Know When To Fold 'Em
This is not the way. Supporters of the new California sports betting initiatives look to court support of non-gaming tribes with amended proposal.
The Bulletin Board
NEWS: Revamped California sports betting initiatives are still DOA.
NEWS: Prime Sports is climbing the charts in Ohio.
LOOSE ENDS: Smoke-free AC casinos on hold; Maine sports betting; New York and Seneca Tribe compact extension; Fanatics and ESPN Bet tidbits
VIEWS: Australia bans credit cards for online gambling. Is a US ban coming?
AROUND the WATERCOOLER: Who’s Right About ESPN Bet?
STRAY THOUGHTS: But how much did you lose?
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Amended CA Sports Betting Initiatives Still on Shaky Ground
The supporters of the California sports betting initiatives are giving off pre-serum Captain America vibes; they just don’t know when to quit.
As reported by Matthew Kredell, the initiative supporters made several changes to the proposal. The group now believes “we’ve got a bill that works for every stakeholder, every out-of-state operator, every land-based casino, and a majority of the tribes right now.”
The most significant change is upping the payment to non-gaming tribes, who currently receive a stipend from gaming tribes. As Kredell writes, “The 72 RSTF tribes currently receive $1.1 million annually, the same amount they have received since Class III gaming began in the state more than 20 years ago.”
Victor Rocha tweeted this was a “dead initiative walking” and said, “The strategy is to drive a wedge between the gaming & non-gaming tribes. At the end of the day, it’s still a bunch of tech bros promising to lead Native Americans to the promised land. It will fail like before. Unity is our strength.”
Last year’s mobile effort by DraftKings and FanDuel also sought to bring non-gaming tribes into its support circle.
That seemingly accomplishes two things:
It allows commercial operators to claim tribal support.
In effect, outside operators see non-gaming tribes (typically small tribes located in far-flung areas of the state where a land-based casino is impractical) as willing (and likely subordinate) partners for online gambling operations.
What it actually accomplishes is ensuring the measure is DOA, with tribes writing it and its supporters off as not serious.
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Prime Sports Is Rising in Ohio
A company I’ve been keeping an eye on (previous coverage here and here) is Prime Sports.
Last month, Prime Sports co-founder Joe Brennan Jr. tweeted, “Take a good look, last time we hold up the bottom on monthly numbers.” And he was right.
After finishing September in last place (its first month in the Ohio market), Prime Sports jumped to thirteenth out of 21 mobile sportsbooks in October, per the Ohio Casino Control Commission’s October revenue report.
The book’s handle came in at $2.3 million for the month, with revenue of $66,153, for a hold rate of just under 3%. And for the second month, Prime gave out zero promotional dollars and is the only sportsbook in the market that can make that claim.
This is where it’s important to point out that Prime prides itself on being a low-margin book where customers will find the best lines rather than gimmicky promotions.
These are solid numbers for Prime, which is trying to carve out a space in the US for a bettor-friendly sportsbook. That said, its handle gives the upstart a .3% market share, so it still has a long way to go to reach proof of concept.
FanDuel and DraftKings lead the way in Ohio, with both operators reporting a betting handle of $258 million in October, 100 times what Prime generated.
Loose Ends: Smoke-Free AC; Maine Rev. Numbers; Seneca Compact Update
The dream of smoke-free Atlantic City casinos hit a snag last week when a vote on the measure was delayed due to a lack of votes. More frustrating for supporters, the AP reports, “They also said they would listen to alternatives proposed by the casino industry, including enclosed smoking rooms in which no employee would be forced to work.”
Maine sports bettors placed $36 million in wagers in the four weeks (27 days) since the industry launched. That has resulted in nearly $500k in tax revenue to the state ($480,193.01).
The Seneca Nation and the state of New York have agreed to extend the current compact until March 31 - the compact was set to expire on December 9. Hopefully, that gives the two sides time to reach a longer, more permanent agreement.
