Prepare For Liftoff

The real reason the industry should be concerned about DraftKings eyebrow raising partnership with Delta has nothing to do with the product or a competitive advantage.

Jan 13, 2025

THE LEDE: DraftKings’ partnership with Delta kicks off another round of public backlash against sports betting’s everywhereness.
WEEKEND ROUNDUP: Quote of the Week and Good Reads.
NEWS: CFTC Chair resigns: Good or bad news for prediction & crypto markets?
NEWS: Paris card clubs forced to close after budget rejected; Is help on the way?
AROUND the WATERCOOLER: Alabama Senator leans negative on gambling.
STRAY THOUGHTS: recent and future podcast episodes.

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The Lede: DraftKings + Delta Pushes the Envelope

One of last week’s hot topics on social media was the news that DraftKings is partnering with Delta (yes, the airline) for some sort of in-flight offering.

While the details on how this arrangement will work are scant (federal aviation laws prohibit real-money gambling), the real story is the reaction.

Some responses were funny:

Others are more telling, as they indicate the industry isn’t simply providing opponents with ammunition; they are driving away former supporters:

The partnership is likely a nothing-burger (at least given the current laws). Still, it provides yet another attack vector for legal sports betting’s many detractors and is turning off somewhat supportive-of-legalization voices. I think the question many lawmakers and the general public are starting to ask is, “When is enough, enough?”

Mind you, this comes on the heels of the announced DraftKings parlay subscription service.

As I’ve been ~~saying~~ shouting, the narrative is slipping away from the industry, which is inviting criticism and could lead to some very hostile actions from state regulators and possibly the federal government.

Jamie Salsburg said it best with his Jurassic Park meme: just because you can do something doesn’t mean you should. And I’d add that some operators have never learned that you need to learn how to walk before you run.

Weekend Roundup: Quote of the Week and Good Reads

Quote of the Week: “Of the subset of New York, Ohio, Illinois, Indiana, Maine, and Maryland, we believe Ohio and Maryland have the best prospects for near-term (2025) success, though we believe the most likely scenario is 2025 being void of newly legalized states. We see New York and Illinois, the two largest states in the discussion, as having the slimmest odds of success.” ~ Deutsche Bank’s Carlo Santarelli

Good Reads: STTP recommends some articles from around the internet.

The Takeaway: So You Can Bet On The California Fires At Polymarket ~ Dustin Gouker, The Closing Line
Fanatics ready to take big swings in 2025 after rewarding 2024 ~ Tom Nightingale, SBC Americas
I got divorced because of sports gambling ~ Charlotte Cowles, The Cut

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News: CFTC Chair Resignation Delights Prediction and Crypto Advocates

The resignation of US Commodity Futures Trading Commission Chairman Rostin Behnam is being touted as good news for election betting (and crypto), as Behnam has been a vocal critic of prediction markets.

In May, Behnam said:

"Contracts involving political events ultimately commoditize and degrade the integrity of the uniquely American experience of participating in the democratic electoral process. Allowing these contracts would push the CFTC, a financial market regulator, into a position far beyond its Congressional mandate and expertise. To be blunt, such contracts would put the CFTC in the role of an election cop."

More recently, he told Bloomberg:

“We don’t believe listing event contracts on political elections is legal, but while we have this ongoing legal challenge, we’ll allow them and do what we can to protect the integrity of the markets. Whether or not there has been manipulation or fraud remains to be seen.”

Following his resignation, he told the Financial Times, “I have strong concerns around contracts related to elections, assassination, terrorism, and gaming.”

He urged his successor to focus on the issue and bring clarity to what is and isn’t permissible, telling the FT, “You still have a large swath of the digital asset space unregulated in the US regulatory system.”

However, his resignation is only positive for prediction markets if Behnam’s successor has an opposing view of prediction markets and crypto.

I’m seeing a lot of reporting intimating that because Trump surrogates have praised election betting markets being more accurate than polls (a debatable point), the incoming administration has favorable views of these products. I would caution that Trump is known to praise anything that favors him, and while it could influence policy, I’m not willing to go that far — What happens to that praise if these same markets are negative for Republicans during the mid-terms? I’ll offer some deeper thoughts on federal action in this week’s feature column.

Further, as I previously noted, and evidenced by Crypto.com’s increasing number of sports markets on offer and some operators offering markets on the California wildfires, “The gray industry is definitely in a "push" phase (and seemingly from every direction imaginable), but eventually someone pushes back... Or not.”

Frankly, everyone should be in wait-and-see mode until the next chairman is selected.

News: Paris Cardrooms Shuttered; Government in Disarray

Paris gambling halls remain shuttered after forced closure on December 31.

As STTP previously reported (relying heavily on the excellent reporting of Jake Pollard), the political tumult in France has left the country somewhat rudderless.

An effort to legalize online casinos (which was shelved for 2024) and a vote in the Senate to increase tax rates on soft drinks, tobacco, and gambling are up in the air as the country awaits its next election, which can’t happen until July.

As Jake Pollard reports:

“France’s online gambling sector is waiting to see who President Macron will appoint following Prime Minister Michel Barnier’s resignation yesterday after his government became the first to lose a confidence motion since 1962.”

As noted above, the political fallout has also impacted existing gambling halls. Per Jake Pollard, “Paris’s gaming clubs were forced to close on 31 December due to Michel Barnier’s government being brought down over MPs’ rejection of the country’s 2025 Budget, the establishments’ employees are currently “partially unemployed,” and the government has agreed to pay them 60% of their salaries.”

The larger operators have agreed to kick in the remaining 40% of employee wages, and there is some hope a budget can be hashed out when the government returns on January 13.

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Around the Watercooler

Social media conversations, rumors, and gossip.

There’s been a lot of early chatter about gambling expansions in Alabama (here and here).

The latest was Alabama State Sen. David Sessions, who was a guest on FM Talk 106.5 and didn’t mince words about his views on the usefulness of gambling revenues for the state:

“It's not a good way to fund government, and the economy turns bad again, and it will because those things cycle — it's not a necessity, and if people are smart, they won't be spending their power bill money on lottery tickets and gambling."

Sessions went on to say that he’s all for letting the voters decide, but (there’s always a but, “If we send something to the people to vote on, it needs to be something that's good for the state of Alabama, and not something that's just good for the gambling interest for the sake of having money in the government to fund government."

You can find the full interview here.

Stray Thoughts

Looking ahead, this week’s podcast guest is John Pappas, who stopped by to chat about sports betting and online casino legalization efforts — that episode will drop on Saturday.

Last week, I had Chris Shreeve, the cofounder of Staked AI, as my guest. We chatted about the industry and an AI-driven future—you can find that episode here.

If you haven’t listened to it yet, I highly recommend my recent podcast with Kim Lund. The podcast focused on sweepstakes and is one of my favorite chats to date.