DFS 2.0 Under Fire
2024 is becoming a watershed year for DFS 2.0 operators, but the biggest players in the space are shifting to contingency plans.
The Bulletin Board
NEWS: Massachusetts sends cease & desist letter to ten DFS companies; Underdog and PrizePicks alter offerings to comply.
BEYOND the HEADLINE: California tribes are willing to talk to DFS operators.
WAY BEYOND the HEADLINE: Underdog pulls Pick’ Em games in North Carolina ahead of sports betting launch.
QUICK HITTER: Maryland joins Ohio in prohibiting prop bets on individual college athletes.
LEGISLATIVE ROUNDUP: Alabama trends negative; Online casino updates in Maine and Illinois; Missouri sports betting petition; DFS bill dies in Georgia
NEWS: Virginia legislature sends skill game bill to governor’s desk.
AROUND the WATERCOOLER: The user journey.
STRAY THOUGHTS: Geeking out. A new lottery-focused website.
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MA Drops the Hammer on DFS Operators
The status of daily fantasy sports is changing on a weekly basis.
Massachusetts was already on the radar, but now it’s official: the office of the Attorney General has sent cease & desist letters to 10 DFS operators, including Yahoo, Boom, and Sleeper.
Of note, the letters were not sent to Underdog (a newsletter sponsor) and PrizePicks, who, following discussions with regulators, shifted their offerings to peer-to-peer games in the Bay State.
Both companies issued statements about the development, per Legal Sports Report:
“In consultation with the Massachusetts Attorney General’s office, we’ve moved to our peer-to-peer pick’em product in Massachusetts,” Underdog Fantasy vice president of government affairs and partnerships Stacie Stern said in a statement.
“PrizePicks has reached an agreement with regulators in Massachusetts to offer our peer-to-peer Arena game starting March 8th. We appreciate the Massachusetts regulators’ willingness to work with us to make sure PrizePicks members and fantasy sports fans have no interruptions in their access to our contests,” a PrizePicks spokesperson said.
Elsewhere in the US: Per more reporting from Legal Sports Report, Underdog has ceased offering Pick’ Em games in Mississippi. Also, PrizePicks, Underdog, and Betr have officially left the state of Florida after receiving a second cease-and-desist letter from regulators with a mandate to end operations by March 1.
Beyond the Headline: CA Tribes Will Talk with DFS Ops
In California, the California Indian Nations Gaming Association (CNIGA) said it is willing to sit down with PrizePicks and discuss DFS contests in the state - California Attorney General Rob Bonta is currently reviewing the games.
CNIGA Chairman James Siva’s comments point to a Massachusetts-esque solution after reading PrizePicks’ letter defending its games to the AG.
“I do appreciate them mentioning tribes in their statement,” Siva said. “We do have a core disagreement on the legality of the games, not all the games but the ones that PrizePicks and Betr really have used to boost their companies. Those are the games we have an issue with.”
Way Beyond the Headline: Updates in NC, MS, and FL
And then there is North Carolina: Underdog is pulling its Pick’ Em games from North Carolina, not because of a regulatory shift but because the company’s first sportsbook will go live in North Carolina on March 11. Free entry DFS contests will be available in the state.
Quick Hitter: MD Prohibits Prop Bets on College Athletes
I titled the newsletter Waiting for the Other Shoe to Drop when I reported on Ohio prohibiting prop bets on individual college athletes. Well, it dropped.
Maryland Lottery and Gaming has ordered licensed sportsbooks to stop taking bets on individual college athletes. The mandate went into effect on March 1.
As I wrote when Ohio prohibited the wagers, “The big question I have is, when does the other shoe drop? I expect more states to follow suit on player props.”
After Maryland, I expect the dominoes to fall quickly, as these are not also-ran states. Maryland and Ohio are two of the biggest sports betting markets in the country, and college player props were already off-limits in other major markets like Massachusetts, New York, Pennsylvania, Florida, Virginia, and Arizona.
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Legislative Roundup: AL Trends Negative; iCasino in ME and IL; MO Sports Betting Petition; DFS in GA
Alabama’s Retooled Bill: As noted yesterday, Alabama’s gambling expansion package has run into a brick wall in the Senate. An amended version of the bill passed by the House has been introduced, but commercial casinos and online sports betting are gone, as the measure has been whittled down to a tribal compact and a state lottery.
Maine Online Casino: After it was shelved a month ago, Maine’s online casino bill is back in play, with the Joint Standing Committee on Veterans and Legal Affairs signing off an amended version of LD 1777. the notable change was an amended tax rate, which now stands at 16%.
