Feel Good Regulations
The UK credit card ban was enacted to reduce harm, but the early results are far from conclusive, and the ban may be having the opposite effect.
The Bulletin Board
NEWS: A new report on the UK credit card ban is a mixed bag.
LEGAL and REGULATORY UPDATES: SB 549 passes in CA; Another Kentucky gambling lawsuit; Iowa online gambling efforts need a new leader.
QUESTION and ANSWER: Who will scoop up Simplebet’s flotsam and jetsam?
VIEWS: Is ESPN finally ready to (fully) embrace sports betting?
AROUND the WATERCOOLER: Research paper tackles skill in online poker.
STRAY THOUGHTS: Everyone has a plan…
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UK Credit Card Ban Not All It’s Cracked Up To Be
The National Centre for Social Research (NatCen) released an evaluation of the credit card ban in Great Britain, and the results of the 100-plus page report likely surprised many people.
The report’s summary reads (bold mine):
“However, while there was a decrease in credit card use and borrowed money use for gambling among those experiencing no reported problems from gambling and those experiencing a low level of problems from gambling, the proportion of those experiencing a moderate or high level of problems from gambling who had used a credit card in the last 12 months increased following the ban.”
What the report found is people experiencing no or low levels of problem gambling were more likely to have reduced their credit card usage. In contrast, gamblers with moderate and high levels were more likely to use a credit card for gambling after the ban.
Even though the report found positives, it didn’t achieve the credit card ban’s overarching goal of reducing harm among at-risk and problem gamblers.
So, what has the ban accomplished? It appears that the prohibition added an additional layer of responsibility to responsible gamblers and pushed bettors at moderate and high levels to find workarounds to the ban.
Some people, including myself, saw this coming from a mile off, but Jamie Salsburg hit the nail on the head in a tweet from December 2023:
When Pennsylvania proposed a credit card ban in March, Salsburg sarcastically tweeted, “Later today, I’ll be announcing my proposal to use chain-link fences to keep the mosquitoes out of my yard.”
Legal and Regulatory Updates: CA Passes SB 549; Another KY Lawsuit; Iowa iGaming Needs a New Leader
California legislature passes bill allowing tribes to sue cardrooms: Things just got very interesting in California, as the legislature passed SB 549 (a bill STTP has been closely monitoring this year). As CNIGA wrote, “This bill seeks to authorize a limited, one-time action to determine whether certain controlled games operated by commercial California cardrooms are banking card games that violate California law and infringe upon tribal exclusive gaming rights.”
Previous coverage on STTP: The backstory, Cardroom opposition, Tribal support
Kentucky resident files lawsuit against Aristocrat: A lawsuit filed with the Western District Court of Kentucky alleges that Aristocrat’s social casino games represent illegal gambling based on the state’s legal definition of gambling. “The lawsuit was brought under the state’s Loss Recovery Statute, which gives the loser of gambling games the right to recover their losses from the winner,” Next.io reports. Kentucky is a very inhospitable place for gambling operators, with Flutter paying Kentucky $300 million to settle a case stemming from PokerStars activity in the state.
Iowa needs a new online gambling champion: Iowa State Rep. Bobby Kaufmann has been the biggest proponent of legalizing online gambling. However, the industry will have to find another advocate, as the Iowa lawmaker is no longer the chair of the State Government Committee. Kaufmann recently told Casino Reports it’s not his role to introduce a study bill, which only committee chairs can do. “I could individually sponsor — and would — but it wouldn’t have the potency of a study bill,” Kaufmann told Casino Reports.
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Who Will Scoop Up Simplebet’s Flotsam and Jetsam?
As I noted last week, when the news of the acquisition was first announced, one of the unanswered questions now that DraftKings has removed microbetting tech provider Simplebet from the table is what the company’s other clients will do.
“The DraftKings-Simplebet deal is a big one; DK gets a boost from Simplebet's live/prop bet tech (which is held in high esteem in the industry) AND keeps all its competitors from accessing it; sportsbooks' margin ($) now depends on live, props, & SGPs; this makes DK even stronger.”
We are already getting those answers, as Bragg Gaming has inked a deal with Kero Sports. “Under the terms of the deal, Kero, a supplier of micro betting data feeds, products, and services, will integrate its full product suite onto the Bragg HUB content aggregation platform,” the press release states.
On X, Kero Founder and CEO Tomash Devenishek tweeted that Simplebet’s former clients “are in good hands,” in a separate tweet, said that because “The industry knew for a while, including all who are affected. The calls happened months ago.”
ESPN Ready, Able, and Willing to Embrace Sports Betting
While the rest of the industry is playing the role of the hare, ESPN Bet looks to be the turtle, which could be due to the long-term aspirations of ESPN (and its parent company, Disney).
