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Rush Street Interactive has cut ties with sports betting affiliates in eight states, but not in iCasino + sports betting states.
The Bulletin Board
NEWS: RSI is cutting ties with affiliates in as many as eight states.
BEYOND the HEADLINE: Does the news have anything to do with RSI sale rumors?
LOOSE ENDS: Third Planet acquires Props.com; Bally’s is live in MD; LV pays influencers millions.
NEWS: Massachusetts online lottery details emerge, including a launch timeline, and there will be e-instant games.
BEYOND the HEADLINE: Did MA lawmakers get snookered on online lottery?
AROUND the WATERCOOLER: Did an offshore affiliate spark Bovada C&Ds?
STRAY THOUGHTS: No days off.
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Rush Street Interactive Ends Affiliate Deals in 8 States
With legalization efforts stuck in the mud and no new state launches on the horizon, I’ve been sounding the alarm for gambling affiliates that got fat during the sports betting gold rush.
As I wrote last month: “The value of affiliate CPAs is definitely something to watch as there are few new market launches on the horizon.”
New markets are jet fuel for a company’s financials. With nothing on the horizon (and the hoped-for wave of online casino legalization still several years away), attention will turn to “wasteful” spending, like massive CPAs for gambling affiliates.
How bad is it getting? First reported by Gambling 911 and corroborated by RSI during its earnings call:
“This morning we covered how Unibet was systematically cutting off affiliates in parts of Europe, how DraftKings and FanDuel continue to "cull" smaller affiliates and now for the big one... Rush Street Gaming will be cutting ties with all of its affiliates.”Affiliate CPAs are dropping like a stone, at least at Rush Street Interactive.
Gambling 911 posted the email sent to affiliates, which listed eight affected states. Noticeably absent was the state of Pennsylvania, where Rush Street has a strong presence and operates a licensed online casino, as well as the online casino states of Michigan, New Jersey, Delaware, and West Virginia. Also unmentioned were New York and Iowa.
*Update: A source has confirmed that RSI ended affiliate deals in New York and Iowa several months ago.
Why those states? RSI CEO Richard Schwartz highlighted the company’s approach during its latest earnings call (good summary from Earnings+More), noting 50% growth in nine of its nineteen markets, nine of which offer online casinos.
CFO Kyle Saunders also downplayed the news, saying it cut ties with affiliates in specific markets with the intention of spending more on affiliates in other markets.
Still, if you’re a gambling affiliate, the landscape is looking less and less hospitable.
As affiliate Mike Murphy said on X regarding the news, “The US market, as far as affiliate marketing goes, is in shambles.”
Beyond the Headline: Don’t Forget the RSI Rumors
As previously reported here, RSI has been pulling back on affiliates for some time.
“In Q1, we had our highest number of first-time depositors ever as a company and the highest in North America since our launch in New York in the first quarter of 2022,” Rush Street Interactive President and CEO Richard Schwartz said during the company’s Q1 earning’s call, adding that “we’ve been able to do this while lowering our CPAs to less than half of what they were a year ago.”
However, it’s hard not to connect the dots between the company’s announcement ending its affiliate program at the end of August and the ongoing acquisition rumors.
Others, including Gambling 911, wonder if this is a sign of a withdrawal from US sports betting markets.
However, considering the company’s recent earnings report, RSI looks to be in good shape, and as noted, the company has reduced its reliance on affiliates over time.
From the team at JMP Securities:
“Rush Street Interactive (RSI) performed well in 2Q24, increasing revenue to $220M, or +34% YoY. The top line beat our near-street high estimate by 6% led by uniform growth across nearly all of its markets.”
And of interest to today’s newsletter items [bold mine]:
“The company was able to generate operating leverage over several items within the cost structure including marketing spend (16% of revenue) and G&A (8% of revenue). As a result, management increased revenue guidance by 5% at the midpoint and 24% for EBITDA as several of its KPIs, including first-time depositors and MAUs, accelerated in 1H24. Guidance now implies revenue growth of 22% in 2H24 and EBITDA up $14M at the midpoint.”
RSI stock was up 15% overnight.
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Loose Ends: Third Planet Acquires Props.com; Bally’s Is Live in MD; LV Pays Influencers Millions
The trifecta is complete: Third Planet Affiliates has acquired Props.com from American Affiliate (full disclosure: I do freelance work for Third Planet). The domain rounds out Third Planet’s sites, as it already operates CasinoReports.com and LotteryGeeks.com. Props.com gives it the sports betting/DFS domain it lacked. “Props.com is a category-defining domain name with significant search traction,” said Third Planet co-founder Cal Spears. “It’s a perfect fit for covering both traditional U.S. sports betting and the burgeoning DFS+ space led by Underdog and PrizePicks. Our young company is excited to build Props.com into a daily resource for both bettors and fantasy players.”
