We All Keep Our Promises
States are conducting one-sided negotiations on everything from taxes to exclusivity deals, raising the question: Can gambling operators trust states to keep their promise?
The Bulletin Board
NEWS: A Delaware bill that would open the state’s online gambling market is on the move despite stakeholder opposition.
NEWS: It’s official: Illinois has boosted its sports betting tax rate.
NEWS: A look at Sporttrade’s new transparency tool, “The Tape.”
QUICK HITTER: Evidence MGM is targeting Tipico’s US sports betting assets.
AROUND the WATERCOOLER: Online casinos by another name.
STRAY THOUGHTS: Simplifying your WSOP coverage.
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Delaware Bill Would Create an Open Online Gambling Market
Since replacing 888 in January, Rush Street Interactive has grown the Delaware online gambling market by leaps and bounds, effectively tripling online casino revenue and nearly doubling sports betting revenue overnight.
The impressive growth is apparently not impressive enough, as state lawmakers have introduced legislation to end the lottery-run monopoly and bring more sports betting operators into the state.
The legislation, HB 365, is gaining some traction. It advanced through the House Administration Committee last week and is now in the House Appropriations Committee. Negotiations are likely to take place behind the scenes, and if a compromise is reached, it could make it to the House floor.
The bill would allow each of the state’s three racinos to partner with two online operators.
There is a $500,000 fee for an initial 5-year license, with an 18% tax rate. An additional 1.5% stipend would be sent to the horse racing industry.
To no one’s surprise, RSI and the Delaware Lottery oppose the idea.
RSI was awarded the contract in August 2023, with the Lottery and RSI agreeing to an initial five-year term. Breaking that agreement could lead to a lawsuit.
As reported by Delaware Public Media:
House Minority Leader Mike Ramone (R-Pike Creek South) raised concerns over legal challenges from Rush Street Interactive if the bill were to go through, considering the state has already contractually named them the sole internet gaming operator for Delaware.
"The way everybody loses is when we end up in court," Ramone said. "I'm just stating, if I were the owner and this [bill] went through, in any format, without my involvement or cooperation — [the state] gets sued, not [the other vendors]," he said.
Illinois Hikes DraftKings and FanDuel Tax Rate by 25%
Author’s note: I will be taking a deep dive into the Illinois tax increase in Friday’s feature column.
The graduated sports betting tax rate that emerged during Illinois budget talks this past weekend has now been approved by the Senate and House and will become law once Gov. J.B. Pritzker signs it. The tax increase is a massive loss for the top two players in the industry in one of the most critical states.
The new rates hit FanDuel and DraftKings the hardest, as the state will move away from an across-the-board 15% rate to a graduated rate based on an operator’s adjusted gross revenue (FanDuel and DraftKings control the bulk of the market):
20% base rate
25% over $30 million
30% over $50 million
35% over $100 million
40% over $200 million
The Deutsche Bank team estimates FanDuel and DraftKings would “absorb the vast majority of the incremental burden.” The top two would shell out an additional $146 million, while the rest of the market would see their obligations rise by a collective $25 million.
The major companies’ stock prices have plummeted in the wake of the news, as Illinois becomes a far more difficult market to operate in. More importantly, there is a growing fear that other states will follow Illinois’ lead.
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Sporttrade Unveils New Transparency Tool “The Tape”
Sporttrade (a newsletter sponsor) announced the launch of The Tape last week. The Tape allows users to see every trade made on the Sporttrade app in real time - similar to the company’s #WhaleTracker, which posts big bets to X in real-time.
The Tape is available on iOS, and according to Sporttrade CEO Alex Kane, users can expect ongoing improvements, including search and filtering, to make the tool more useful.
Kane listed three reasons behind the release of the product on LinkedIn:
Legitimacy
Transparency
Network Effect
Legitimacy: Kane noted that Sporttrade has stellar pricing, uptime, and speed, “but to get a new player to believe it, they need to see it — and not from us. They need to see it from others.” By making The Tape available to everyone, they will “see that other people are indeed getting great prices at good size on Sporttrade.”
Transparency: He goes on to say that The Tape will help answer general questions, ‘What are people betting on today?’ And specific questions, ‘I wonder how many people are buying the Bills right now as they’re down a touchdown at half?’
Network Effect: “The Tape allows players to copy trades they like in one swipe, but it also gives a reason to open the app, even if you’re not yet a player,” Kane wrote on LinkedIn. “Over time, we may even allow players to create a profile so that they can claim credit for their trades or comment on others that appear on the feed.”
As a fan of transparency, I find The Tape an exciting product and a unique differentiator for Sporttrade.
Quick Hitter: MGM + Tipico Rumors Gain Steam
Last month, Earnings+More reported that Tipico is shopping its US sports betting platform and assets. According to E+M, MGM is the most likely buyer, and more rumors are swirling in that direction.
Per Eilers & Krejcik Gaming channel checks, MGM is considering the Tipico US platform and parts of the US business. The firm believes Tipico could act as an emergency backup in case its current arrangement with Entain splinters.
Tipico ranked 12th in EKG’s 1H24 OSB app rankings, with the positives being its SGP product, but that was offset in the testers’ minds by the lack of search functionality.
Per EKG: “MGM has been clear it wants a sportsbook platform, and Tipico US, while not a perfect solution, appears to fit the bill.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Former (it’s still strange writing that) New Jersey Division of Gaming Enforcement chief David Rebuck has some thoughts about online instant win games offered through state lotteries (h/t to Lottery Geeks for putting this on my radar).
“With online lottery programs [that offer online instant win games], they are nothing more than online casino gambling,” Rebuck told EGR. “Some states that don’t allow online gambling have online lottery sales, so it’s about states deciding what’s important to them to regulate.”
With what is and isn’t legal gambling (skill game slots, DFS 2.0, sweepstakes, Arcade Apps), the online instant win games offered by multiple state lotteries have floated by unnoticed.
Stray Thoughts
The World Series of Poker is officially underway. For my readers interested in following along, I highly recommend you make three stops every day:
PokerNews.com for live reporting and results
Poker.org for deeper dives and human interest stories
Pokerfuse.com for the stories behind the stories
Poker.org even has a link to pitch stories and news from the WSOP:
Today’s title is also such an obscure reference I feel I need to link to the source (very end of the clip):