Don't Believe The Hype
I'm extremely pessimistic about online casino and sports betting legalization efforts next year. Here's hoping I'm wrong.
The Bulletin Board
NEWS: Multiple states will look closely at legalizing online casinos and poker in 2024. Depending on who you ask, the chance of a bill passing varies.
NEWS: Arizona and Mississippi are the latest states to take aim at Pick ‘Em fantasy sports contests.
BEYOND the HEADLINE: Arizona regulators have some explaining to do.
NEWS: The AGA heaps praise on online casino results; calls the 10th Anniversary of legal iCasino an industry milestone.
VIEWS: Texas casinos are a long shot despite a high-powered partnership.
AROUND the WATERCOOLER: A new approach to RG that allows regulators and operators to do what they do best. And Happy 25th Birthday to Pechanga.net.
STRAY THOUGHTS: Making mistakes on purpose.
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The Case For and Against iCasino Legalization in 2024
Mega-conferences like G2E can provide an excellent temperature check on various parts of the industry. They can also give voice to industry televangelists, pumping up the audience with proclamations they know will excite the crowd.
According to Eilers & Krejcik Gaming’s EKG Line newsletter, “G2E was abuzz with optimism for online casino legalization in 2024,” including in two states, Illinois and New York, that EKG is “decidedly bearish” on.
Illinois explored online casino and poker legalization in 2023. The bills, HB 2239 and SB 1656, will carry over to 2024. Standing in the state’s way is a thriving VGT industry, which, as a form of convenience gambling, (rightly) fears cannibalization from online gambling.
For those of you who arrived in 2016 during the daily fantasy sports drama or in 2018 with the repeal of PASPA, New York likely seems like a great candidate to legalize online casino gambling and poker. After all, the Empire State passed DFS and mobile sports betting legislation in relatively short order.
As is the case in Illinois, multiple bills from 2023 will carry over to 2024, and State Sen. Joseph Addabbo has indicated he will file a new bill before the end of 2023.
For those of us who’ve been around a little longer, New York (and California) fall into the Lucy with the football category.
Fool me once; shame on you. Fool me ten years in a row; shame on me. So forgive me if I don’t buy any “positive” movement on the New York online gambling front.
Returning to the optimistic statements you hear at conferences, New York lawmakers have been singing that song for a decade. Online poker bills have sailed through the Senate many times. The Assembly is another matter. And the man who is the gatekeeper in the Assembly, Assemblyman Gary Pretlow, has held almost every position imaginable on the issue.
And as Chris Grove put it in an October 19 tweet, “I would be thrilled professionally if NY passed online casino. But I think we have not even begun to see the opposition that will emerge if online casino is seriously in play.”
Click here to read my current thoughts on the 2024 online casino and poker candidates. And here for my mobile sports betting candidates.
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Two More States Cast a Critical Eye on DFS Contests
Add Arizona and Mississippi to the list of states looking into the legality of DFS Pick ‘Em games. That brings the number of states that are reexamining these contests in the past few months up to ten.
As reported by SBC Americas, “The Mississippi Gaming Commission confirmed Executive Director Jay McDaniel sent a letter to all fantasy operators in the state clarifying the rules.” At issue are two points: the legality of player vs. the house DFS games and using a single athlete’s stats to determine a winner.
SBC Americas also confirmed the Arizona Department of Gaming “sent a guidance letter to all licensed fantasy operators in the state on Nov. 1 that reads in part the department “has become aware that certain fantasy sports contest operators in Arizona are offering wager types they call “flexible fantasy contests” or “pick ‘em fantasy” (referred to as the “disputed wagers”).”
Arizona focused on the player vs. the house angle, writing, “The disputed wagers are not fantasy sports contests because a key piece of a fantasy sports contest is that participants create teams and compete against one another in simulated games.”
Beyond the Headline: The Plot Thickens in AZ
SBC Americas says it received an email communication between Underdog (a newsletter sponsor) and a former ADG employee that shows Underdog submitted and received express approval for its Rivals and Pick’em products in 2022. That flies in the face of the Arizona Department of Gaming’s statement that it “has become aware that certain fantasy sports contest operators…”
The existence of that communication means one of two things:
Regulators approved the games without performing due diligence.
Regulators are arbitrarily changing the rules on companies that have invested time and money in the state.
Neither of these reasons is a good look.
This is the latest incident in what is becoming an increasingly strained relationship within the fantasy sports community. On one side are DraftKings and FanDuel, and on the other are the DFS 2.0 operators, PrizePicks, Underdog, and Sleeper.
The DFS 2.0 side points the finger at FanDuel and DraftKings, calling their behavior anti-competitive. As I previously reported:
“Product innovation has surpassed what are now antiquated views on what fantasy is and isn’t – views primarily pushed by large sportsbook casinos,” [PrizePicks CEO Adam] Wexler said.
