Stating The Obvious
Stakeholders oppose efforts to open the Delaware online gambling market. AC casinos are well aware of the looming threat of New York casinos. Novig exits Colorado.
The Bulletin Board
NEWS: Stakeholders (RSI and the Lottery) oppose efforts to end Delaware’s online gambling monopoly.
NEWS: Atlantic City casinos need a plan to counteract New York casinos.
NEWS: Maine Gambling Control Board Chairman opposes online gambling.
NEWS: Another class action lawsuit has been filed against DraftKings for its prior use of “risk-free” bets in promotions.
AROUND the WATERCOOLER: Novig’s Colorado experiment is already over.
STRAY THOUGHTS: This week’s podcast.
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.
RSI and the DE Lottery Oppose New Online Gambling Bill
As reported last week, Delaware lawmakers are considering ending the lottery-run monopoly and opening the state’s mobile betting market to more operators.
However, those efforts face a gigantic hurdle, as the stakeholders, the Delaware Lottery and Rush Street Interactive, oppose the idea.
Helene Keeley, the executive director of the Delaware Lottery, told Legal Sports Report that if enacted, the legislation would reduce payments to the state. The bill, HB 365, would set the tax rate at 18% and allow for promotional deductions. Delaware currently receives a 52.5% revenue split on slots, 20% on table games, and 50% on sports betting from the platform provider.
Per Keeley:
“HB 365 would reduce State revenues, negatively impact the State’s equine and agricultural industries, and exacerbate problem gambling by significantly increasing ‘free’ bets and promotions. If enacted, the bill would shift State revenues to sports wagering companies and also trigger federal excise taxes.
“The Delaware Lottery’s new mobile sports and iGaming application – offered by the State’s three casinos via the BetRivers app – was awarded through an open, public competitive bid process… HB 365’s proposal to license multiple mobile sports gaming businesses to compete with ourselves would not ‘grow the pie’ but instead lead to smaller slices of pie – especially for state taxpayers.”
The current lottery partner, Rush Street Interactive, has plenty of reasons to oppose the bill. RSI was awarded the contract last year after its proposal was chosen over incumbent 888. RSI can point to its immediate success in growing the market, as well as the contract it signed with the state.
An RSI spokesperson told LSR:
“After a thorough State procurement process, including a formal RFP that only concluded less than a year ago, RSI was selected by the Delaware Lottery to operate both iGaming and mobile sports betting for the State. In reliance on the Lottery’s contract award, RSI invested substantial amounts of time and money to produce an outstanding product for the Lottery and Delawareans.”
Adding to the complications, if (and that’s a big if) the bill becomes law, RSI would likely file suit, as once again, states are trying to pull the rug out from under online operators and alter agreements after the fact.
Can Atlantic City Casinos Deal With New York?
The topic of Atlantic City was one of the focuses at the recently concluded East Coast Gaming Congress, held at Hard Rock Atlantic City. One key thread attendees hoped to unravel was the still-in-process New York casinos.
In February, Hard Rock CEO Jim Allen estimated that “roughly 20% to 30% of the AC market are customers from the North Jersey and greater NYC area.”
“If our industry does nothing, it’s not going to be a pretty picture,” Bally’s Chairman Soo Kim said, per reporting from ECGC by Casino Reports John Brennan. “Fellow operators here are not our competitors. We’re all in the same business. The sports analogy would be we’re all teams in the same league, and at the end of the game, you shake hands and maybe grab a beer.”
Allen noted the need “to put our differences aside. I don’t want to see any of our competitors close; I don’t want to see 2,000 or 3,000 jobs lost. It’s not healthy for this city.”
Resorts CEO Mark Giannantonio noted that Atlantic City has two years to figure it out but that it will take a coordinated effort from the casinos and the government:
“There has to be an improvement in capital infrastructure; let’s take care of our homeless population — they deserve to be taken care of — and make sure we have a reassuring police presence here. We need to reinvent ourselves as a real entertainment destination.”
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
Maine GCB Chief Is No Fan of Online Gambling
The chair of the Maine Gaming Control Board, Steve Silver, wrote an opinion piece for the Portland Press Herald in which he calls online gambling “a highly addictive product… that will disproportionately harm young Mainers, cut jobs and deprive worthy beneficiaries of needed tax revenue.”
Silver brought up two common talking points.
The first is the increase in calls to problem gambling helplines (in Maine and beyond) following the legalization of online sports betting or casino games.
The second is the infamous study commissioned by the Maryland Lottery and Gaming Control Agency. According to Silver, the study indicates that the legalization of online gambling “will lead to large cuts in tax revenue and job losses” and “cause a 10% drop to land-based casino revenue.”
As I suspected when the report was first published, it has since been cited in several states outside of Maryland as a raison d’etre to not legalize online gambling, including Louisiana, Mississippi, and now Maine.
Silver ended his commentary by saying, “L.D. 1777, as currently written, is a threat to Maine, and I urge the Legislature and Gov. Mills to exercise extreme caution before diving into internet gaming legalization.”
DraftKings Has Another Class Action Lawsuit to Deal With
Regulators ended the use of “risk-free” in promotions some time ago, but apparently not soon enough, as two separate class action lawsuits have been filed against DraftKings over its previous promotions.
The latest lawsuit, filed in the Southern District of New York, names Samantha Guery as the plaintiff. It is similar to a previous lawsuit filed in Massachusetts in December, as it targets “risk-free” promotions.
“The promotion required that the customer place a bet with their own money. If a customer lost their bet, they were not returned to their original position. Instead, their accounts were credited with a “Free Bet” that was worth less than its counterpart in US dollars implied by the promotional materials.”
The Massachusetts lawsuit also claims deceptive business practices:
“DraftKings knowingly and unfairly designed its promotion to maximize the number of consumers that would sign up for its sports gambling platform, the number of bets that would be placed through the platform, and the amount of money that would be placed on bets through its platforms. This is a particularly unfair business practice because of the addictive nature of the underlying product offered by Defendant.”
SPONSOR’S MESSAGE - Maximize your trading success in 2024 with OpticOdds’ real-time Odds Screen.
Built for operators with an emphasis on speed and coverage, OpticOdds offers:
Pre-match & in-play main lines, alternative markets, player props for the Big 6, soccer, and more
Create bespoke custom weighted lines on the screen and receive live alerts for line movement via Slack or Teams
Push format API offering real-time betting odds from 150+ sportsbooks: player props, alternate markets, injury data, historical odds, settlements, scores & more
Get in touch at opticodds.com/contact.
Around the Watercooler
Social media conversations, rumors, and gossip.
NoVig, No More?
A reader passed on the following email they received from NoVig in Colorado.
The framing suggests that they are reworking their product. However, the above looks like the exit letters other licensed operators must send when leaving a regulated jurisdiction.
NoVig launched in Colorado in January, its first and only state, with a new idea for sports betting.
As the name suggests, “Instead of charging everyday bettors, Novig generates revenue by charging market makers and professional bettors. With a user-friendly interface and cutting-edge features, Novig aims to redefine the sports betting experience for Colorado sports fans.”
Stray Thoughts
In this week’s podcast (available to paid subscribers tomorrow and to everyone on Saturday), I chat with The Gambling Files dynamic duo of Jon Bruford and Fintan Costello.
This was a fun one (no surprise to listeners of The Gambling Files) that ended with my competitive side coming out, as one of my guests is banned from further appearances until I close a #2 Captains of Crush gripper.