place to be for a smaller operator.

“We put too much pressure to be first-to-market,” Bennett said. “In fact, for a smaller operator, it makes sense not to be in that first wave as you get absolutely steamrolled by the marketing.”

As Bennett put it, it makes more sense to come in after the initial marketing bombardment when the big names are giving away the house and enter the market when your voice can be heard.

It’s an interesting conversation with someone who was on the ground as a Tier 2 operator in the US, and it’s less than 20 minutes long, so definitely give it a listen.

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Canadian Online Gambling Operators Just want Clarity

In a podcast appearance with Gaming News Canada, Canadian Gaming Association president and CEO Paul Burns reiterated the industry’s concerns regarding the new advertising standards from the Alcohol and Gaming Commission of Ontario (AGCO).

Compliance is the industry’s objective, but vague language has operators idling, wondering precisely what is and isn’t allowed (which I previously discussed here).

As Burns told Gaming News Canada, the CGA offered to participate in the conversation to understand “What the difference will be between a celebrity and a retired athlete? Or what metrics will be used to determine what appeals to minors? What will they use to decide those things, or what will they like the industry to use? Because everyone just wants to comply. That’s the objective at the end of the day.”

“There’s a lot of questions,” Burns said.

Burns also noted that similar uncertainty around bonusing and promotions led to a “trial and error” approach.

“A lot of people who decided they were gaming experts and advertising experts and problem gambling experts all of a sudden feel free to comment” without fully understanding the standards the industry already has in place, Burns said earlier in the podcast, which sums up something I have commented on in the past.

“Another related issue is the lack of experience means they often pin their understanding on the testimony of a trusted source or sources - who may or may not have biases or a personal agenda. That trust bubble can be hard to penetrate, which means one side of a complex issue gets a lot more credence than the other. So, the fear of playing favorites with industry stakeholders comes to fruition.”

DOI Responds in FL Sports Betting Case

Florida sports betting is anywhere from a week to many years away from becoming a reality.

The latest news saw the Department of Interior respond to West Flagler’s motion to stay while it appeals to the Supreme Court - West Flagler has until October 11 to file with SCOTUS.

In the interim, West Flagler now has until October 2 to respond to the DOI response, after which the DC Court of Appeals can make a determination to grant or deny West Flagler’s motion to stay.

You can read Dorson’s full write-up here.

G2E, Why You Should Get Your A There**

Global Gaming Expo, better known as G2E, is just a couple of weeks away. Every year (with the exception of COVID-plagued 2020), the gambling world assembles in Las Vegas for the greatest spectacle in gambling (ICE may have something to say about that).

With that in mind, here are a couple of columns I’ve written over the years that will give you a taste of G2E, as well as some valuable tips to navigate the carnival-like atmosphere seamlessly.

A primer for maximizing your G2E experience. For those of you looking for a Cliff’s Notes version of the column:

Plan your time accordingly. “With 20,000-plus attendees and all the major players in attendance, time is precious. Getting 15 minutes of someone’s time is a big ask, and on-the-spot requests are nearly never granted at G2E.”
Tuesday And Wednesday Are Different. “When you try to preschedule meetings, you’ll notice people are very busy Tuesday and Wednesday, and quite a few aren’t in town on the far-less hectic days of Monday and Thursday.” But also keep in mind that Vegas catches up to people by Thursday.
Take notes. “Even if you’re fully engrossed in the panel discussion, the moment you exit the room, your mind will jump to what is next, and you’ll quickly forget some of the specifics of the session.”
The Little Booth With A Big Idea. “Don’t get distracted by million-dollar booths and blinking lights. There are a lot of uncut gems at G2E.”

An in-depth look at my G2E 2019 experience, with my observations from three days of G2E - it’s always fun to revisit these to see what I got right and what I got wrong, and they date back to my first G2E in 2014 if you want to go in search of others.

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Around the Watercooler

Social media conversations, rumors, and gossip.

Elon’s interesting poker strategy.

You’re reading this on my Substack via Dustin Gouker, quoting from Dave Karpf’s substack, quoting from Walter Isaacson’s biography of Musk. I think that makes sense.

Stray Thoughts

I was a guest on the Gambling Files podcast on Monday (not sure when it will be released) and wanted to let all of my readers know they (Jon Bruford and Fintan Costello) launched a substack, and you should definitely subscribe.