The Honeymoon Is Over
Professional sports leagues have cozied up to sports betting, but after a spate of scandals they may want to keep it at arm's length.
The Bulletin Board
NEWS: Pro sports leagues may be rethinking their sports betting strategy.
WEEKEND CATCHUP: Super Bowl vs. F1 in Vegas; Early NC revenue numbers.
NEWS: Massachusetts Lottery is making its case for online offerings.
BEYOND the HEADLINE: MA Lottery Director has concerns about DraftKings’ acquisition of Jackpocket.
QUICK HITTER: Prime Sportsbook Lands in New Jersey; Kentucky is next.
AROUND the WATERCOOLER: MGC tackles Sports Betting Twitter’s favorite topic.
STRAY THOUGHTS: A little freelance work.
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Professional Sports Leagues May Need a Betting Reset
In 2012, NFL Commissioner Roger Goodell said, “The spread of sports betting, including the introduction of sports betting as proposed by the state of New Jersey, threatens to damage irreparably the integrity of, and public confidence in, NFL football.”
Goodell was not alone at that time. Every league and the NCAA agreed - until they didn’t. The shift began with NBA Commissioner Adam Silver’s 2014 New York Times op-ed, in which he looked at the tea leaves and realized legal sports betting was a matter of when, not if.
Following the Supreme Court’s PASPA decision in 2018, the leagues shifted in Silver’s direction, sensing an opportunity to capitalize on the newly legalized markets. Unlike its professional counterparts, the NCAA has done a good job of keeping betting at arm’s length.
The first steps were small: integrity fees. The leagues wanted to wet their beak and get something for nothing by guaranteeing to beef up what they were already doing, monitoring game integrity.
When integrity fees failed to gain traction, the leagues asked for official league data requirements, with some mild success. They also began forming partnerships with sportsbooks and even casinos, and from there, it was a small jump to becoming licensees.
And now, after making their bed, they need to lay in it.
As I wrote in 2022, “There is no quicker way to draw (unwanted) attention from lawmakers and regulators than a scandal… A sports betting scandal in the legal market would elicit a swift response, which is likely to be an extreme overreaction.”
And that’s precisely where we find ourselves, and the leagues are not innocent bystanders.
“If you’re going to make these deals with the devil, you’d better take some of that money and protect your soul. And your soul, as a sports league, is the credibility of your product, the integrity of your product.” Declan Hill, an associate professor of investigations at the University of New Haven, said in a recent interview.
To Hill’s point, a new betting scandal is becoming a weekly occurrence, and these scandals are hitting just about every league.
Shohei Ohtani, Rece Davis, Temple Basketball, Jontay Porter, J.B. Bickerstaff, Rudy Gobert, and going back a little further, Shane Pinto, The Jaguars employee who stole $21 million, suspended NFL players, Alabama Baseball, and Iowa and Iowa St. student athlete betting.
Further, operators and their partners are continually caught with their hands in the cookie jar, with the list below a small smattering of the hiccups.
DraftKings failed to prevent Massachusetts customers from funding their accounts with credit cards.
Ohio doled out more than $1 million in fines in 2023, most of which were advertising-related.
The scandals and the blowback they’re causing (like The SAFE Bet Act) raise a question for professional leagues: Can the leagues weather this storm, and if not, is it possible to disentangle themselves from the betting world?
Weekend Catchup: Vegas Super Bowl & F1; Early NC Revenue Numbers
Super Bowl delivers; F1 fails: Thanks to the Super Bowl, Las Vegas had its best February ever, and despite a shortened month (29 days), February 2024 was the sixth-best month of all time. On the other side of the coin, The Gambling Files podcast had Michael Schaus on to discuss the negative impacts of Las Vegas’s F1 race.
Early North Carolina Revenue Numbers: The North Carolina mobile sports betting industry took in nearly $200 million in bets in its first week. Those numbers need some perspective, as the industry launched just before March Madness. Still, the state is looking increasingly like a Top 5 market.
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MA Lottery Blames Sports Betting
The Massachusetts Lottery is having a great year in FY 2024, but Lottery Director Mark William Bracken told MassLive there are reasons to be concerned about the current sales trend.
