Caesars Offloads WSOP After 20 Year Run
GG Poker has acquired the World Series of Poker from Caesars, 20 years after the historic tournament fell in Caesars's lap after its acquisition of Binion's Horseshoe.
The Bulletin Board
NEWS: GG Poker acquires the World Series of Poker from Caesars.
NEWS: BetRivers says it will not follow DraftKings’ lead and add a surcharge.
BEYOND the HEADLINE: Analysts are raising questions about the tax implications and legality of the surcharge.
LEGISLATIVE and REGULATORY UPDATES: Missouri sports betting update; Centralized self-exclusion in Ontario; Bally’s slot hold percentage.
NEWS: Nebraska mobile sports betting effort runs into a familiar problem: a lack of education.
AROUND the WATERCOOLER: The Las Vegas poker scene is a mixed bag.
STRAY THOUGHTS: Surcharges and discounts.
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GG Poker Snaps Up WSOP Brand for $500 Million
How busy has the news cycle been? Any other week, this would have been front and center in Monday’s newsletter, but given all the mishegoss around surcharges, it took me an extra day to get to the sale of the World Series of Poker to GG Poker’s parent company, NSUS.
Per the press release, Caesars signed “a definitive agreement to sell its intellectual property rights for the World Series of Poker” to NSUS for $250 million, plus an additional $250 million due within five years of the closing date.
That’s a pretty solid return on investment for Caesars, which landed the World Series of Poker in its 2004 deal to purchase a host of properties from Binion’s Horseshoe Gaming properties — the WSOP was seen as a throwaway brand/asset in the deal.
So what does this mean for poker, particularly poker in the US? Details are still a little fuzzy, but it appears Caesars will continue to operate the WSOP.com online poker sites in four states: Pennsylvania, New Jersey, Nevada, and Michigan.
The press release also states that Caesars “will otherwise be restricted from operating online peer-to-peer real-money poker operations for a specified period of time and subject to certain exceptions.” We don’t know what those exceptions are.
Nick Jones (Podcast Guest #6) had some thoughts on this in a terrific X thread.
According to Jones (the first person you turn to for poker industry news):
“This isn't a first step towards GGPoker "launching in the United States." This is the step. This is the move. This licensing is to benefit GG. This ensures "WSOP" (which, upon deal completion, will be a wholly-owned GG brand) continues operation in the US.”
Jones believes GG will license the WSOP brand back to Caesars, with Caesars eventually shifting from its current software (Evoke, nee 888) to GG Poker, thereby giving it a foothold in the market and solving GG’s market access issues.
“GG needs a partner in the US to run real-money online poker,” Jones tweeted. “They don’t have the licenses. They may never get the full licenses. Could they get through the Nevada board? Do they want to do the disclosures necessary? The play here is get a licensed, respected partner to run it.”
BetRivers Will Not Copy DraftKings’ Surcharge
As I’ve been saying, the DraftKings surcharge story will have legs.
Yesterday brought us a couple of new tidbits, including Rush Street Interactive’s announcement in a full-blown press release that it would not be adding a surcharge:
“Rush Street Interactive… today announced that it has no plans to implement a customer surcharge, reaffirming its dedication to providing exceptional value to its players.”
Richard Schwartz, CEO of RSI, says, “As we put our customers first, it was an easy decision for us.”
That RSI sent out a press release on the topic indicates that it believes this can be a wedge issue for bettors. It also points to DraftKings reaching the decision to implement the surcharge on its own, although we will likely find out more about that when Penn holds its earnings call this week and FanDuel next week.
Beyond the Headline: Analysts Question the Surcharge’s Legality and Tax Implications
Another thread I’ve yet to pull at in the surcharge discussion is the tax implication of the surcharge.
Analyst Alfonso Straffon did some back-of-the-envelope math to illustrate how DraftKings could use the surcharge to bring down its tax liability in some locales:
Regulus’s Paul Leyland did question how states would consider the surcharge, asking Straffon on LinkedIn if he taxed the surcharge in his model: “If the surcharge is accepted as non-taxable, what’s to stop a book pricing everything at 100 and making all its income on winners surcharge rather than over round? No way states treat this as non-taxable revenue.”
Maryland regulator George McFarlane agreed with Leyland’s assessment, saying, “Sounds like income derived from sports wagering.”
Lobbyist Steve Brubaker has questioned the legality of the surcharge (at least in Illinois), noting, “I have argued that DK does not have the authority to assess a surcharge in Illinois. (All horse racing surcharges were passed by the legislature.) Because of Illinois’ unique graduated tax structure, the state will lose tax revenue if a surcharge is granted. Extremely unlikely.”
