All It Takes Is A Nudge

All publicity isn't good, especially if you're trying to stay off the radar of decision-makers that can take your product offline.

Oct 30, 2024

VIEWS: It’s only illegal gambling if someone cares about it.
NEWS: Will the NCLGS Sweepstakes Panel tread new ground, or will it be more of the same?
NEWS: Seminole Tribe’s mobile betting offerings are here to stay.
VIEWS: Robinhood the latest entry into the election betting market.
AROUND the WATERCOOLER: Colliding narratives.
STRAY THOUGHTS: Defense doesn’t win fights.

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Elon Musk’s Petition + $1M Giveaway: A Cautionary Tale

Sweepstakes sites are illegal gambling! That’s what some pockets of the industry are screaming to anyone who will listen. But is anyone listening?

Consider how quickly Philadelphia District Attorney Larry Krasner went after Elon Musk’s free speech and gun rights petition, which also comes with a cash incentive in some states, including entry into a daily $1 million prize for anyone who signs the petition and is a registered voter in certain swing states.

Krasner filed a civil lawsuit in the Philadelphia County Court of Common Pleas to halt the giveaways. The lawsuit states, “America PAC and Elon Musk are running an illegal lottery in Philadelphia (as well as throughout Pennsylvania).”

As CNN reports, “The case is based on Pennsylvania’s lottery and consumer protection laws. Krasner said his lawsuit was not about state and federal laws that prohibit vote-buying.”

So, setting aside the election laws, the illegal lottery aspect stems from the belief that the entrants’ personal information is the consideration since there isn’t an entry fee:

“America PAC and Musk are lulling Philadelphia citizens – and others in the Commonwealth (and other swing states in the upcoming election) – to give up their personal identifying information and make a political pledge in exchange for the chance to win $1 million.”

Two things interest me here:

First, if Krasner believes signing a free petition is illegal gambling, shouldn’t he also have some interest in the more overt pay-to-play products available in the state?
Second, as the newsletter title says, it only takes a nudge. If the right person takes (negative) interest in what you’re doing, things can go south really fast.

Bottom line: Sunlight may be a terrific disinfectant, but if you’re offering a product that falls into a legal gray area, it’s best to stay off everyone’s radar.

NCLGS to Host Sweepstakes Panel at Winter Meeting

While California tribes muster support to take on the sweepstakes industry, the National Council of Legislators from Gaming States (NCLGS) Winter Meeting in New Orleans this December will gauge the mood within statehouses and regulatory bodies.

Based on the session details, they aren’t looking at the sector favorably:

Ed McMahon and his big sweepstakes checks won’t be coming to your door anytime soon. But the unlicensed and unregulated online “sweepstakes” casino market in the United States – now making billions of dollars with the advertising on TV, radio, and social media to match – is already at your door.
The legal, licensed gaming industry and state regulators have taken notice, and there are important implications for taxation, responsible gaming, the value of a gaming license, and more.

The panel, dubbed “This Ain’t Your Grandad’s Sweepstakes,” will be chaired by Oklahoma Representative Chris Kannady and will include:

William M. Gantz, Partner, Duane Morris
Howard Glaser, Global Head of Government Affairs and Legislative Counsel, Light & Wonder
Andromeda Morrison, General Counsel, Ohio Casino Control Commission
Tres York, Senior Director of Government Affairs, American Gaming Association

Glaser is as anti-sweepstakes as they come, and I suspect Morrison and York will fall on the “I have questions” side of the debate.

Gantz appears to be representing the pro-sweepstakes side of the argument, as he recently spoke to Next.io, saying:

“When you hear all of these people criticizing freemium games which have added sweepstakes, not one of them has expressed the legal analysis for their opinion that it’s gambling, and they have assumed that the freemium side of the platforms is not genuine.
“The stated concern that the freemium plus sweepstakes platforms are unlicensed, unregulated, and untaxed applies equally to the hundreds of platforms providing freemium only, which alone is a $10bn market a year.”

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Seminoles and West Flagler Reach an Agreement

The Seminole Tribe can breathe a sigh of relief (not that there was much threat remaining) as it has reached an agreement with West Flagler Associates and the Bonita-Fort Myers Corp., who started the multi-year legal fight over the tribe’s sports betting operations.

West Flagler ran out of runway in federal court, as the Supreme Court chose not to take the case. West Flagler could have resurrected its state court case, but the new agreement assures that will not happen.

As part of the agreement, West Flagler and Bonite-Fort Myers will end all litigation against the tribe’s gaming operations in exchange for the Seminole Tribe adding Jai Alai to the Hard Rock Bet app.

“This is truly a win-win agreement for the Seminole Tribe and West Flagler,” Jim Allen, CEO of Seminole Gaming, said in a press release. “This agreement establishes a relationship of collaboration among the Seminole Tribe and West Flagler in the State of Florida. Rather than engaging in years of additional litigation, this agreement will allow the parties to work together to promote Jai Alai, which has played an important role in Florida’s gaming landscape for nearly 100 years.”

Robinhood Latest Entry Into the Election Betting Markets

The election betting market space is growing increasingly crowded:

As Robinhood cofounder Vlad Tenev tweeted:

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Around the Watercooler

Social media conversations, rumors, and gossip.

“I know it when I see it.”

“If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.”

As Steve Brubaker said in response to the following tweet, “If this isn't gambling, why the 1-800-GAMBLER bit at the bottom?”

STTP Note: I believe this is an Action Network advertisement and not from a sweepstakes site.

After checking out social media posts and advertisements, I noticed that some sweeps operators include RG messaging, and some don’t. But they all seem to have RG areas on their websites — this is from one sweepstakes website’s responsible gambling page:

Further, facing criticism from the industry, sweepstakes sites are boasting about their RG policies. As Jay Kaplowitz, the CEO of sweepstakes poker site Clubs Poker, said during an October webinar:

“From a responsible gaming perspective, we have very robust tools to ensure responsible gaming and provide people with the option to set purchase limits, time during the day where they can play limits, and self-exclusion tools for a day, ten days, or forever.
“Our platform provides what we call a reality check. If you've been playing for more than an hour, we proactively send you a popup to encourage you to take a break and potentially look at some of our responsible gaming tools.
“We take this very seriously and believe we have some of the best-in-class RG tools out there.”

As I said on Tuesday about online casinos, this is a PR battle, and these “colliding narratives,” as Jamie Salsburg termed it on X, are a difficult circle to square.

Stray Thoughts

In yesterday’s newsletter, I discussed the gambling industry unwittingly being in a PR fight and the need to hit first.

In an August column, I mentioned Royce Gracie’s approach to combat:

“During an appearance on the Joe Rogan Podcast, the multiple-time UFC champion said his fighting philosophy was not to win; rather, he was focused on not losing. Let your opponent make the mistake.
“Royce explained it in terms of a ping-pong game: no matter what you do, you just put the ball back in play. “I’ll win when you don’t put the ball on the table.”
“If I don’t make a mistake, we are going to play forever,” Royce said. Royce would wait patiently until his opponent made a mistake, at which point he would capitalize.”

These two concepts work well together. It may sound like Royce is advocating for playing defense, but he’s not; he’s constantly threatening.

If you only play defense, you will be the one who eventually makes the mistake. To get your opponent to make the fight-ending mistake, they need to feel threatened.