Profits are up by $83.1 million, or 2%, during the first eight months of FY 2024, with sales totaling $4.2 billion. However, February sales were down $35 million, or 6.8% year-over-year. Scratch tickets, the MA Lottery’s bread-and-butter (65% of sales), were down $41.1 million in February.
According to Bracken, the introduction of a $50 scratch-off ticket last year “papered over” negative sales trends - the ticket was the best-selling lottery ticket in the country.
Bracken believes mobile sports betting has something to do with the decline. He is not anti-sports betting; rather, it wants to compete on equal footing and is once again making the case that it should be allowed to offer a full suite of online products. “We need to be able to meet our players where they are at, and where some of our players are at is online,” Bracken has said.
Legislation (S 170) to authorize online lottery sales in the Massachusetts Senate was introduced in 2023.
The need to go online is something MA Lottery officials have been saying for nearly a decade. While the state has added some online options (online ticket redemption and authorizing Jackpocket as an online courier), it falls short of the Lottery’s ultimate goal, which is online draw and instant win games.
Beyond the Headline: DK-Jackpocket Tie-Up Concerns
Sticking with the Mass Live article, the Massachusetts Lottery evidently looks at gambling as a zero-sum game and isn’t in the mood to share.
On the topic of DraftKings acquisition of Jackpocket, MA Lottery Director Mark William Bracken said, “One of my competitors that I think is part of the reason for our sales dip is now going to own a company that’s going to be selling lottery products… I’m now going to have an online sports wagering vendor that’s going to be able to facilitate the carrying of my tickets.”
Bracken went on to say that even though the MA Lottery is selling the ticket to Jackpocket, he questions why the Lottery isn’t allowed to sell the same ticket.
These potential cannibalization concerns were raised when the acquisition was first announced. As I wrote at the time, lottery officials are likely to balk at the possible blending of online lottery, sports, and casinos.
“Several people mentioned lotteries may have concerns that a shared wallet with an online casino-sportsbook could cannibalize lottery sales.
“There is some truth to this, and if you think gambling regulators are overly cautious, wait until you meet Lottery commissions.”
Quick Hitter: Prime Sportsbook Launches in NJ on Easter
Prime Sportsbook is now available in two states after its successful soft launch in New Jersey on Easter Sunday. A launch that has been a long time coming for Prime’s Joe Brennan Jr., who wrote on X:
“I started the legal & political effort in NJ to overturn the PASPA national ban on sports betting back in Nov 2008 with the hope of someday opening a sportsbook here.
“Today, it finally happened.”
According to Prime’s COO Adam Bjorn, Kentucky is their next targeted launch. That launch could happen before the Kentucky Derby on May 4, with Bjorn saying, “I hope before Kentucky Derby, but I’m guessing we are a dog right now, but leaning into it on all fronts.”
My previous coverage of Prime Sportsbook and how it has fared in the Ohio market.
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Around the Watercooler
Social media conversations, rumors, and gossip.
Sports Betting Twitter was very excited when the Massachusetts Gaming Commission scheduled a hearing on limiting bettors. And they weren’t disappointed.
As reported by Sports Handle, multiple commissioners were curious why sportsbooks aren’t more transparent about limiting bettors.
Commissioner Eilleen O’Brien noted that the MGC should know “how and why” sportsbooks determine who to limit.
Commissioner Nakisha Skinner spoke for the consumer, saying, “There should be a way for patrons to really understand what will get them limited.”
But the question of the day goes to MGC interim chair Jordan Maynard, who asked:
Sports bettor and Sports Betting Twitter mainstay Captain Jack applauded the MGC for discussing the topic.
Stray Thoughts
As I mentioned last week, I’ll be a monthly contributor to the new website CasinoReports.com. You can follow them on X at casino_reports.
My first column is live and looks at the state of online casinos and online poker in the US. Each installment will feature two trends to watch. March’s trends are:
States wanting higher tax rates or deciding to raise tax rates after the fact.
Growing opposition to online gambling from organized labor.
What proportion of sports betting is done legally in OSB states vs other non-regulated places?