Fanatics is live in Colorado after completing its migration from PointsBet, and ESPN Bet has secured North Carolina market access through a deal with Quail Hollow Club.
Australia on the Verge of Prohibiting Credit Card Online Gambling Transactions
Australia’s House of Representatives and Senate have passed the Interactive Gambling Amendment (Credit and Other Measures) Bill.
Amends the Interactive Gambling Act 2001 to: prohibit the use of credit cards, credit-related products and digital currency as payment methods for interactive wagering services; expand the Australian Communications and Media Authority’s compliance and enforcement powers; and make consequential amendments and remove spent provisions.
Of note:
The legislation would put in place a blanket ban on credit card gambling - Australia already has a credit card ban at land-based venues - which is an estimated 20% of transactions.
The prohibition has a six-month lead time to allow operators and payment processors to adjust to the changes.
It also exempts lotteries and keno.
Why am I relaying an Australian story? When it comes to responsible gambling measures, the US is on a five to ten-year delay with the rest of the world. There are some credit card gambling restrictions in the US (Massachusetts, Iowa, New York, Tennessee, and Connecticut), but based on the current trajectory, a total ban is likely a matter of when, not if.
Around the Watercooler
Social media conversations, rumors, and gossip.
How is ESPN Bet doing? That depends on who you ask.
Dustin Gouker still isn’t sold:
“And I am not here to tell you it’s not a success! Just that there’s a ton of noise in this data, especially vis a vis other sports betting app downloads,” Gouker wrote in his Closing Line newsletter. As Gouker rightly points out, given the manner of launch, the big story would have been if the app hadn’t been heavily downloaded.
Stray Thoughts
The industry is really good at selling the economic benefits of gambling, like tax revenue and jobs, but it’s done a very poor job communicating the possibility of winning and variance. My guess is that it is out of fear of being criticized for trying to convince people they will win.
Instead, it has focused on the “gambling is entertainment” mantra. I’ve been preaching that for quite some time, but my view is starting to change as I don’t think “entertainment” is precise enough, as I said on a recent episode of the Gamble On podcast.
Rather than entertainment, gambling should be an “experience.”
The industry has embraced responsible messaging, “Don’t bet more than you can afford to lose.” “Play within your means.” “Set limits.” And a host of other cliches. All of which are overly somber and imply you will lose.
Outside of Eddie Mush, this overlooks every gambler’s real-world experience, which is a mix of wins and losses. For that reason, many people tune out or ignore RG messaging.
In the long run, you will lose. As Daniel Ocean put it, “Play long enough; you never change the stakes; the house takes you.”
But few people will ever reach the long run. Casinos rely on small edges and variance to mask and dull the losses. There isn’t some magic game with a 99.9% house edge that people can wager whatever money they have left in their pocket on their way out of the casino.
As I recently said on X in a conversation about recreational sports bettors:
This is another misconception: They don't always lose. They will go on heaters, blame losing streaks on bad luck, and at the end of the day, someone betting $100/week is losing $10/week. They won't even notice, and many will think they are winning bettors. Reason = Variance.
That $10/week is from a house edge of 10%. Drop that to 7.7% for triple-zero roulette (5.26% for those who can find a double-zero table), 4% for typical online slots, or .5% for perfect-strategy blackjack, and the losses continue diminishing.
Now add rewards, free drinks, and whatever else a player might receive, and you start to understand why losses don’t always register with bettors. You also begin to understand how gambling is a mix of positive, neutral, and negative experiences.
Over 20 visits, someone bringing $300 to gamble might have results that look something like this:
+$150
-$250
-$50
+$500
-$200
-$300
+$50
+$150
+$800
-$250
-$300
+$50
-$250
-$250
+$200
-$200
-$150
+$100
+$100
-$300
How did this person do? They lost $400 total (if my in-the-head math is correct). The chances they can recognize that without careful record-keeping are slim.