I'm The Trouble Starter
Wyoming's pro-operator findings may have just turned the dial on the limiting bettors debate up to 11, but is there a feasible solution?
The Bulletin Board
THE LEDE: Wyoming pours gasoline on the fire of limiting bettors.
ROUNDUP: M&A Tidbits; France iCasino when, not if; Manitoba vs. Bodog; Alabama tribe lobbies for gambling expansion.
VIEWS: Negative press about online gambling, but is anyone paying attention?
AROUND the WATERCOOLER: What did Kalshi’s CEO really say about 401k’s?
STRAY THOUGHTS: Defining the state of the industry in one word.
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The Lede: Wyoming’s Pro-Sportsbook Stance
A recent Wyoming Gaming Commission report on limiting bettors has ignited controversy, with some on the betting side of the counter calling it regulatory capture, highlighting a disconnect between regulators, operators, and bettors.
Authored by Michael Steinberg, the report defends sportsbooks, arguing that limitations target unethical practices, not winning bettors. STTP covered the report when it was released earlier this month.
In the report, Steinberg claims that fewer than 1% of bettors face limits, and most of those limits are imposed for “cheating,” such as exploiting live event data or creating multiple accounts to receive bonuses. Steinberg asserts imposed limits are modest, and limited bettors can often still wager $500-$1,000 per market. He also claimed that no Wyoming residents have complained.
“Cheating,” or more aptly, violating a site’s terms and conditions, is a significant piece of the limiting puzzle.
As Jessica Welman said on X, we are often hearing only part of the story:
“I am not gonna comment on the validity of these opinions about limiting bettors, but I will note that the underdiscussed part of this is a large number of issues you hear about do fundamentally extend from cheating. Several of the stories you see in MSM in particular about "shafted" bettors, have someone who has presented like 70% of the story and leave out the part where they were bearding or doing something else to violate the Ts & Cs, which is why I am always hesitant to report on them.”
Isaac Rose-Berman, the author of the How Gambling Works newsletter, doesn’t buy what the Wyoming report is selling. He believes “bettors are primarily limited for displaying tendencies which indicate they are likely to win in the future,” and not for “cheating.”
According to Rose-Berman: “Today, sportsbooks are able to leverage vast amounts of data to accurately identify which customers are likely to be profitable for them in the long run, and which pose a threat to their bottom line—sometimes within just hours of signing up.”
“Modern sportsbooks leverage vast data to identify such bettors within hours, restricting them even if they’re net losers.” This contradicts Steinberg’s claim that cheating drives most limits, as many restricted bettors, including the trader, report no unethical behavior.
Rose-Berman also said that limits are far stricter based on his own experience and through conversations with traders and bettors: “Limits at legal sportsbooks generally come fast and furious; once they decide you are an undesirable customer, it’s rare to be able to bet more than a couple hundred bucks on major markets, or $50 on prop and derivative markets.”
Rose-Berman called for “truth in advertising,” believing sportsbooks mislead customers into thinking they can win, but limit them when they do. Rose-Berman would like regulators to ask a very simple question:
“If a customer uses their own knowledge and data they’ve acquired to place informed bets, and wins, will you limit or ban them?”
“The answer, of course, is yes. So why are operators allowed to lie in their advertisements, and have celebrities on ESPN tell viewers they can sign up and use their smarts to win big — even though the system is designed to stop them from doing exactly that?”
His solution is similar to cigarette warning labels:
“Sixty years ago, Congress passed the Federal Cigarette Labeling and Advertising Act. Since then, study after study has shown that warning labels work… We need a similar act for sports betting to prevent operators from lying to customers and to make sure Americans are informed about the products they’re consuming.”
Other solutions have been put forth:
Captain Jack made the same argument in 2022:
And as I wrote in a September 2024 column, there are also structural solutions:
“If a state lowered its barrier to entry, then sportsbooks that limit bettors would function alongside sportsbooks that don’t, and every bettor would have an option.
“In that environment, states wouldn’t have to step in. The market would figure it out. Customers happy with high-hold “recreational-focused” sportsbooks with fun lottery-style SGP offerings would have options, as would bettors looking for a “fairer” shake. And under those market conditions, books that limit bettors may pull back on that policy if burdens were reduced and they had competition on that front.”
Roundup: M&A Tidbits; France iCasino; Manitoba vs. Bodog; Alabama Tribe Lobbies for Expansion
Light & Wonder completes Grover Gaming acquisition [CDC Gaming Reports]: Light & Wonder (a newsletter sponsor) has considerably increased its presence in the charity gaming market: “Grover Gaming and G2 Gaming on Monday completed the sale of charitable gaming assets to Light & Wonder for consideration of up to $1.05 billion. The deal involved the initial $850 million received on May 16, with a contingent cash consideration of up to $200 million. The additional amount depends on meeting specific financial targets by 2028.”
GAN merges with Sega Sammy [Complete iGaming]: GAN announced that it has completed its merger (nearly two years in the making) with Sega Sammy Creation. “Sega Sammy, through its affiliated entity, acquired all outstanding securities of GAN for US$1.97 per share in cash, which represents a premium of more than 121% to GAN’s closing stock price on November 7, 2023, the trading day prior to the announcement that GAN entered into a merger agreement with SSC.”