IL Online Casino: Online gambling is back on the table too (sort of) after Gov. J.B. Pritzker proposed raising the tax on sports betting from 15% to 35%. As Steve Brubaker put it, “Gotta love Springfield. Gov tosses a $200m grenade into the sports wagering foxhole, and icasino gets a hearing on March 6th. Smells like it’s connected. This is gonna be a fun week.” Brubaker later noted that the bill has 0 supporters and 33 opponents, including the Illinois Municipal League, which brings “the power of 8435 businesses in towns and villages and cities throughout the state getting $12m per month in local taxes.”
Missouri Sports Betting: Winning For Missouri Education, a coalition of six Missouri sports teams trying to legalize sports betting through a ballot initiative, has collected more than 100,000 initiative petition signatures. The group needs to collect at least 180,000 by May 5 - it expects to have more than 300,000.
A bill favorable to DFS 2.0 operators failed to pass through the Georgia House of Representatives on “crossover” day, all but killing its chances of passing this year - The bill could still be attached to another piece of legislation as an amendment or reincarnated with the same legislative trick sports betting used last year - the trick did not work.
Virginia Moves Fast on Skill Games Bill
Legislation that would legalize skill games in Virginia was expected to go to conference committee but was instead passed by both chambers and sent to the desk of Gov. Glenn Youngkin.
The AP reports, “The legislation was supported by a well-organized coalition that involved skill game developer Pace-O-Matic and business owners who have hosted the games and shared in their profits.”
Ronnie Jones, a vocal critic of the legislation, called it sausage-making at its best on LinkedIn:
“The winking must have come fast and furious Friday afternoon when to the surprise of many, both chambers of the General Assembly sent a final bill to Governor Youngkin. To his credit, the Governor’s office had expressed reservations over some of the provisions in the original two bills as they moved through the process. It remains to be seen whether the governor will sign off on the final version that passed last week.”
Jones wasn’t surprised, noting the letter he sent (which STTP reported on last week) had the following results: “One letter, 40 senators, 100 delegates, and 0 responses.”
Skill Games in Virginia have experienced an eventful few years.
The legislature (HB 881) authorized the games for one year in 2020 to assist small businesses during the pandemic, with an effective prohibition date of July 2021. An ongoing court case kept the machines up and running until November 2023, when the Virginia Supreme Court dismissed the case, thereby upholding the legislature’s prohibition.
This is the best article I’ve come across for anyone interested in the complete story.
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Around the Watercooler
Social media conversations, rumors, and gossip.
In a very interesting LinkedIn post, Eilers & Krejcik Gaming’s (a newsletter sponsor) Chris Krafcik outlined the user journey from the ESPN app and .com site to ESPN Bet and from X to DraftKings.
Krafcik said the main takeaway is “locating the actual starting point of these journeys was way too difficult.”
The analysis reads in part:
ESPN APP --> ESPN BET. The ESPN Bet user journey within the core ESPN app is nearly impossible to begin, as it’s buried in the Scores screen. Users have to tap a scoreline (e.g., Blues vs. Sharks) to see ESPN Bet odds and an ESPN Bet call to action (“See More on ESPN Bet”). Is ESPN Bet being buried to preserve the ESPN app’s low age rating in the app stores?
ESPN.com MOBILE WEB --> ESPN BET. There is no one-tap path to ESPN Bet on the mobile web version of ESPN.com. The user journey, although easier to find / begin vs. the core ESPN app, still feels somewhat buried in the navigation screen. ESPN Bet is the fourth option on that screen, and the ESPN Bet logo is not its typical mint green so lacks visual cut-through.
X --> BETMGM. BetMGM’s integration in X—like the ESPN Bet integration in ESPN’s core app and mobile website—feels buried. Uncovering the integration requires several taps, and when users do find it, there is no CTA (e.g., “tap to get the BetMGM app” or similar). We also note the X integration is currently for select games only (e.g., the Super Bowl).
Almost as interesting is the comment section, where several people added their thoughts or some extra contest to the EKG analysis (you can click the link in the first sentence to read the comments).
Stray Thoughts
Several members of the affiliate community recently rereleased into the wild have resurfaced with a new endeavor called Lottery Geeks. (Give them a follow on LinkedIn and X).
One of the people involved is Brett Smiley, formerly of Sports Handle, who penned a very good article on the Jackpocket-DraftKings mashup. Lottery Geeks is also talking to people who actually understand the Lottery, which is very nice to see.
The organization also added Eric Raskin this week, another stellar hire that further solidifies a strong core unit, who, given their backgrounds, will likely branch into covering casino, sports betting, and more at some point in time.
As I mentioned recently, “After reading and listening to far too much analysis and hot takes, I’m convinced iLottery is the most overlooked and misunderstood sector in the US - doubly so for the online courier space.”