Recall that Penn CEO Jay Snowden pointed to ESPN dragging its feet on integrations during remarks in March.
“They have to get work done within their media app, within their fantasy app, and the Bracketology,” Snowden said during the JP Morgan Gaming, Lodging, Restaurant & Leisure Access Forum. “That’s on ESPN to get these integrations going faster.”
The slow start hasn’t phased ESPN/Disney. Mike Morrison, VP for ESPN Bet and ESPN Fantasy, told Front Office Sports that ESPN is “happy” with its growth. “It’s tracking very much along expectations.”
However, everyone, including ESPN, seems to view the next six months as a critical juncture. ESPN is trying to hold onto its position as THE brand in the sports media space in a fast-evolving world where cable gives way to streaming and other forms of media.
ESPN plans to lean in on sports betting as it prepares “for life after cable by transitioning from a TV news network into a sports lifestyle brand,” Axios reports. “Once the undisputed leader in sports coverage, the company now faces serious competition from Big Tech for attention and sports rights.”
The evolving landscape leads Axios to believe that for the first time in a long time, “it's willing to take significant brand risks.”
And that means fully embracing sports betting.
“For Year 2 and beyond, ESPN is betting on a strategy taken from the world of Apple and Google,” Front Office Sports said. “The media giant is creating an ecosystem around the ESPN app, ESPN Bet, and ESPN Fantasy in which the accounts are now interconnected. For example, if a user drafts Patrick Mahomes on their fantasy team, they will receive enhanced prop bets for Mahomes during game day. Then ESPN Bet will also feature links back to the main ESPN app—to gamecasts and streams.”
Without going through the upgrades one by one (you can find those here), Eilers & Krejcik Gaming (a newsletter sponsor) said, “ESPN BET’s recent update marks an overwhelmingly positive change to the app, aligning it more closely with industry trends,” that will “make the UI feel more familiar to bettors coming over from other sportsbooks.” EKG did say there are still areas that need improvement.
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Around the Watercooler
Social media conversations, rumors, and gossip.
I recently became aware of a research paper on the skillfulness of online poker. The paper, The Dominance of Skill in Online Poker, was written by Jerome Hergueux and Gabriel Smagghue. The final version appeared in February 2023 in the International Review of Law and Economics.
The researchers followed “91,439 players over 40 consecutive months (representing over 85 million hands played)”. They developed “simple tests to show that (i) skill in the game drives individual results, and (ii) players improve their skills with experience and quit playing the game as a function of starting ability.”
The paper attempts to reframe the “skill” debate, arguing:
“That the skill dominance criterion understood as “does skill dominate game outcomes” can be highly misleading when it comes to making a legal distinction between gambling and skill-based activities… This is why “skill dominance” in such environments is usually defined with respect to the question of whether differences in skill can be detected across players that generate consistent profits. In other words, the criterion asks: “do skilled players dominate the game?””
It’s an interesting discussion that could open legal and regulatory pathways for online poker.
Stray Thoughts
Mike Tyson famously said, “Everyone has a plan until they get punched in the face.” The quote is typically used to get a laugh when someone posts a fight video, but it’s far more profound than most people give it credit for.
In 2012, Tyson elaborated on his famous quote, telling Mike Berardino:
People were asking me [before a fight], ‘What’s going to happen?" They were talking about his style. ‘He’s going to give you a lot of lateral movement. He’s going to move, he’s going to dance. He’s going to do this, do that.’ I said, “Everybody has a plan until they get hit.” Then, like a rat, they stop in fear and freeze.
If you’re good and your plan is working, somewhere during the duration of that, the outcome of that event you’re involved in, you’re going to get the wrath, the bad end of the stick. Let’s see how you deal with it. Normally people don’t deal with it that well.
How much can you endure, buddy? Most talkers, they can’t handle it.
“That quote, it morphs life so much. It’s all about endurance. You might be one of those guys that starts real fast, but at the end of the game you’re not looking so good. Or you might start a little slow, have some adversity in your past, but you stuck it out and now you’re on top of the mountain for a long time. Some guys start off looking real good, but they can’t maintain that.”
There is also a more historical, eloquent version of Tyson’s statement: “No plan of operations reaches with any certainty beyond the first encounter with the enemy's main force.”
That quote from Helmuth von Moltke, a 19th Century Prussian Field Marshall credited with modernizing warfare, is typically reduced to:
“No Plan Survives First Contact With the Enemy.”
The gambling industry has many “talkers,” as Tyson put it — people who are very interested in debate and discussion but whose ideas fall apart under pressure.