The Gambling Decision Desk
The Gambling Decision Desk
Several states will vote on gambling tomorrow, including Missouri, where voters have the opportunity to legalize mobile sports betting.
The Bulletin Board
NEWS: A look at where gambling is on the ballot tomorrow.
WEEKEND CATCHUP: AGs Talk Sweepstakes and the Reverse Job Board.
VIEWS: Will election betting disrupt the sports betting hierarchy?
NEWS: Two significant news items from the UK and France.
AROUND the WATERCOOLER: The PR battle rages on.
STRAY THOUGHTS: The Forecast is officially live, sign up today.
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Gambling on the Ballot in Several Locales Tomorrow
A presidential election cycle is bigger than gambling, but this is a gambling industry newsletter, so here are a few of the things that should be decided at the ballot box tomorrow:
Missouri sports betting, yeah or nay?
Things are trending positive for the Missouri sports betting ballot initiative. While I’m hearing a narrow victory, and I won’t take any outcome off the table, I suspect support might reach 54-55% when the votes are counted.
As I wrote last week, recent polling had support at 52%, and the opposition pulled their ads in the final weeks of the election cycle.
Who will head up the Department of Interior?
Gambling is usually a state issue, but the presidential election could shape the future of tribal gaming for years to come.
The Biden administration has been a welcome relief for tribes, with Interior Secretary Deb Haaland siding with tribes on numerous issues, including the Florida mobile betting compact, several land-in-trust disputes, and the new rules from the Bureau of Indian Affairs.
The Donald Trump administration was not seen as friendly to tribes, starting with Department of Interior Secretary Ryan Zinke, who clashed with tribes on environmental issues. Trump’s tribal animosity dates back to his casino days, when he made several inflammatory comments about tribal gaming.
“A lot of these reservations are being, in some people’s opinion, at least to a certain extent, run by organized crime and organized crime elements,” Trump said in the 1990s. “There’s no protection. There’s no anything. And it’s become a joke.”
Other ballot measures include casino projects in Missouri, Virginia, and Arkansas and sports betting tax revenue disbursements in Colorado, as the state hopes to lift the cap on the amount of revenue that can go to water conservation projects.
Weekend Catchup: AGs Talk Sweepstakes and the Reverse Job Board
Impending action on sweepstakes: Howard Glaser relayed an excerpt from an Attorney General Alliance report of their recent working group panel on illegal online gaming: “Panelists also noted the rise in unlicensed "Sweepstakes" gaming models and their evolving attempts to circumvent state gambling prohibitions. The potential application of federal and state gambling laws to electronic payment processors was raised. Ultimately, panelists concluded that existing regulatory regimes can be applied to these modern offerings and that collaboration between regulatory authorities and industry is essential to combatting illicit gaming.”
The Reverse Job Board: Duston Gouker’s Closing Line substack started a terrific project to help those affected by the recent affiliate layoffs (and beyond): a reverse job board. Dustin has over 100 entries looking for work in various fields.
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Is Election Betting the Real Disruptor?
As I said in the Weekender edition of the newsletter, don’t sleep on election betting.
In a LinkedIn post, Chris Grove mentioned Robinhood's entry into the election betting market (a story STTP covered last week).
As Grove posted:
“As of this week, Robinhood is a betting site. Some might argue that it's always been a betting site, but the launch of election markets moves it firmly into territory historically occupied by sportsbooks.
“What does that mean for U.S. online market participants like BetMGM, Caesars, DraftKings, Fanatics, FanDuel, and Hard Rock?”
Grove pointed to Robinhood's potential advantages, noting that it’s available in every state, and “as of 2Q24, Robinhood had 24.2 million customers with funded accounts and 11.8 million active monthly users. Two million of those users pay a subscription fee to access premium features under Robinhood Gold… For reference, FanDuel reported 3.46 million monthly users during 2Q24.”
During the company’s Q3 earnings call on October 30, Robinhood CEO Vlad Tenev said the company’s “infrastructure behind futures has also enabled us to offer event contracts, including our new presidential election market that we launched.”