Bally’s mobile sportsbook goes live in Maryland: Bally’s mobile sportsbook is officially live in Maryland. This is the ninth state where Bally’s sportsbook is available, and it follows the news that Bally’s accepted a buyout offer from its largest shareholder, Standard General. The Maryland market is going through changes. Bally’s is in; Betr is expected to launch soon; Superbook and Betfred recently left the market.
Influencers get paid, but nobody knows how much each received: Interesting reporting from the Las Vegas Review-Journal on the Las Vegas Convention and Visitors Authority marketing spend through influencers. According to the LVRJ, the LVCVA “is spending more than $2.2 million on influencers to promote the city, but the taxpayer-funded agency redacted the amount of money each influencer received, calling it a trade secret.” the LVRJ claims there are no laws that allow the agency to hide its spending. John Mehaffey (podcast #18) has noted that many of the influencers have failed to note that it is sponsored (paid) content.
Details Emerge as Massachusetts iLottery to Launch in Late-2025
Massachusetts recently legalized online lottery, and while the details at the time were scant, thanks to Lottery Commissioner Mark William Bracken, we now have a very clear picture of what the offerings will look like and when it will go live (December 2025).
Speaking with Mass Live, Bracken confirmed that e-instants (online instant win games that have a similar look and play to online slot machines) will be a big part of Massachusett’s online lottery offerings.
Besides the option to buy drawing game tickets such as “Powerball” and “Mass Cash,” the majority will be comprised of e-instant tickets, which is “an online version of a scratch ticket,” Bracken said. From there, several different game types will be offered.
Bracken went on to detail several instant options the MA Lottery will offer.
“One would be your traditional scratch ticket, and the online version will have a simulated scratch, so the play mechanics will be very similar to an instant scratch ticket,” he said, adding that other games would use scratch-off mechanics (a predetermined prize) but would be more gamified.
“It could be very similar to, say, a ‘Connect Four’ game, where symbols are going to drop down, and you’re going to match connecting symbols.”
Bracken also said that some games would allow players to set the price point, risking as little as 10 cents, while other games would have standard pre-set price points that lottery customers are familiar with.
Beyond the Headline: Did MA Lawmakers Know What They Voted For?
It will be interesting to see how the legislature views online instant win tickets, which have the same look and feel as online slot machines.
For those too young to remember, the Minnesota legislature didn’t take too kindly to its Lottery authorizing online lottery sales (and sales at gas stations) in 2013 and promptly passed a law prohibiting online lottery sales, bringing the experiment to an end in 2015. Minnesota is one of many states that allows their lottery to authorize new games (and delivery methods) without legislative approval. Still, its foray into online was a step too far for the legislature, which felt the lottery took advantage of the legislature’s kindness in allowing the Lottery to bypass legislative hurdles to approve new games.
Massachusetts lawmakers may feel the same way. The authorization of online lottery didn’t specifically mention e-instants, but the language did seem to give the lottery a wide berth to authorize all sorts of online products.
As I wrote at the time, “It’s not 100 percent clear, but the language seems to include instant-win games, as it reads, “lottery tickets, games, and shares.”
If I’m unsure what the language does and doesn’t authorize, you can be confident the majority of lawmakers were also in the dark.
Case in point, I spoke with Play iLottery’s Drew Ellis, who watched the process play out in the legislature and believed that Massachusetts lawmakers believed that online lottery offerings would be limited to draw games, at least to start.
Some lawmakers may be surprised to learn they didn’t just authorize the sale of draw tickets online; they essentially authorized online slot machines. That revelation might not sit well, and we could see a Minnesota 2.0, with the legislature specifically banning e-instants when they reconvene.
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Around the Watercooler
Social media conversations, rumors, and gossip.
I spotted this in one of the previously mentioned Gambling 911 articles on affiliates:
“Playing Devil's advocate, sometimes affiliates get operators in trouble (witness what transpired recently with Bovada in Michigan where an affiliate used Google maps to make it appear as if Bovada's casino was based there). Don't get us started with all those bonus codes popping up on Google News!”
I was unaware of that detail, and my oh my, if an affiliate kicked off all of those cease-and-desist letters.
Stray Thoughts
Underdog Fantasy (a newsletter sponsor) won Twitter yesterday with the announcement that it has inked a deal with former Patriots head coach Bill Belichick to break down film for a new weekly series that will see the coach breakdown film and walk fans through the thought process of an NFL coach. Belichick will be a co-producer of the new show.