Foot In The Door
An Arkansas casino wants the state to authorize online 50/50 raffles, but its also beating the drum for full online casino gambling.
The Bulletin Board
NEWS: In an attempt to get their foot in the door, online gambling supporters in Arkansas push for authorization of online 50/50 raffles.
WEEKEND CATCHUP: Affiliates like sweepstakes; Penn adds to its Social Casino offering: BetFred mulls complete US exit.
NEWS: FanDuel founders filed an amended complaint against private equity firms that “undervalued” the company during its 2018 sale.
VIEWS: The Massachusetts Gaming Commission has set a meeting deadline on limiting bettors; it “expects all sportsbooks to attend.”
AROUND the WATERCOOLER: Notre Dame nukes its men’s swimming program (for one year).
STRAY THOUGHTS: Is sweepstakes the new DFS 2.0?
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Online Casino Watchers Should Keep an Eye on Arkansas
Arkansas legalized mobile sports betting in 2022, and because of the way the law is written, there is a strong argument that regulators can authorize online poker and, potentially, casino games without new legislation.
As Carlton Saffa, CMO at Saracen Casino Resort, told Gambling.com in April, he believes regulators can also authorize online casino games by expanding the language of 006-06-19 Ark. Code R. § 5 to include internet casino games in addition to online poker.
“A solution exists by amending ARC Rule 5, which already authorizes online poker, to include other types of table games and slots,” Saffa told GDC.
That effort didn’t gain any traction, as regulators dismissed the idea, saying their top priority was a land-based casino project - I’ll leave it up to the reader to determine if that is the entire story.
Now, Saffa is trying to persuade the state to authorize another form of online gambling, this time in support of NIL.
“Saracen Casino is hoping to legalize a type of online gaming (50/50 online drawings, or raffles), and they want to use the money from that to help college athletes across the state,” THV 11 reports.
Saffa explained the proposal on X, noting the availability of illegal operators and the need to keep the money in the state:
“We already have online gaming in Arkansas. What he calls sketchy, law enforcement has referred to as organized crime. Saracen’s proposal for all Arkansas casinos does this and helps NIL. Win-win.”
However, not everyone agrees, and that has led to a very public spat between Saracen and one of its rivals in the market, Oaklawn, which opposes Saracen’s NIL plan:
Saracen is highlighting the lack of funding for NIL programs and shutting down illegal operators. Considering their online casino efforts earlier this year, it’s hard to ignore the possibility that an online 50/50 raffle is the first step to online slots and table games.
Saffa appeared on a local radio show and said all businesses need to consider what is around the corner. At Saracen, “we are deeply concerned about the illegal casino apps that are live in our state.”
Weekend Catchup: Affiliates Like Sweeps; Penn Adds to Social Casino Offering; BetFred Considers Full US Exit
Catena eyes sweepstakes: Manuel Stan, Catena Media’s new CEO, outlined the affiliate company’s new strategy during its earnings call last week. The new approach focuses on gray market sweepstakes sites, which now account for 1/3 of Catena’s casino revenues. “Our current priority is to diversify the product portfolio and revenue streams to reduce their reliance on market launches,” Stan said. we see this [sweepstakes] as the fastest-growing vertical for us, and we expect it to continue growing… Our products are focused on growing the sweeps vertical.” Stan noted that the strategy is two-fold: Capitalize on a growing vertical and build a database for a post-regulation landscape.
Penn bolsters its social casino offering: Sparket scored its biggest partner to date, inking a deal with Penn Entertainment that will see Sparket provide its free-to-play and pay-to-play social betting technology to PENN Play Casino. “People want to play games with their friends, and what we’re trying to provide is gamification for all types of events and a new way to interact with those friends,” Sparket’s CEO Aaron Basch told SBC Americas.
BetFred mulls US exit: BetFred US CEO Kresimir Spajic said of the company’s US operations, “further downsizing” can be expected. The statement comes on the heels of BetFred’s exits from Maryland, Ohio, and Colorado — BetFred is active in four other states. Spajic told EGR he has faith in his team’s ability, but “The question is: Can you make a business profitable enough to make sense to continue operating in the US versus putting this effort and investment elsewhere that might yield a bigger return?”
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Will FanDuel Founders Get the Bag?
