Free Fallin'
Is declining casino revenue the key indicator of a state's potential interest in legalizing online gambling?
The Bulletin Board
QUICK HITTER: Louisiana casino revenue continues to fall. Does that open the door for online gambling?
BEYOND the HEADLINE: Falling casino revenue = interest in online gambling.
LOOSE ENDS: Iowa considers lowering casino tax rate; Daly resigns as Catena CEO; MGC fines Encore
VIEWS: More on the SNL Rock Bottom Kings skit.
BEYOND the HEADLINE: The industry is letting others control the narrative.
AROUND the WATERCOOLER: Don’t trust the data (if you don’t know where the data comes from).
STRAY THOUGHTS: The right person for the wrong job.
Sponsor’s Message - Kambi Group is the leading provider of premium sports betting technology and services, empowering operators with all the tools required to deliver world-class sports betting and entertainment experiences.
The Group’s services not only include its award-winning turnkey sportsbook but also an increasingly open platform and a range of standalone sports betting services from frontend specialists Shape Games, esports data and odds provider Abios, and AI-powered trading division Tzeract. Together, we are limitless.
Visit: www.kambi.com
Quick Hitter: Don’t Sleep on Louisiana
Louisiana is in the “keep an eye on this state for online gambling” category. While I don’t expect anything in 2024, if gambling revenue continues to fall, the Bayou State could become a contender in the near future.
Louisiana gambling revenue dropped by 15.5% in January, the eleventh decline in x12 months.
As I wrote in August, Lousiana checks off a lot of the online gambling 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
Couple the declining land-based revenue with the $500 million budget shortfall in 25-26 (and an anticipated $733 million budget shortfall by FY2027-28), and Louisiana suddenly looks like a promising candidate.
Beyond the Headline: MD and IN Casino Revenue Down
Louisiana isn’t the only state experiencing declining land-based casino revenue. In his State of the Industry Address, American Gaming Association (AGA) President and CEO Bill Miller noted that while revenues are at all-time highs, not every state is sharing in the success.
Two states that have seen casino revenue dip happen to be two of the most talked about online casino candidates: Maryland and Indiana. From the AGA’s Commercial Gaming Revenue Tracker:
Notice Iowa, another online casino candidate, is also in the red.
Loose Ends: Iowa Casino Tax Rate; Daly Out at Catena; MGC Fines Encore
While other states look to squeeze every nickel out of gambling, Iowa is taking a different approach. Per the Iowa Capitol Dispatch, “HB 719 would lower the graduated tax rate for casinos’ gross revenue from slots and table games” by 3% over three years, dropping the top tax from 22% TO 19%.
Catena Media is searching for a new CEO following the resignation of Michael Daly, who had been with the company since 2018 and assumed the CEO role in 2021. Daly’s resignation comes after an abysmal 2023 for the affiliate company, which once stood head-and-shoulders above its peers in the US market.
The price of poker has gone up. The Massachusetts Gaming Commission fined Encore Boston Harbor $40,000 for accepting wagers on in-state college teams - the sportsbook’s second such offense. The MGC fined Encore Boston Harbor $10,000 for the first offense.
SPONSOR’S MESSAGE - SUBSCRIBE NOW to Zero Latency, the new podcast from Eilers & Krejcik Gaming that provides unparalleled insight into the U.S. online gambling industry through interviews with industry insiders and analysis from EKG experts.
Why the SNL Sports Betting Skit Matters
Earlier this week, I touched on the Shane Gillis Saturday Night Live sports betting skit and an interesting comment from former DraftKings-FanDuel employee Dillon Borgida, who tweeted:
“Kinda wild Shane Gillis and Keenan Thompson shed more light on sports betting addiction in 2 minutes than all of the C-level Sportsbook execs combined since 2018 this is one of the issues of avoiding the topic or handling with kid gloves outsiders are going to tell the story for you and make you look silly.”
I also spoke with SBC Americas about the sketch, which you can read here.
The skit was, at its core, funny. It also has several grains of truth, particularly the shift in tone when the SNL team shifted to responsible gambling messaging, which is what made it even funnier and memorable. Memorable seems to get recycled as a jumping-off or talking point, as evidenced below.
Kent Swanson, the Executive Vice President at Riverside Investment & Development Company, said on LinkedIn:
“Last night SNL spoofed online gambling. However, like with all good satire, there is much truth in the humor. [The] government is now a sponsor of gambling, an easy-to-enact tax that enables recreation for some but is highly destructive for an unfortunate minority. Economic studies of gambling's externalities and the social cost are limited. We need to do a deep dive into this matter with the massive increase in gambling, particularly on mobile apps.”
Vena Shexnayder, the Executive Director of the Arkansas Problem Gambling Council, also mentioned the sketch on LinkedIn, saying, “As someone who pivoted to the mental health practice niche of education and treatment for problem gambling, I received calls and messages about this sketch. While some comedy sketches may fall flat, this one hits home on the need for more resources for responsible gambling and financial literacy in the US.”
Basically, the difference between good and great satire is often its proximity to the truth. A lousy sketch would have been a nothing burger, but a good sketch is memorable.
Still, we need to step outside the sports betting bubble. Rock Bottom Kings is the least viewed video on the SNL YouTube channel, coming in at 1.1 million views - Gillis’s monologue has 3.3 million views.
Beyond the Headline: Controlling The Narrative
The SNL skit is the latest example of the industry letting the press, social media, comedians, and commentators control the narrative.
Whether it’s coverage by the New York Times, Wall Street Journal, 60 Minutes, or ESPN, the industry is letting a narrative develop and then pushing back against it.
That’s a bad strategy. There’s a saying in self-defense circles: whoever starts it usually finishes it.
RG consultant Jamie Salsburg pointed out another reason the industry is losing the debate, noting that even when it tries to take control of the responsible gambling narrative, it runs into an authenticity problem.
Around the Watercooler
Social media conversations, rumors, and gossip.
Dustin Gouker, who will go down in history as the first episode of the Talking Shop Podcast (released on Wednesday for my paid subscribers and available to everyone on Saturday), did a masterful job of pushing back against some bunk data about the size of the illegal betting market.
As Gouker wrote in his The Closing Line newsletter:
… That research claims that $5.4 billion was bet on the big game and that only $1.4 billion was bet legally…
Anyone trying to capture how much money is wagered offshore is doing a lot of guessing…
If I am wrong and you think this number is correct, then this should be a much bigger deal for policymakers, etc…
The more significant issue is the dissemination of “research” and academic papers that are little more than loosely strung together bits of questionable evidence (packaged in a pretty wrapper) that fit a narrative.
Everyone should be more skeptical of research, academic papers, and surveys.
Stray Thoughts
You need the right person for the right job. The ages at our martial arts school range from 4 to 70-something. My wife teaches the “Little Ninjas” (4-6 year olds) and the young beginners (6-8 year olds). I deal with the 9-12 year olds and the teenagers. It’s not a division of duties; it’s where we are the best fit. Either of us could do the other’s job (and we sometimes do), but the business would be less successful. We know other schools where the sole owner/instructor deals with all age ranges (sometimes in a single class, something that blows my mind), which is a challenging situation for anyone.
I told you that to tell you this: Michael Daly’s resignation as Catena CEO has little to do with Michael. I worked with Michael and got to know him a bit during my time at Catena a half-decade ago, and I have nothing but good things to say about him, both professionally and as a person. Without getting into why, the truth is that it didn’t matter who was at the helm. Catena had an Avengers End Game 1-in-14 million chance of passing through unscathed.