A Long Road Ahead
Ohio has been creeping into the online casino conversation, but a recent meeting to discuss gambling expansions point to a canyon-sized divide amongst stakeholders.
The Bulletin Board
NEWS: Ohio casino operators are not on the same page when it comes to online gambling.
BEYOND the HEADLINE: Stakeholders are split over online gambling.
LEGISLATIVE UPDATES: Mississippi conference committee will decide mobile betting’s fate; What went wrong in Alabama.
VIEWS: With online casino legislation running into roadblocks, is it time for a new approach to online poker legalization?
NEWS: Jackpocket’s New Jersey online casino numbers are growing.
AROUND the WATERCOOLER: Sports betting’s My Cousin Vinny problem.
STRAY THOUGHTS: I was VERY wrong about this one.
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Ohio Stakeholders Divided Over Online Gambling
Ohio isn’t technically an online casino candidate, but it is on many people’s shortlists.
To demonstrate its seriousness, the state put together a study commission to explore potential gambling expansions. But when the Study Commission on the Future of Gaming in Ohio met last week, let’s just say there was a divide over online gambling in Ohio.
On one side is PENN Entertainment, which told the study commission it supports legalized online gambling and sees it “as a key catalyst for growth as it can be complementary to existing brick-and-mortar businesses and drive gaming and associated tax revenue.”
On the other hand, JACK Entertainment opposes online casinos, with JACK Entertainment’s Dan Reinhard pointing to a controversial report commissioned by the state of Maryland and prepared by the Innovation Group (TIG) that raised cannibalization concerns.
As I mentioned at the time, the 10% cannibalization finding from the report will be a constant nuisance in and out of Maryland. Reinhardt mentioned it in Ohio, and the report was also brought up in Mississippi.
Per reporting from News 5, Reinhardt told the commission:
"iGaming is a threat to Ohio businesses and Ohio employment.
“Gaming dollars are no different than any other market. No matter what study is presented, online consumption eats away and eventually devours retail business through diminishing dollars for the local economy.
"Look at any of our local malls. Look at our empty storefronts. When the younger generation becomes accustomed to online shopping, online this, online that, retail suffers.”
Reinhard later told News 5 that once people get a taste of online, it’s a bell that’s tough to unring.
Beyond the Headline: Stakeholder Divides
Divisions among casino stakeholders are becoming increasingly common as online casino conversations are broached in new locales.
Maryland was unable to get all of its casino operators on board with its online gambling proposal (STTP was told 2 to 3 casinos were against it), and the bill was eventually shelved. The same divisions were seen in Mississippi earlier this year.
These differences of opinion aren’t going to disappear as regional casino operators continue to fear the impact of online gambling, and no amount of cajoling is going to change that.
As I recently wrote, “Most land-based markets are mature, with established pecking orders and fragile ecosystems. When you introduce something as significant as online casinos, the ecosystem and pecking order will change. Not everyone will benefit, and many casinos fear they will be on the losing end.”
Or, as Chris Grove noted, cannibalization “is still a very powerful issue with local operators and politicians. The question of whether or not it should be is not persuasive to them. Nor are they especially inclined to consider a 10+ year horizon.”
Or, as Wynn Resorts CEO Craig Billings said not too long ago, “No matter which side of the “cannibalization vs. no cannibalization” debate you are on, assuming that the (positive or negative) impact will be uniformly shared by all regional casinos is pretty naïve.”
Legislative Updates: Mississippi and Alabama Sports Betting Headed to Conference Committee
Legislative machinations: In a last-ditch effort, Mississippi mobile sports betting is heading to a conference committee after the Senate removed every trace of sports from a mobile betting bill passed the House. The unusual move means the bill was passed in both chambers, but with no trace of sports betting in the Senate version, the House can’t concur. That leaves working out a compromise in the hands of a conference committee. To increase support, sports betting supporters are dangling a carrot: a prohibition on new casinos.
Alabama gambling is low on trust: Alabama Political Reporter columnist Josh Moon penned an opinion piece explaining where Alabama’s efforts to legalize casino gambling went sideways. It has to do with a “trust us” guarantee. Moon writes, “But when the final version hit the floor, there was one thing missing—a guarantee in the bid process that protected Alabama-based operators, including the Poarch Creeks.”
Key Alabama lawmaker is bearish on chances: Gambling expansion is going to be an uphill battle, according to Alabama State Sen. Gregg Albritton: “My concern is that we have such huge differences between what the House passed and what the Senate passed and then where that middle ground is. We’re going to have to get a 60% vote in both houses again. All of those are uphill battles. It’s going to be difficult.”