FanDuel founders scored a major legal victory a few months ago when a New York court found their lawsuit, claiming the company was undervalued during its 2018 sale, could continue (a 2022 appellate court ruling dismissed the case). That victory has led to an amended complaint against two private equity firms that the founders claim undervalued the company.
At the time, FanDuel was valued at $559 million, which was sold two years later for $4.2 billion.
As reported by Front Office Sports:
“In an amended complaint filed in New York state, cofounders Nigel Eccles, Lesley Eccles, Thomas Griffiths, Robat Jones, and Chris Stafford—along with dozens of early investors and employees—claim that board members controlled by private equity investors KKR and Shamrock “secured for themselves and other preferred shareholders 100% of FanDuel’s equity in the new merged company along with the massive return it represented.”
Nigel Eccles took to X to better explain the amended complaint after a court ruled in the founders’ favor three months ago - the original complaint was filed four years ago:
“A very brief summary: In 2018, FanDuel merged with the US arm of Flutter Entertainment to create a new company called FanDuel Group. In exchange, FanDuel shareholders received 40% of the equity in the new company. However, the board (which was controlled by private equity investors KKR and Shamrock) used a phony valuation of $559M to wipe out common shareholders (largely the founders and employees). Less than 2 years later, those same investors sold that 40% stake in FanDuel Group for $4.2B. Standing up against the likes of KKR is not easy, but I’m determined that the team of 100+ amazing people who spent years building FanDuel from the ground up will get back what was stolen from them in 2018.”
MGC Sets a Deadline for Limiting Bettors Meeting
The Massachusetts Gaming Commission is the only regulatory body investigating the practice of limiting bettors, which is good for bettor advocates. However, if this issue is near and dear to your heart, you might feel the MGC isn’t treating the issue with a sense of urgency.
After operators skipped a roundtable on the topic in May, the MGC went back to the drawing board, but an agenda-setting meeting scheduled for August 7 was canceled. That meeting to set the meeting was finally held on Thursday.
At Thursday’s meeting, the MGC announced its intention to schedule a public standalone meeting on wager limits no later than the first week of October.
Prime Sports Joe Brennan Jr. tweeted, “Give Mass Gaming credit. They didn’t do a one-off hearing. They seem quite serious about getting substantive answers from operators. Hoping to hear probing follow-up questions for rec shops’ reasoning behind this practice.”
So why the delay? At issue is the involvement of player advocates, who had complete control of the microphone after operators skipped the previous meeting. Operators have pushed back against their inclusion.
A memo to MGC Commissioners before an August 1, 2024 meeting noted, “Each Operator has since expressed commitment to have an Operator-only discussion with the Commission regarding this issue during a public meeting or round table.”
According to Bookies.com’s Bill Speros, the MGC is “considering a single split hearing, with one a conversation for operators, and another conversation with the public and RG advocates.”
Interim MGC Chair Jordan Maynard said, “I expect every operator will engage in this discussion with us.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
The news of the weekend was Notre Dame’s decision to suspend its men’s swimming team for one year after the school discovered that team members were running an internal sportsbook where they bet on their performances.
According to SI.com, no other teams, including the women’s team, are impacted. Per the review, “the staff was not aware of gambling or the scope and extent of other troubling behaviors because team members effectively concealed such behaviors from the coaches and staff through concerted efforts.”
Responsible gambling consultant Jamie Salsburg called the news a nothing burger on X, tweeting, “What’s next? Will we find out that college golfers gamble every practice round? Shock. Awe. This is a nothing burger… feel bad for the kids.”
While this has nothing to do with legal sports betting, the news does not bode well for the regulated industry. The NCAA has been raising Cain about prop bets and has now been handed (on a silver platter) another arrow to put in its anti-betting quiver.
Stray Thoughts
Sweepstakes sites have avoided the spotlight for most of their existence, but that appears to be changing. Affiliates like Catena are pointing to the opportunity, and with online casino legalization stalling and supporters looking for new talking points, the prevalence of sweepstakes is likely to become a hot-button issue.
Sweepstakes will be a hot topic in the newsletter this week and going forward. Is it the new DFS 2.0?
It made two appearances in this newsletter, with the Catena news item above and the tweet below highlighting Saracen’s inclusion of illegal sweepstakes as a reason for legalizing online gambling.
During a podcast appearance, Saffa specifically called out VGW (which operates Chumba and Luckland Casinos, as well as Global Poker) and claimed sweepstakes casinos made $3 billion in Q1 2024.