Everything Is Bigger In Texas
A new report concludes Texas sports betting could bring in $360 million in annual tax revenue and create 8,000 new jobs. But will that move the needle?
The Bulletin Board
NEWS: EKG examines the Texas sports betting opportunity.
LEGAL and REGULATORY UPDATES: Iowa’s #1 gambling priority; iCasino in AZ; Wyoming cracks down on athlete harassment.
NEWS: The progress of a Canadian sports betting ad bill has slowed in the House of Commons.
BEYOND the HEADLINE: Gaming News Canada bolsters roster.
AROUND the WATERCOOLER: Just because you can do something doesn’t mean you should do something.
STRAY THOUGHTS: Paul-Tyson numbers more robust than anyone anticipated.
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Texas Sports Betting:$360M in Tax Revenue and 8,000 Jobs
A new study from Eilers & Krejcik Gaming (a newsletter sponsor), "Legal Online Sports Betting In Texas: Revenue Forecast And Economic Impact Analysis," puts the Texas sports betting opportunity into perspective, and spoiler alert, it’s Texas-sized. The research firm estimates legalization could create 8,000 jobs and generate tax revenue in excess of $360 million annually, based on a moderate 15% tax rate.
EKG raised its GGR projections from its $2.4 billion projection in a 2023 report to $3.7 billion “… due to very strong, ongoing growth in the underlying gross gaming revenue-per-adult data we used to generate our forecasts.”
Per the report:
“For instance, New Jersey, a relatively mature market that opened in 2018, saw its nation-leading online sports betting GGR-per-adult value increase by 30% in the 12 months through June 2024.”
In its EKG Line newsletter, the firm wrote, “In a recent report, we projected the Texas regulated OSB market could generate $3.68bn in GGR at maturity, with total tax revenue across the first five years of operations of $1.1bn.” However, EKG also noted that “the political climate suggests OSB remains a longshot for legalization in 2025.”
As STTP has noted, the industry will give Texas the old college try in 2025. However, legalizing sports betting (or casinos) faces an uphill battle, with Lt Gov. Dan Patrick saying he will not consider gambling expansions without a majority of Republican support. Per reports, only three or four of the 20 Republican senators support gambling expansions.
Patrick also recently admonished the House for passing a sports betting bill in 2023 without majority Republican support.
During a podcast appearance (h/t Matthew Kredell), Patrick said:
“They say, ‘Oh, we almost passed it last session.’ You know, they almost passed it with every Democrat voting for it and about one of four Republicans voting for it. We don’t do that in the Senate.”
“The difference between the Senate and the House is we don’t let the Democrats run the Senate. We know how to work across the aisle without ceding power to the other side to let them run the Senate like Dade lets Democrats run the House. We’re a Republican state.”
Legal and Regulatory Updates: Iowa’s #1 Priority; iCasino in AZ; Wyoming Cracks Down on Athlete Harassment
Iowa casino moratorium supersedes online gambling discussion: Online casino efforts in Iowa will have to wait in line behind a more pressing issue for the state’s casinos: The expired casino moratorium. In an interview with Play USA, Iowa Gaming Association President Wes Ehrecke said, “The IGA’s focus next session will be on extending a moratorium on any new casino licenses, and all the gaming companies are unified to support this effort. If there is a successful outcome to extending the moratorium, then members can assess if and when there will ever be unified support to advance iGaming.”
Online casinos are on the table in Arizona, but 2025 is unlikely: Speaking at the Arizona Indian Gaming Association Expo, tribal lawyers Scott Crowell and Stephen Hart said what STTP has suspected for several months: tribes are interested in online casino gambling, but there is a long way to go before a deal is brokered. Crowell called online casinos a matter of when, not if, but said the tribes were looking for a better deal than they got with sports betting.
Wyoming becomes the third state to officially penalize athlete harassment: The Wyoming Gaming Commission bucked the “ban college player prop bets” trend earlier this year and has instead decided to place anyone guilty of athlete harassment on the exclusion list. As iGB reports, “The Wyoming Gaming Commission today (22 November) unanimously voted to amend its rules and put anyone found guilty of athlete harassment onto the state's involuntary exclusion list.”