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A New Approach to Online Poker Legalization
John Pappas recently joined the Pokerfuse Podcast to talk all things poker and touched on why legal online poker hasn’t spread across the US.
Basically, there’s no appetite for online poker legislation as it doesn’t have the revenue punch of sports betting or online casinos. And on the other side of the coin, bundling it with online casino legislation hasn’t worked because online casinos come with fears of land-based cannibalization (see above) and social harm.
As Pappas noted:
“Part of the problem that we’re facing right now for iGaming expansion is that lawmakers are saying, “Okay, well, we just legalized online sports betting, and I’m hearing all these reports of increase in addiction rates, increase in calls to the problem gambling hotline. What does it mean if I do iGaming? Is it going to become even worse?”
“For state lawmakers to want to do this, there have to be some dollar figures behind it, and I just don’t think the dollar figures are that compelling for poker alone. When you look at the full iGaming ecosystem, online slots is about 80% of the revenue, and then table games is probably about 18% of the revenue, and then poker is about 2%. It’s going to be a hard sell for poker on its own.”
I fear that poker missed an opportunity to bundle itself with sports betting legislation, which may be on the table in the states that have yet to legalize sports betting. Kentucky flirted with this idea but eventually scrapped it in favor of a clean sports betting bill. However, Kentucky also lacks land-based casinos that might be interested in offering online poker alongside sports betting.
Or, perhaps it’s time for another option that has yet to be tried: poker players to start organizing and put the issue on the ballot in the 26 states that allow citizen-led referendums.
Jackpocket Online Casino Proving its Mettle
Another podcast episode worth relaying was a recent discussion between Jackpocket’s VP of Interactive Gaming, John Worthington, and Brad Allen of the Eilers & Krejcik Gaming Zero Latency Podcast (a newsletter sponsor).
Worthington said the company’s recent growth in New Jersey was from cross-selling with email pushes, casino icons in the lottery app, and co-branding with the lottery. According to Worthington, the key was to make it as easy as possible to switch between the lottery app and the Jackpocket casino app and vice versa.
The cross-sell is hard to miss in New Jersey.
Per the EKG Line Newsletter, In February, the Jackpocket casino app “generated $802k in GGR, which was roughly 4x its Jan-24 total and 5x its Dec-23 total.”
Even though Jackpocket’s tally accounted for just .5% of total GGR in the state, it bested several more established brands, including Stardust, Harrah’s, PokerStars, bet365, and Tipico, per EKG estimates.
As DraftKings CEO Jason Robins said during the company’s earnings call, massive lottery jackpots are similar to tentpole sports events, and recent 10-figure jackpots may be helping the Jackpocket cross-sell numbers, something Worthington brought up during the podcast.
When asked if it’s “proving the model” in New Jersey, Worthington said, “We’re seeing the model work. Our primary source of acquisition is lottery customers who cross over to the casino.”
Worthington also said West Virginia, where the Jackpocket lottery app is already available, is the next opportunity for Jackpocket, but also name-checked Pennsylvania.
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Around the Watercooler
Social media conversations, rumors, and gossip.
The sports betting industry already has a number of scandals and controversies on its plate, and now, per reporting from 404 Media, we have one more to add to the list: money laundering.
The legal US sports betting industry must feel a little like Vincent LaGuardia Gambini right now.
“I swear to God, I do not need this right now, okay? I've got a judge that's just aching to throw me in jail. An idiot who wants to fight me for two hundred dollars. Slaughtered pigs. Giant loud whistles. I ain't slept in five days. I got no money, a dress code problem, *and* a little murder case which, in the balance, holds the lives of two innocent kids. Not to mention your… *biological clock* - my career, your life, our marriage, and let me see, what else can we pile on? Is there any more *shit* we can pile on to the top of the outcome of this case? Is it possible?”
Stray Thoughts
Yesterday was the 13th Anniversary of Black Friday when the Department of Justice shut down the largest online poker operators and forever altered the online gambling landscape in the US. According to Facebook Memories, this is what I posted:
“I have a feeling my poker writing will not be in high demand anymore.”
I seriously considered a career change as I assumed this was the end. I was very wrong about this. Many writers exited the industry on Black Friday, but I stuck around, and I’m glad I did.
If you’re looking for a Black Friday retrospective, Pokerfuse conducted a series of interviews with:
Industry Insiders: Eric Hollreiser, Mason Malmuth, Jeff Ifrah, and Alex Scott
Brand Ambassadors: Kara Scott, David Lappin, Chris Moneymaker, and Daniel Negreanu
Poker Media: Barry Carter, Kevin Mathers, Michael Gentile and Remko Rinkema