Wind Of Change
There is change at every level of the gambling industry. In DE, RSI has taken over from 888. In NJ, the DGE Director is stepping down after 13 years. In NC, Underdog is going from DFS to Sports.
The Bulletin Board
NEWS: Switching from 888 to RSI increases Delaware’s online casino revenue three-fold.
WEEKEND CATCHUP: David Rebuck retires from DGE; Rhode Island online casino soft launch; Alabama gambling bill on thin ice; STTP Podcast Ep. 1
NEWS: Underdog among eight operators issued North Carolina mobile sports betting licenses leading up to the March 11 launch.
VIEWS: No, Detroit Free Press, online gambling isn’t why Michigan’s land-based casino revenue dipped in 2023.
QUICK HITTER: Entain is ready to part ways with PartyPoker.
AROUND the WATERCOOLER: Retiring DGE Director Rebuck praised from every corner of the industry.
STRAY THOUGHTS: I vouched for the wrong guy.
SPONSOR’S MESSAGE - Sporttrade was borne out of the belief that the golden age of sports betting has yet to come. Combining proprietary technology, thoughtful design, and capital markets expertise, our platform endeavors to modernize sports betting for a more equitable, responsible, and accessible future.
Learn more about what makes Sporttrade an unparalleled player experience here.
Switch to RSI Lifts Delaware Online Gambling
Delaware is the forgotten online gambling market. Since its 2013 launch, the state has struggled to produce anything close to other online casino states’ numbers. In its 10-year history, Delaware barely creeps over $1 million in monthly revenue and has never surpassed $1.5 million. For comparison, New Jersey tallied $180 million in January.
But Delaware’s fortunes could be turning around. Following its switch from longtime platform partner 888 to Rush Street Interactive, online casino revenue has more than tripled to over $3.4 million (h/t to Bonus.com).
You could point to RSI being the better product and having a more extensive selection of games. Still, the real change (in my view) is RSI bringing mobile sports betting to Delaware, allowing RSI to cross-sell its online casino games to Delaware sports bettors.
With the launch of mobile sports betting apps in Delaware total handle doubled year-over-year to $17 million.
What will be interesting to watch is if Delaware’s January numbers are a correction or the beginning (despite being a 10-year-old market) and will continue to see revenues rise for several months or even years - there’s a lot of room for growth.
Before the RSI shift, Delaware’s online casino revenue per adult was around $20 annually.
How much of an outlier is that? New Jersey is nearly $300, Michigan around $250, and even West Virginia, the lowest revenue producer not named Delaware, is over $100 per adult.
As the EKG Line newsletter reported, “Year-on-year growth was 222%, with revenues climbing from $1.2mm to $3.8mm, despite the loss of poker. On a per-adult basis, however, DE is still one-third as valuable as the next least valuable U.S. online casino market, West Virginia, suggesting plenty of ceiling for further growth in DE.”
With 1 million residents (about 750,000 adults), Delaware could go from $1 million months to $6 million months if it can match West Virginia’s output. That goal seems achievable, considering Delaware went from $1.1 million to $3.4 million in its first month under RSI.
Weekend Catchup: Rebuck Retires; RI Online Casino; Alabama Gambling Hits Speedbump; Episode 1
Director Rebuck Retires: After 13 years at the helm of the New Jersey Division of Gaming Enforcement, David Rebuck is calling it a day. I’ve had the pleasure of speaking with Director Rebuck many times and know him to be thoughtful, prudent, and sincere. His retirement will leave a gaping hole in the space. DGE Deputy Director Mary Jo Flaherty will assume the role of Interim Director. (More on David Rebuck’s retirement in the Around the Watercooler section below).
RI Online Casino: With little fanfare, Rhode Island online casino games went live on Friday. The online games are currently in a soft launch phase, with slots available 24 hours per day, but live dealer table games running for just seven hours per day. The soft launch phase will conclude on March 5.
Alabama Gambling Expansion: During an Alabama hearing on a comprehensive gambling expansion package, things got heated. Despite passing the House with ease, the package, which includes mobile sports betting, has run into a brick wall in the Senate.
ICYMI: The first episode of the Talking Shop podcast was released last week (Wednesday for paid subscribers and Saturday for all subscribers). My first guest was Dustin Gouker, the former Vice President of North America for Catena Media, author of The Closing Line newsletter, and current thorn in the side of DFS operators.
Underdog and 7 Others Approved to Launch in NC
Next Monday is Day One of North Carolina’s mobile sports betting era. Eight operators received sports betting licenses from the North Carolina Lottery Commission on Thursday:
Bet365 partnered with the Charlotte Hornets.
BetMGM partnered with Charlotte Motor Speedway.
DraftKings partnered with NASCAR.
ESPN Bet partnered with Quail Hollow Club (a PGA tour venue).
Fanatics partnered with the Carolina Hurricanes.
FanDuel partnered with the PGA Tour.
Underdog partnered with Sedgefield Country Club (a PGA tour venue).
Caesars partnered with the Eastern Band of Cherokee Indians.
The operators will be part of a synchronized launch on March 11. With licenses in hand, they began pre-registering customers on March 1 - Caesars is already accepting mobile bets on tribal lands.
The intriguing entry on the list is Underdog (a newsletter sponsor). North Carolina will be the fantasy sports company’s first foray into sports betting, and people are very interested in what its product will look like.
As Underdog CEO and founder Jeremy Levine said on Twitter, “North Carolina, we’re coming. So excited to be launching Underdog Fantasy’s take on sports betting in NC on March 11th.”
