Put Up Or Shut Up
ESPN Bet has a lot riding on the upcoming NFL season, with a slate of product upgrades and new integrations across ESPN apps and programming set to roll out.
The Bulletin Board
NEWS: ESPN Bet pins its hopes (and future) on the upcoming NFL season.
LEGISLATIVE and REGULATORY ROUNDUP: Utah’s lottery push and Indiana Veteran Orgs support electronic pull-tab machines
NEWS: Massachusetts lawmaker plans to get the online casino ball rolling in 2025.
VIEWS: EKG examines the opportunities and pitfalls of DraftKings’ surcharge.
AROUND the WATERCOOLER: Today’s the day for Missouri sports betting.
STRAY THOUGHTS: This week’s podcast guest.
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Is ESPN Bet Entering Do or Die Territory?
During its latest earnings call, Penn Entertainment touted a new and improved ESPN Bet just in time for the upcoming NFL season.
Penn Entertainment CEO Jay Snowden said the company plans to leverage its partnership with ESPN to reactivate its digital database of four million customers, many of which are NFL-exclusive bettors.
However, the real optimism comes from long-awaited product enhancements and improved integrations with ESPN apps and programming.
As I said last month, I struggle to understand why ESPN Bet is already being written off as a failure:
“I’d point out that we knew product improvements weren’t expected until the start of the 2024 NFL season. Yes, the current numbers are concerning, but as I’ve previously said, it’s not at a pull-the-plug point. Now, if ESPN Bet enters 2025 without a significant increase in its market share, the naysayers will be proven correct.”
Among the enhancements in Penn’s Q2 presentation were profit boosts and expanded and improved SGP options, as well as the following features:
On the integration front, ESPN Bet will also be integrated into ESPN’s home and scores pages and “into the category-leading ESPN Fantasy App in the coming weeks, including deep-linked markets and personalized in-app betting offers.”
During the Q2 earnings call, Snowden said, “In parallel with our efforts, our partners at ESPN are expanding our unique ESPN BET media integrations, including those with ESPN’s leading fantasy football products, which will feature deep-linked markets and personalized in-app betting offers.”
Snowden also said that account linking would occur before the end of 2025, providing “personalized experiences inside ESPN BET based on a user’s ESPN Fantasy team and ESPN favorites.”
“The goal is that you can move between these apps really fluidly and get what you want, where you want it,” newly appointed CTO AaronLaBerge said. “If you place a parlay on ESPN BET, it’s going to appear in the ESPN app. You have to do no work. It’s going to be seamless.”
Based on Penn’s comments, the company is aware that the NFL season is when rubber needs to meet the road. As Earnings+More reported yesterday, “The team at Macquarie, meanwhile, suggested Penn’s margin for error in online execution was “razor-thin.”
Legislative and Regulatory Roundup: Utah’s Lottery Push; Indiana Veteran Orgs Support Electronic Pull Tab Machines
Utah lawmaker makes a lottery push: As previously reported in STTP in January, there is a push to bring a lottery to Utah. Utah is one of five states that don’t offer lottery products and one of two (Hawaii is the other) with zero legal gambling options. “What I’m proposing this year is that any county that borders a state with the lottery can open up and have the lottery in that county,” Birkeland told FOX 13 News. “So that you don’t have people in the heart of Salt Lake City or wherever else, just walking down the street to a convenience store, buying a lottery ticket. It still creates a little bit of work to get there.”
Indiana veteran groups push for electronic pull-tab machines: Indiana veteran organizations are “advocating for the legalization of electronic pull-tabs to generate more charity gambling revenue for their chapters,” per a report from the Indiana Business Journal. Pull-tab games are already available, but the organizations (including the American Legion and VFW) believe electronic machines would increase visitation and attract younger members.
Nebraska sports betting proposal passes committee: Nebraska sports betting is on the move after the General Affairs Committee passed an amended version of Sen. Eliot Bostar’s proposal (LR3CA) in a 5-2 vote on Monday, setting up a potential floor debate. The amendment requires enabling legislation to pass in 2025, should the voters approve the measure. And that assumes the legislature moves forward with the bills during the current special session.
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Massachusetts Online Casino Efforts Could Begin in 2025
A Massachusetts lawmaker is calling online casino legalization “the next logical step” in the state’s sudden embrace of legal gambling.
“We did casinos, we did sports wagering, we did iLottery,” MA State Rep. David Muradian told Play USA. “The logical progression is to look at how we can potentially legalize iGaming, especially when our neighboring states of Connecticut and Rhode Island are already doing it.”
Muradian told Play USA he would base his legislation on the model legislation being prepared by the National Council of Legislators from Gaming States.
A significant hurdle is Muradian’s party affiliation. He is a Republican lawmaker in an overwhelmingly Democrat legislature (133 Democrats and 25 Republicans). As such, he expects online casinos to be a multi-year process and views his legislation as a conversation starter.
The state’s recent successes present another obstacle that could also spell doom for online casinos.
As I wrote in the August edition of The Ruddock Report for Casino Reports:
“The legislature’s decision to legalize online lottery, including e-Instant games, almost certainly creates a new hurdle for online casinos. After a decade of pleading by lottery officials, the legislature finally authorized the lottery to offer online games through the state budget. The argument that appears to have won over lawmakers was the lottery’s claim that there has been cannibalization of lottery sales following the introduction of mobile sports betting.”
DK Surcharge: Is the Juice Worth the Squeeze?
DraftKings surcharge would net the company $270 million in revenue annually, per research from Eilers & Krejcik Gaming (a newsletter sponsor). That number, $270 million, is more than many operators’ total GGR and nearly on par with Fanatics and ESPN Bet.
“It is our initial attempt at a broad-strokes investigation of the opportunity and does not account for major unknowns,” EKG notes. “Including potential player attrition and state attempts to tax surcharge revenue.”
A lot has been made of the expected surcharge in Illinois, which would be just over 3%, but to bring its tax rate down to 20% in New York, DraftKings would have to institute a very bawdy 7% surcharge.
EKG also believes (as do I) that the planned rollout in January 2025 will get scrapped if other operators (specifically FanDuel) do not follow suit or if, as I mentioned in yesterday’s newsletter, “states chafe at the potential for lost tax revenue.”
Per EKG, “DraftKings management could and likely will face considerable pressure from policymakers, investors, and media to drop the idea.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
We should find out if the Missouri sports betting initiative has qualified for the November ballot today.
All signs point to yes, but as previously mentioned, some unexpected opposition to the measure could tip the scales from pass to fail — current polling points to the measure passing by a slim margin.
Stray Thoughts
The Talking Shop Podcast will return this week with Ryan Butler, a Senior Editor at Covers.com and one of the top reporters in the gambling industry.
Ryan and I chat about various topics, from covering the industry and his strong Twitter/X presence to what the legalization landscape looks like for the rest of 2024 and beyond (SPOILER: it isn’t pretty) to the implications of the DraftKings surcharge.
The episode will be available to all on Saturday. You can upgrade to a paid subscription if you’d like early access (Wednesday).