Say What Again, I Dare You
What is DFS and what is sports betting. that's the question a panel at the SBC Summit North America tried to answer.
The Bulletin Board
NEWS: DFS 2.0 was a hot topic at SBC Summit North America, but many questions remain.
WEEKEND CATCHUP: ESPN Bet + PGA; FanDuel delivers in DC; Run It Once rebrand; WSOP.com update; DraftKings acquires Sports IQ Analytics.
NEWS: Alabama's gambling expansion effort is officially over.
VIEWS: The IRS raise could raise the slot reporting threshold for the first time since 1977.
AROUND the WATERCOOLER: Public to private.
STRAY THOUGHTS: Seven years of abundance followed by seven years of famine.
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DFS 2.0 Takes Center Stage at SBC Americas
What is DFS? What is sports betting? That was the crux of a panel discussion on Thursday at the SBC Summit North America Conference - and the genesis of today’s newsletter title.
The question has been considered for more than a year, and good answers are still difficult to come by.
Per Robert Linnehan, “Justin Stempeck, deputy general counsel for the Massachusetts Gaming Commission, urges companies to approach their regulators when evaluating entry into a market or launching a new product. It's cheaper than hiring a lawyer when you receive a cease-and-desist letter.”
The problem is that many states that have reversed course on DFS 2.0 games had previously given the companies regulatory approval.
Derek Schmidt, a partner for Husch Blackwell representing PrizePicks, said, “PrizePicks wants to be regulated, it wants to be taxed, Schmidt said, but regulations differ from state to state, and it takes quite a bit of effort to understand what is allowable in each market.”
From Jessica Welman’s reporting, Andromeda Morrison, general counsel for the Ohio Casino Control Commission, and Schmidt want legislatures to handle the issue “so that regulators are not stepping out of their lane.”
But later in the discussion, Schmidt said, “Several regulators have never engaged, never asked questions, and then suddenly demand they get out of dodge, which can be frustrating since they want to be good actors.”
Anyone looking for a deeper dive into DFS 2.0 and other “gray” games can listen to my podcast episode with Dustin Gouker. I also wrote a feature column on the topic in September.
Weekend Catchup: ESPN Bet + PGA; FanDuel Delivers in DC; Run It Once Rebrand; WSOP.com Update; DraftKings Acquires Sports IQ Analytics
ESPN Bet + PGA: ESPN Bet has inked an official sports betting partner deal with the PGA Tour. The agreement runs through 2026 and includes on-site activations at PGA events. More importantly, “ESPN BET will be integrated into broadcasts on ESPN networks, with betting odds and insights provided to enhance storytelling within the Championship.”
FanDuel is tearing it up in DC: Per SportsHandle’s Bennett Conlin, “The D.C. Lottery says sports bettors in the District wagered $14.7 million on FanDuel in the first two weeks since the betting operator received District-wide mobile access. That's more than was wagered on GambetDC in D.C. in February and March combined.”
Run It Once Poker is getting a new name: Per reporting from Pokerfuse, Rush Street Interactive is rebranding Run It Once Poker (the platform it purchased from Phil Galfond in March 2022) to BetRivers Poker. “The products page on the RSI site shows “BetRivers Poker” as currently in development,” Pokerfuse reports. “Had the platform still been called Run It Once, it may have caused confusion with a poker training site of the same name that is run by Galfond.”
WSOP upgrade and interstate merger: The WSOP.com update that will precipitate the merger of its New Jersey, Nevada, and Michigan player pools is coming soon, per Pokerfuse's report: “WSOP has reportedly confirmed an update is coming. However, no timeframe has been provided. Players will be notified via email.” A scheduled May 8 update has been changed to later this month (May).
DraftKings picks up another trinket: DraftKings has made another acquisition, but this one is not as splashy as its $750 million purchase of Jackpocket. Per Next.io, “DraftKings will acquire AI-powered odds provider Sports IQ Analytics” to boost its pricing capabilities. The sale price is unknown.
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Sweet Sour Home Alabama: Gambling Expansion Fails
Thursday was the final day of the Alabama legislative session, and efforts to authorize lottery and casino gambling in the state have come up short. Gov. Kay Ivey said a special session is unlikely.
After a compromise was reached in a conference committee, the House approved the measure, but the Senate never brought the proposal to the floor for a vote.
The bill, SB 151, would have authorized traditional lottery games, slot machines at select racetracks and locations, and the governor to negotiate a compact with the Poarch Band of Creek Indians.
The bill had already been watered down in the Senate, removing mobile sports betting, and then retail sports betting and table games.
“The Alabama Senate passed a pared-down gambling expansion package that includes a state lottery, tribal compacts, and historical horse racing (HHR). Commercial casinos and sports betting, both in the House version, didn’t make the cut. So, what’s next in Alabama? The House could concur (unlikely), try to iron out differences in a conference committee (possible), or drop the idea altogether (also possible).”
Looking at future prospects for gambling expansion in Alabama, “We were so close but yet so far,” Alabama Senate Minority Leader Bobby Singleton said.
One of the issues is ALFA, the Alabama Farmers Federation. The group has been a vocal opponent of the gambling bill, which pitted it against another piece of legislation that went to a conference committee: the Alabama Farm Center bill.
"Gambling is the main issue. It creates a lot of problems down here. It always does," Sen. Shay Shelnutt, the Alabama Farm Center bill's sponsor, told reporters. "It's all because of gambling… The gambling interests aren't getting their way. They've decided that they're going to take a stance and kill this bill."
As I’ve reiterated throughout Alabama’s effort to expand gambling, we are talking about Alabama.
IRS Could Raise the Slot Reporting Threshold
The reporting threshold for slot machine wins has been set at $1,200 for over 45 years, but this could soon change.
According to Market Watch, during a recent House Appropriations subcommittee hearing on the agency’s proposed budget, IRS Commissioner Danny Werfel said, “I know that this particular recommendation is under serious consideration.” The less exciting news is that Werfel said the decision is ultimately in the hands of the Treasury Department.
The American Gaming Association has long supported increasing the reporting threshold. The AGA argues the low threshold creates a lot of paperwork for the casino (and also for gamblers and the IRS) and is seen as a friction point that could push people toward black market slots.
As Casino Reports noted in its reporting on the topic:
“Raising the threshold would not only align with inflationary trends but also with the broader initiative of using data strategically to enhance tax reporting and compliance. It’s a move that could simplify the tax process for individual taxpayers and align the tax code with contemporary financial realities.”
Rep. Dina Titus (Nevada) and the Congressional Gaming Caucus have also supported raising the threshold. They have introduced multiple bills over the years and, more recently, sent a letter of support for the IRS Advisory Council’s (IRSAC) recommendation to raise the slot reporting threshold to account for inflation.
Rep. Titus has said for several years that the $1,200 reporting threshold “creates an unnecessary burden on the gaming industry… While I believe appropriate taxes should be collected on winnings, raising the threshold would reduce paperwork and ensure this is accomplished more efficiently.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Will there be a wave of public companies going private? Bally’s is considering it, and as Chris Grove noted on X, AGS is doing just that.
Stray Thoughts
The next 12 months (and likely more) could be brutal for online gambling.
Online casino and sports betting legislative efforts have been shut out thus far (with only a couple of prospects remaining), which means it will be more than a year after North Carolina’s March 2024 launch before a new state comes online.
At the same time, the industry is trying to prevent states from increasing taxes and pulling the plug on some of its betting markets (college prop bets).
That doesn’t bode well for an industry in constant search of growth.