Why the excitement? As Chris Grove (an Underdog investor) said during an appearance on the Lawyers, Lines and Money Podcast, “PrizePicks, Underdog, Betr, etc represent a compelling threat to one of the core competitive advantages of DraftKings and FanDuel.”
Grove went on to say that the end game for these companies differs, with Underdog “wanting to make engaging games that allow people to mix play, prediction, and prizes,” regardless of what umbrella (DFS, sports betting, or other) that falls under.
Even critics of DFS 2.0 are curious to see what Underdog will bring to the table. “As much crap as I sling at the fantasy vs. the house industry, I am legitimately interested to see how Underdog does a sportsbook,” Dustin Gouker tweeted. “So much room to improve US sportsbook UX.”
North Carolina is also the only significant sports betting launch of 2024 (and the first since Massachusetts in March 2023), which means operators and affiliates are banking on North Carolina to boost 2024 numbers.
SPONSOR’S MESSAGE - Underdog: the most innovative company in sports gaming.
At Underdog we use our own tech stack to create the industry’s most popular games, designing products specifically for the American sports fan.
Join us as we build the future of sports gaming.
Visit: https://underdogfantasy.com/careers
Correlation =/= Causation
A rather typical article on the AGA’s 2023 commercial gaming revenue numbers that appeared in the Detroit Free Press focused on Michigan being the largest online gambling market in the US.
So why am I reporting on a “typical” article? Because the article goes sideways when it takes the (il)logical leap and chalks up declining land-based revenue to online gambling:
“As can be expected, with the large increase in online gambling, physical casinos in Michigan have taken a hit in the last year. In 2023, Michigan had the fourth largest decrease in traditional casino gross gaming revenue with a -2.7% decline.”
As can be expected, I have some questions about this hastily drawn conclusion, and it doesn’t take much effort to poke a bunch of holes in it.
First, the three states with more significant declines, Indiana, Maryland, and Mississippi, do not offer online casino games.
Second, suppose it was an online casino thing. How do you explain that three online casino states with land-based commercial casinos, New Jersey, Pennsylvania, and Delaware, saw land-based revenues increase? West Virginia saw a slight decline, and Connecticut’s land-based casinos are tribal-run and not included in the AGA’s data.
And finally, like most data points, context is critical. Case in point, there was a 47-day workers’ strike at Michigan’s three commercial casinos (the decline reported by the Free Press doesn’t include tribal casino revenues in Michigan, which also offer online gambling and didn’t experience revenue declines in 2023).
Quick Hitter: Entain(ing) Offers for PartyPoker
Per our friends over at the Earnings+More Substack, “Entain is seeking buyers for its PartyPoker business, which is now deemed to be non-core, according to multiple sources.”
The once dominant poker room was hard hit by UIGEA in 2006, when, unlike PokerStars, it left the US market but remained a major player in the global market.
Party had a bit of a resurgence a decade later when it tried to capitalize on PokerStars’ decision to scrap its Supernova Elite rewards program. The company made some inroads, but ultimately, the experiment came to an end.
As E+M notes, PartyPoker is no longer in the Top 10 poker sites, with PokerScout.com listing the site as having a 7-day average of 600 cash game players.
Around the Watercooler
Social media conversations, rumors, and gossip.
More from around social media on David Rebuck’s retirement.
John Pappas (Consultant): “To say that David Rebuck was a visionary regulator would certainly be an understatement. Under his leadership, he stabilized the Atlantic City casino industry while at the same time turning New Jersey into the regulatory “gold standard” for online gaming -- not just in the US, but as a model of excellence globally.”
Ronnie Jones (Regultor): “When appointed as Chairman in 2013, I would have been lost in the woods had it not been for Dave. His mentorship, his counsel, and his friendship have been invaluable. His retirement is well-earned, but his impact will last for years. To his credit, he has a solid staff who will continue to set a standard for all other regulatory bodies. Godspeed, Dave.”
Gene Johnson (Analyst & Consultant): “Without a doubt, the best regulator in the US. Dave’s had an incredible career successfully birthing iGaming and sports betting in a state jurisdiction which became a model for all. Hope his successor will be half as good.”
John Brennan (Journalist): “Might be the most important regulator in the US over the past 20 years. Rebuck provided a blueprint for gambling rules for the many states that followed NJ’s lead.”
Shawn Fluharty (WV lawmaker and NCLGS President): “Dave Rebuck’s impact on gaming is immeasurable. The G.O.A.T. Honored to know him. He will be known for NJ, but his success is nationwide.”
John Mehaffey (Journalist): “Before covering Las Vegas, my beat was the legalization of online poker/casinos. I interviewed David Rebuck during that era. He has deep gaming knowledge. His office was always helpful. I don’t think the industry gets where it is now without him leading the way.”
Captain Jack Andrews (Gambler): “I tend to be critical of a lot of regulators and policymakers. However, David Rebuck earned my respect in his 13 years as the Director of NJ DGE. Under his direction, they became the new Gold Standard of state gaming regulation.”
Roger Gros (Publisher): “I’ve met and interviewed every director of the DGE and every chairman of the Casino Control Commission over the years. While some have been good, some have been bad, none have shown the vision and integrity shown by David Rebuck.”
Stray Thoughts
One of the things I’ve learned in this industry is to keep your head below deck unless you’re very confident in what you’re saying. Whatever you think you know, you probably don’t (or at least don’t have a complete picture), and the industry is full of brilliant people who will let you know why.
Also, if nobody shows up to tell you you’re wrong, it doesn’t mean you’re right. They may think so little of you that you’re not worth responding to.
Finally, never boost someone else’s data/theory without vigorous vetting. Be careful who you vouch for.