France online casino regulation “when, not if” [Gaming & Co]: Citing France’s “huge debt levels,” Stéphane Courbit, Chairman of Betclic’s parent company Banijay Entertainment, told analysts and investors that online casino regulation was not “a matter of if, but when” in the next few years. Per Jake Pollard at Gaming & Co, “Speaking during the group’s capital markets day, Courbit gave as reasons for his statement that “there are more than 4 million people who are playing (online casino) every day, irregularly, illegally, in France.”
Canadian court orders Bodog to cease operations and advertising [Canadian Gaming Business]: In a first of its kind request, “A Manitoba court has granted Manitoba Liquor & Lotteries (MBLL) an injunction against offshore online casino and sportsbook operator Bodog as the crown corporation seeks to prevent the brand from offering online gambling products and services to the province’s residents.” MBLL filed the claim on behalf of the Canadian Lottery Coalition, claimed that Bodog’s real-money and free-play sites violate the provinces criminal code. The success could lead to similar actions in other CLC provinces (as CGB notes, Bodog has already pulled out of Quebec and Nova Scotia): Atlantic Lottery Corporation, the British Columbia Lottery Corporation, Lotteries and Gaming Saskatchewan and Loto-Québec.
Alabama tribe continues push for gambling expansion [Legal Sports Report]: The Poarch Band of Creek Indians is ramping up its lobbying efforts, “according to a new report from the Alabama Political Reporter, the Poarch Band of Creek Indians will look to focus more time on gambling legalization throughout the year rather than just the legislative session,” according to Legal Sports Reports. “That comes after multiple legislative failures to legalize Alabama sports betting and casino gambling.”
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Views: More Negative Press; Is Anyone Listening?
Every few months, I post a bunch of negative columns.
As we approach the NFL season, the mainstream press has once again taken an interest in gambling (a torrent of negative articles was unleashed in Nov. 2022). Chris Grove posted a lovely thread on this back in March that everyone should read.
Recent headlines include:
The gambling industry is full of surprises, but one thing you can count on is a gambling court case update every Friday and an article about the rise in problem gambling landing on the weekend—and just for good measure, there are the increasingly common scandal stories.
It’s been a while since the media indiscriminately bombed the gambling industry with negative coverage, so I wasn’t too surprised to come across a half-dozen stories this week that paint the industry as a blight on society.
Sports betting in NC: off to a fast and destructive start (North Carolina)
News10NBC Investigates: Is mobile sports betting leading to more gambling addictions? (New York)
As legal gambling explosion puts ‘a casino in your pocket,’ CT grapples with how to protect bettors (Connecticut)
Sports gambling believed to contribute to helpline call increase in Kentucky (Kentucky)
Covering the Spread: Sports gambling and addiction in Virginia (Virginia)
Online gambling: the stakes for public health (Harvard University Forum discussion)
America Has Fallen in Love With Long-Shot Sports Bets (Wall Street Journal)
So here we are, in May, and we’ve got the following (and these are just from the past week or two):
Get rich or die trying: how sports betting is changing our love of the game (NPR)
Sports Betting Is Taking Over Young Men's Time—And Money (Investopedia)
THIS life hack could pay for your college tuition (Part 1) (The Oak Leaf)
OPINION: The truth about gambling addiction (Part 2) (The Oak Leaf)
Chasing Losses: When online gambling becomes more than a game (WFAE 90.7)
I have several questions about the negative coverage. Is anyone still paying attention to these stories? Do we even have to read them to know what they will say?
My guess is, for the most part, the answer to the second question is no. The first question is a little more complicated. These articles are being thrust into the face of lawmakers, so while the average person isn’t paying attention, the avalanche of negative press is being used to shape legal and regulatory policy.
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Around the Watercooler
Social media conversations, rumors, and gossip.
A big story late last week was the comments by Kalshi CEO Tarek Mansour during the Solana Accelerate conference in New York.
I listened to the Q&A with Mansour (which starts at around the 1:50 mark) and believe all Mansour was saying was that Kalshi is working on getting its markets listed by other brokerages (not just Robinhood and WeBull), the types of brokerages that also handle 401Ks: Vanguard, Charles Schwab (a Kalshi investor), Fidelity, and others.
A more intriguing part of the conversation was something Mansour said (that I hear from all corners of the industry) about customer wallets, and Kalshi’s desire to have access to them:
“We launched stable coins late last year we launched, I think, Bitcoin early this year, and this morning we launched Solana deposits, which we're super excited about. And over time I would say access to sort of wallets I think there's large amounts of liquidity and money just sort of on chain. I think companies like ours want to sort of go to where the users are sitting and basically access these wallets.”
I know we live in the era of consumer convenience, but I wonder if removing every friction point is a wise decision.
I also found Mansour’s statements that Kalshi’s “relentlessness” in getting election markets authorized a bit humorous. Mansour noted it took three years for this to happen — the horror — which he called a “excruciatingly long journey.”
“It was really three to three and a half years of convincing policymakers and the regulators to let us sort of do this in the US in a regulated and legal way.”
That might seem like a long time for Mansour, but it’s a drop in the bucket in the gambling universe, where legalization efforts can take many years (if they ever occur). What he calls “excruciatingly long,” I would call quite fast.
Three other pieces of prediction market news from Event Horizon:
CFTC Pick Quintenz To Resign From Kalshi Board And Divest Stock Upon Confirmation
More Than 80% Of Kalshi Trading Volume Was On Sports Last Week [previous STTP coverage of this phenomenon]
Stray Thoughts
Upheaval: “A violent or sudden change or disruption to something.”
The gambling sector is in a period of upheaval.