Underdog CEO Jeremy Levine tweeted in response, “FanDuel and DraftKings don’t want to compete on product. Instead, they’re working the political backrooms to try to limit competition and options for customers. And then they stand up on a stage at G2E and try to mislead our entire industry.”
But as Dustin Gouker has said, DraftKings and FanDuel pointing regulators toward these games is putting their thumb on the scale, but it is allowed to be there.
If the reporting on Arizona is the whole story and 100% accurate, it’s the regulators that have a lot of questions to answer. Why were these games okay in 2022 but not okay now? And why are states clarifying their DFS language in the same direction?
A Slow Thaw: The AGA and Online Gambling
Coming back to online casino and poker legalization… When it comes to online gambling, the American Gaming Association is starting to sing a different tune.
The AGA has been reporting online revenues for quite some time in its commercial gaming revenue tracker reports, but its endorsement of the vertical is still less than 100%.
The AGA has yet to come out in favor of online gambling legalization after taking a “no-position” stance on it way back in 2014, following pressure from Sheldon Adelson and Las Vegas Sands.
As I wrote last year, “The group’s official position was “no position,” but it didn’t just ignore online casino debates. Much like Voldemort, the AGA avoided mentioning online casinos altogether, almost pretending it didn’t exist.”
The AGA provided me with the following response when I inquired about the AGA’s current stance on legalizing online casino gambling last year.
“Like any form of casino gaming, it’s up to each state to decide what’s right for their citizens. Our new research shows that Americans are engaging with iGaming regardless of its legal status. With this new information, policymakers should consider whether legalization is part of the solution to protect consumers while generating tax revenue.”
I’ve said the AGA was slowly thawing to online casinos-poker, and the latest trumpeting of online gambling on social media is a pretty clear signal that the ice has all but melted away.
Texas Casinos are Still a Long Way Off
Mark Cuban has been a vocal supporter of legalizing casino gambling in Texas.
Exhibit A: in May, Cuban told Legal Sports Report that sports betting is less interesting than resort casinos.
Per Texas Metro News, Cuban reiterated his previous comments:
“When you think of all the places you want to save up to vacation, Texas isn’t one of them. There’s no real destination that you save up for. That’s a problem, and I think resort gaming would have a huge impact.
“My goal, and we’d partner with Las Vegas Sands, is when we build a new arena, it’ll be in the middle of a resort and casino. That’s the mission.”
The part that sticks out like a sore thumb is the partnership with Las Vegas Sands, which has been lobbying heavily for several years to bring resort casinos to Texas.
Despite LVS and Cuban joining forces, legislation to permit resort casinos failed to gain enough support this year.
When Cuban and LVS can’t get a bill across the finish line, you know it’s a tough lift, and the dream of Texas casinos could be a decade or more in the making.
As LSR reported in May, “Rep. Charlie Geren last week postponed consideration of his resort and casino legislation until Jan. 12, 2027, after it did not receive enough votes to pass through the House.”
Add that legislative target to the typical timeframe to approve and build a multi-billion-dollar casino, and Cuban’s plans might not come to fruition until the 2030s, if at all.
Around the Watercooler
Social media conversations, rumors, and gossip.
Some interesting RG ideas from Kim Lund (a great follow btw), who, in these tweets, advocates for a principles-based approach.
This aligns with my own thoughts on the subject, considering most of the recent policy wins are agreeable to everyone. But, an effective policy, a policy with teeth, should make the industry uncomfortable. It should create a new friction point and leverage what each side does best.
When it comes to RG, I believe regulators, the industry, and advocates shouldn’t be on the same page.
25 years of Pechanga.net! And give Victor a follow on X for the most no-nonsense takes in the industry.
Stray Thoughts
When people first begin learning a skill, they will often hear something along the lines of, “A mistake is only a mistake if you don’t learn from it.” This is terrific advice, as the person can reflect on what they did and why there was a better option.
This is a terrific way to learn poker, for example. Learn from and eliminate mistakes.
As you become more expert at something and fewer and fewer mistakes are made, that advice needs a disclaimer.
Using poker as the example again, as someone moves up past the low-stakes games, they’ll often discover that even though they are doing everything right, they’re still not winning. More aggravating, people who appear to be making mistakes are winning.
Here’s why (shifting over to a martial arts example for a moment).
“Advanced striking is just beginner striking mistakes done on purpose.” This is something the Hard2Hurt YouTube channel says quite often, and it’s very accurate for anything strategy-based.
As a beginner, the goal is to eliminate mistakes and build a solid foundation. An expert can break the rules if they are breaking them on purpose.
In poker, this would be akin to exploitative play. In most activities, we call it unorthodox play. When it works, the expert looks like a superhuman. When it fails, not so much. Interestingly, we intuitively understand that if a beginner does something unorthodox, even if it succeeds, it’s by accident.