And yet another thread to tug at comes from Steve Bittenbender, who tweeted, “If I were a regulator in a state where a sportsbook levied a surcharge on winning wagers, I’d require the operator to publish the true odds on the wager (parentheses would be acceptable).”
Legislative and Regulatory Updates: MO Sports Betting Update; Self-Exclusion in Ontario; Bally’s Slot Hold %
Signatures submitted for Missouri sports betting ballot initiative: Last week, the Secretary of State’s office received signatures for Missouri’s sports betting petition. The office has two weeks to verify the signatures and approve the measure for the November ballot. STTP EXCLUSIVE: I’m hearing rumors that a powerful opponent (powerful enough to kill the initiative at the ballot box) could emerge, so stay tuned to this story.
Ontario is set to launch a centralized self-exclusion system: Gaming Ontario (iGO) has accepted a joint bid by Integrity Compliance 360 (IC360) and IXUP to develop a new centralized self-exclusion system for Ontario’s gaming market. “We are ecstatic to announce that IC360 has been chosen to implement a world-class centralized self-exclusion solution for iGaming Ontario designed to protect player privacy,” IC360 posted on LinkedIn. “We can’t wait to collaborate with our partner IXUP Limited to deliver an innovative and cutting-edge product for the Ontario market!”
Bally’s Chicago Casino’s high hold rate: Bally’s temporary casino in Chicago has a gaudy 15% slot hold rate, per US Bets’ Chris Altruda. According to Altruda, the property has the highest slot hold of any Bally’s property, edging out the company’s two Rhode Island casinos. Per Altruda, Bally’s Chicago casino has the “fewest slot/EGD gaming positions among the seven venues [where reporting is available] with approximately 800.” The property also ranks last in per gaming position drop, at $495,114, but because of the high hold rate, it is fifth in revenue per gaming position at $75,523.
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Mobile Sports Betting Still Has Work to Do in Nebraska
The Nebraska legislature held a hearing on mobile sports betting as it kicked off a special session last week, and while there was some hope lawmakers could pass a bill to put mobile sports betting on the November ballot, the hearing exposed, as iGaming Business’s Jill Dorson put it, that more “education is needed.”
“… on Wednesday (31 July), the general affairs committee held a two-plus-hour hearing that revealed lawmakers are not educated on digital sports betting or daily fantasy sports. The questions asked were reminiscent of those raised in other states that were unable to pass legislation.”
Covers.com’s Geoff Zochodne followed the hearing closely on X. While there was support, there were also politically powerful voices of opposition, which, coupled with the lack of understanding, makes passage unlikely.
Matthew Kredell also has an excellent report on the hearing over at Play USA.
Quick Hitter: LA Officially Bans College Player Prop Bets
Louisiana’s prohibition on college player prop bets officially took effect on August 1, making it the 13th state to prohibit prop bets on college athletes.
Louisiana banned the bets at the NCAA’s request, joining Maryland, Ohio, and Vermont — nine other states had preexisting prohibitions on these types of wagers. Montana said no to the NCAA, but several other states are considering similar action.
Four other states restrict college player prop bets in minor ways:
Iowa – allowed for out-of-state schools
Illinois – allowed for out-of-state schools
Rhode Island – allowed for out-of-state schools
Indiana – live player props are prohibited
In a May press release, the NCAA reiterated its opposition to college player prop bets:
“The NCAA believes bets placed on individual college athletes' performances, known as prop bets, should be eliminated. These types of bets target the individual for harassment and are more easily manipulated, threatening competition integrity. That's why the NCAA is advocating for elimination of player-specific prop bets in collegiate competitions. The NCAA's efforts are paying off.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
The sale of the WSOP isn’t the only poker-related news. There is also some news on the poker room front, as Caesars Palace has shuttered (temporarily?) its Las Vegas poker room, while the Venetian has debuted its new poker digs, billed as the largest poker room on The Strip.
The new 14,000-square-foot poker room is located on the second floor of the Grand Canal Shoppes. It features 50 tables and a host of amenities.
As John Mehaffey notes, poker rooms are becoming an endangered species on The Strip (definitely check out John’s stellar reporting on closed poker rooms):
Stray Thoughts
One more surcharge thought: DraftKings has set a bright line for an acceptable tax rate of 20%. Anything over that apparently requires the company to institute a surcharge.
So, my question is, what about states where the tax rate is 10% or less? Will DraftKings offer reduced pricing or discounts in those locales?