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Canadian Ad Restrictions Run Into Legislative Roadblock
A Canadian bill (S-269) that seeks to create a national framework for sports betting advertisements has run into a snag in the House of Commons after passing the Senate earlier this month.
Per reporting by CDC Gaming Report’s Mark Keast, the snag is politics:
“The opposition Conservatives and minority Liberal government have been mired in this debate for two months, each blaming the other side, which takes precedence over all other House business.
“Looming over all of this is a Conservative Party leading in the polls in trying to bring down the minority Liberal government via no-confidence vote. And the next national election is on or before Oct. 20, 2025. A long backlog of House bills needs to get moving once things get un-gummed.”
So, what does S-269 do? It essentially codifies restrictions already in place and creates a national framework to regulate ads, limit the frequency and location of ads, and fund research and treatment.
As I recently summarized in an article on advertising restrictions around the globe:
Canada: Ontario revamped its advertising guidelines last year, with operators criticizing the Alcohol and Gaming Commission of Ontario for the ambiguity in the rules. That led to the AGCO issuing a clarification around the prohibitions on celebrities, current and retired athletes, cartoon characters, and influencers. There is also S-269, which is making its way through the Canadian Parliament. The bill would create a national sports betting advertising standard — Geoff Zochodne of Covers has a great report on the latest developments with S-269.
Beyond the Headline: Gaming News Canada Is Back in the Newsletter Business
Gaming News Canada will return to the newsletter business after it announced it was bringing former Play Canada Managing Editor Dave Briggs on board to put together a newsletter that will complement the Gaming News Canada podcast.
Per Gaming News Canada founder Steve McCallister, “Beginning this week, Briggs will author newsletters on Wednesday and Friday mornings (with the freedom to call the occasional audible to write on another day) and move the insightful reporting he’s done over the past month in his Canadian Content newsletter over to GNC.”
In a newsletter pot, Briggs clarified the arrangement, calling it a marriage, and said he is still looking for work and open to opportunities.
GNC has been a go-to source for the Straight to the Point Newsletter on anything Canada, and one of the saddest days for STTP was when it ceased its newsletter to focus on podcasts, which meant far more work for me to figure out what was happening North of the Border.
Briggs was part of the recent rash of layoffs that swept the gambling affiliate industry. I’m glad to see he is finding opportunities and still able to cover the Canadian market.
For updates and news from Canada, I turn to the excellent reporting from Gaming News Canada, Dave Briggs, Mark Keast, and Geoff Zochodne.
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Whether you’re looking for market research, want to raise your brand awareness, or are trying to develop responsible gaming strategies, Steve can help with honest, balanced, no-nonsense analysis of the situation.
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Around the Watercooler
Social media conversations, rumors, and gossip.
Sports betting and sports betting adjacent products are not too big to fail and certainly not too big to get kneecapped by regulators/lawmakers who are growing tired of envelope-pushing operators.
As I aptly titled this entry in the Bulleting Board: “Just because you can do something doesn’t mean you should do something.”
STTP Note: The Betr contest was free-to-play.
Stray Thoughts
I’ve talked about “spectacle sports events” before (here and here), and the numbers from the Jake Paul-Mike Tyson fight indicate that we may be moving further in that direction. As I previously said, “when certain activities are done at the highest level, they become increasingly boring,” and that’s where spectacle comes in.
Per Eilers & Krejcik Gaming (a newsletter sponsor), multiple operators said Tyson-Paul was “their biggest boxing match ever.”
According to JMP Securities:
“The Tyson-Paul boxing match ended up being considerably more impactful compared to our initial expectations. The result was a nice tailwind for handle across the industry, with books seeing handle on par to a Monday Night or Playoff Football game, while the outcome was positive for the books (+ gaming margins).”
EKG and JMP pointed to the app download numbers to highlight how big of an event the Paul-Tyson match was.
Per JMP, “Friday, the day of the event, saw the highest downloads rate since the Super Bowl in February, highlighting the customer acquisition across the industry and allowing for future cross-sell opportunities throughout the sportsbook and iCasino with new players in the database.”
However, EKG also posited that while a great NGR-generating event and despite the app download numbers, “Tyson / Paul customers are very recreational and low-value long-term—think the Super Bowl on steroids.”