Tenev said customers quickly engaged with the product, “trading over 10 million contracts in the first full day and on track to more than double that today.”
Grove also believes “Robinhood will absolutely not stop at election betting.”
“The brand is strong; the user base is large, predisposed to betting, and has billions on deposit; the corporate core competencies are cross-applicable; and the financial incentives are aligned. A new warrior has entered the ring.”
Tenev’s comments on the earnings call align with Grove’s opinion:
“I'd say, overall, as a philosophy, we want to make all product categories available for customers over time, particularly for active traders. We want Robinhood to be associated with sort of being at the frontier of innovation and technology in financial services… We believe that if any tool or any instrument is available for institutions, then we have to make it available for retail as well.”
Dispatches From Across the Pond
There are two significant developments occurring on the online gambling front in the UK and France. These developments deserve attention from my US audience, as both topics — tax rates and iCasino legalization — are playing out in the US.
First, as covered recently, there was the possibility of a hefty tax hike on UK online operators. That never came to pass, but the industry isn’t out of the woods just yet.
STTP THOUGHTS: This is perhaps the one area where the US will keep up with its European counterparts, considering Ohio and Illinois raised their tax rates last year.
The Autumn Budget didn’t raise taxes, but it did say there could be an “aligning” of the country’s disparate gambling tax rates in 2025:
“5.107 Remote gambling duty reform – The government will consult next year on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through a three-tax structure. This will aim to simplify, future-proof and close loopholes in the system.”
That raises the question, does aligning the tax rates into a single tax include raising the tax rate?"
According to the Jefferies team, the alignment “infers” a tax increase, which Jefferies and other industry watchers believe will land somewhere around 25%.
Meanwhile, across the English Channel, in France, an effort to authorize online casino gambling was eventually scrapped from the 2025 budget, setting the stage for discussions in 2025.
According to Jake Pollard (my go-to source for any gambling news from France), “Casinos de France, the trade body representing the country’s 200 French land-based casinos, has told Gaming&Co that it is looking forward to discussing online casino regulations when it meets with the government next week, and reiterated its call for the country’s physical casinos to be given priority to operate the vertical digitally.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
Last week, in response to a report in The Lancet, I wrote that the gambling industry is losing the PR battle over the social harm caused by gambling vis-a-vis the industry’s positive impact.
SBC America’s Jessica Welman also wrote and opined about the Lancet Commission’s findings/recommendations:
I received a number of private messages from people who agreed with my sentiments, and later in the week, Regulus Partners issued a note making a similar case.
Per Regulus Partners, who masterfully picked apart the Lancet report but cautioned, just as I did, that the industry needs to take it seriously:
“The Lancet Commission reflects an existential threat to the licensed gambling industry, in our view - and one that cannot be outrun by turning to 'emerging markets' (a response that serves to reinforce the parallels with Big Tobacco). It demands a response that is intelligent, honest, ethical and coordinated on a global scale (and not simply a public relations campaign). For the global gambling industry, recognition of the seriousness of the long-term threat articulated in the Lancet report is a critical first step.”
“Those talking points and headlines are brutal. They are knockout blows in the PR fight. Meanwhile, the industry seems content on weathering the storm, as it focuses on pumping up the good and spinning anything negative into a positive. The industry might be correct, but that’s neither here nor there in the court of public opinion.
“[…]
“If the industry thinks denying it oxygen will make the problem go away, it is sadly mistaken — at least in my opinion.”
Stray Thoughts
The first installment of The Forecast went out to premium subscribers today. The initial Quarterly Report clocked in at 15 pages, and provides a comprehensive look at the current state of online gambling in the US and what 2025 has in store.
In addition to the Quarterly Reports, subscribers will receive a weekly update on legislative efforts in online casino, poker, and sports betting. The cost is $50/week (paid annually).
If you’d like to subscribe, you can fill out the contact form on my website.