Let The Record Reflect
The Senate Judiciary Committee is set to hold a hearing on sports betting next week. That hearing could set the stage for federal efforts in 2025.
The Bulletin Board
NEWS: The sports betting industry will be under the proverbial microscope at a Senate Judiciary hearing next week.
LOOSE ENDS: FanDuel’s new RG tool; PA skill game ruling; MasterClass adds sports betting course.
VIEWS: Does the presence of sweepstakes casinos hurt licensed online casinos?
AROUND the WATERCOOLER: A new online poker site in Nevada… Sort of.
STRAY THOUGHTS: A Substack recommendation.
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OSB Operators Go to Washington
Next week’s congressional hearing on sports betting could provide a glimpse of what Congress and the federal government have in store for an industry under increasing scrutiny.
The committee includes many online gambling skeptics, including:
Richard Blumenthal (D-CT) is the sponsor of the SAFE Bet Act.
Lindsey Graham, who spearheaded an effort to ban online gambling in the mid-2010s, is a longtime opponent of online betting.
Mike Lee (R-UT) and Peter Welch (D-VT) recently sent the FTC a letter asking it to investigate DraftKings and FanDuel for antitrust violations.
There are several other gambling-critical (or at least gambling-skeptical) members, such as Marsha Blackburn, Jon Cornyn, and Chuck Grassley. The latter has been trying to prohibit online betting since the 1990s.
As bad as the hearing might go, if I’m the industry, my biggest concern is the sheer number of tentacles the federal government currently has probing the gambling industry heading into 2025.
Current federal efforts include:
The GRIT Act and the industry’s desire to end the federal excise tax
The Department of Interior’s new tribal compact rules
Classifying problem gambling as a coverable mental health disorder
Any one of these could lead to action. Even something as innocuous as raising the slot reporting threshold allows critics to appear and address other concerns.
Who might be a thorn in the side of the industry?
The incoming Trump administration
It’s unclear where the Trump administration will come down on gambling. Doug Burgum, the nominee for DOI Secretary, seems like a good pick for tribes. On the other hand, as Steve Bittenbender pointed out on X [bold mine], FTC nominee Mark Meador is a "Republican antitrust attorney for the Senate Judiciary Committee, both as a detailee from FTC and DOJ and as Deputy Chief Counsel for Antitrust & Competition Policy to Sen. Mike Lee."
The NCAA
The NCAA is pushing for a national ban on player prop bets and may want to push for other policies like education and treatment on college campuses.
The NBA
The NBA has called for a federal regulatory framework on multiple occasions: “We’ve always been, again, an advocate for a federal regulatory framework here,” Tatum said in June. “I think it creates transparency that we didn’t have previously, which allows us to maintain the integrity of the sport, which is essential to all sports leagues.”
Responsible and Problem Gambling advocates
RG and PG advocates are already on board with the GRIT Act and are divided on the current version of the SAFE Bet Act. They are armed with evidence of social harm (the industry disputes many of these findings) and have gained the ears of many lawmakers.
Miriam Adelson
Adelson is perhaps the biggest wildcard, as her views on online gambling may be even more intense than her late husband’s. As I wrote last week about Texas casinos:
“In yesterday’s newsletter, I made a case that the Trump administration won’t be overly focused on gambling policy (pro or con). The one caveat I’d add to that is Texas, where Miriam Adelson and Las Vegas Sands have their eyes set on a casino resort. Adelson propped up the Trump campaign with $100 million of her own money, along with fundraising efforts among other billionaires.”
The same could hold true for online gambling if Adelson decides to try to kneecap the industry once again.
Casino owners
There are a growing number of significant gaming companies that have expressed concerns about online gambling, including but not limited to:
Churchill Downs
Cordish Companies
Wynn
Las Vegas Sands
STTP final point: I don’t expect much from a lame-duck hearing, but I wouldn’t put much stock in the idea that the federal government is a nothing burger.
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Loose Ends: FanDuel’s New RG Tool; PA Skill Game Ruling; MasterClass Adds Sports Betting Course
FanDuel adds new RG tool My Spend: On Tuesday, FanDuel introduced My Spend, which it has dubbed “A new personalized responsible gaming dashboard designed to help customers track spending patterns and manage their budget.” My Spend allows users to track their amount deposited and net winnings over the last seven days, four weeks, or three months through a dashboard and, per the press release, “Encourages customers to utilize the existing suite of responsible gaming tools FanDuel offers, including deposit limits and wager limits.”
Skill game supplier Pace-O-Matic scored a significant legal victory: As reported by Play Pennsylvania, “The Commonwealth Court of Pennsylvania has overturned a municipal law banning skill games in Philadelphia.” Philadelphia Mayor Cherelle Parker signed legislation prohibiting the machines in April, with Pace-O-Matic quickly filing suit. “Pace-O-Matic is pleased, and not surprised, that Commonwealth Court agrees the ban passed by Philadelphia City Council is unlawful,” Mike Barley, spokesman for Pace-O-Matic, said after the ruling.
MasterClass announces sports betting course: MasterClass has launched Bet Smart: Top Sports Betting Strategies. Per the press release, “Six veteran insiders break down the strategies they use to make smarter bets. Members will learn the secrets of reading the market, managing their bankroll, finding hidden edges, and more with Audacy’s BetQL Network host Nick Kostos, ESPN Sports Betting Analyst Joe Fortenbaugh, and pros like Unabated co-founders Captain Jack Andrews and Rufus Peabody, and Gina Fiore and Rob Pizzola.”
Do Sweepstakes Compete with Licensed Online Casinos?
New research from Eilers & Krejcik Gaming (a newsletter sponsor) highlights something I’ve been thinking about since Michigan booted sweepstakes operators from the state in December 2023: What impact would the prohibition on sweepstakes sites have on the state's licensed online gambling revenue?
The answer, per EKG, is minimal.
According to the presser, “EKG's methodology looks at the regulated online casino state of Michigan, comparing the regulated online casino revenue in states prior to and after the withdrawal of social sweepstakes.”
Per its analysis, “The state of Michigan posted the second worst year-on-year online casino growth in these markets since the exit of social sweepstakes casinos (an average of 24.8%).”
Average Growth Jan-Aug 24 vs Jan-Aug 23:
Delaware 303.9% (Delaware revenue has skyrocketed after switching suppliers)
West Virginia 54.5%
Connecticut 37.5%
Pennsylvania 27.8%
Michigan 24.8%
New Jersey 22.7%
E&K Gaming summary: “If sweepstakes social casinos had a material impact on the state’s online casino market, one would expect the removal of those products to have had a positive impact on Michigan’s Y/Y figure, helping to raise it above that same figure for other states.”
Similarly, as reported by Earnings+More:
“Despite the similarities between sweepstakes real-money operations and iCasino, the Macquarie team said they saw “little evidence” of cannibalization.
“However, the Macquarie team believed it more likely sweepstakes was cannibalizing social casino, suggesting the latter format contains a significant cohort that plays because of the lack of legal iCasino options.”
There are other plausible explanations for the lack of growth in Michigan’s legal online casinos after the state banned sweepstakes operators, but that’s a conversation for another day.
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Around the Watercooler
Social media conversations, rumors, and gossip.
An interesting find from Jessica Welman about a mobile app available in Nevada that appears to be a version of video poker:
And as Nick Jones noted:
Stray Thoughts
I wanted to share an interesting Substack I came across: Ray’s Substack. This substack offers a critical view of the sports betting industry. Whether you agree with the arguments or not, it’s a perspective we should all be aware of. It’s also extremely well-written and well worth a subscribe.
