Let The Voters Decide
Sports betting is in the hands of voters after a Missouri judge dismissed a lawsuit challenging the signature certification of the sports betting ballot initiative.
The Bulletin Board
NEWS: Missouri judge dismisses lawsuit; sports betting initiative on the ballot.
WEEKEND CATCHUP: Indiana’s top regulator heads to Fliff; David Rebuck launches consulting firm; NH casino owner seeks sale extension.
NEWS: Say hello to the SPGA, a trade group representing sweepstakes and social gaming operators.
NEWS: Kalshi scores a legal victory, paving the way for betting on elections.
AROUND the WATERCOOLER: Skill games show up in the darndest places.
STRAY THOUGHTS: Get off my lawn!
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Missouri Sports Betting Will Be on the Ballot
As mentioned in yesterday’s Weekender edition of the newsletter, Missouri’s sports betting ballot initiative will remain on the November ballot after Judge Daniel Green dismissed a lawsuit challenging the certification process performed by Secretary of State John “Jay” Ashcroft.
Recent polling bodes well for the measure. A poll conducted by Saint Louis University and YouGov indicated 50% support for and just 29% opposition. Another 21% are undecided.
That said, opposition efforts haven’t kicked into gear. Vote-no campaigns are expected from the usual suspects, including the anti-gambling crowd and the VGT industry. The latter has tried to legalize and regulate its machines alongside sports betting in each of the past few legislative sessions.
The casino industry, specifically Caesars, could also get involved, as it isn’t a fan of the measure’s language.
As I previously mentioned, the opposition stems from:
“The language of the initiative has a unique structure, with licenses limited to each casino’s parent company, Missouri’s six professional sports teams, and two online-only licenses.”
“That language limits PENN Entertainment and Caesars to a single mobile betting skin, even though each company operates multiple casinos in the state. This doesn’t mean much for sports betting, but in true cart-before-the-horse thinking is a source of unreasonable concern when Missouri legalizes online casinos in 30 years.
“The opposition also stems from the two untethered online licenses. Eilers & Krejcik Gaming (a newsletter sponsor) recently noted, “Both of the above parameters shift market access power in the direction of sports stadia and online operators in a policy climate that still generally favors gambling incumbents.”
Weekend Catchup: Indiana Regulator Heads to Fliff; Rebuck Consulting; NH Casino Owner Seeks Extension
The regulator to industry pipeline: Indiana Gaming Commission (IGC) Executive Director Greg Small will step down effective September 20 to take a position as Head of Legal & Government Affairs with sweepstakes sports betting operator Fliff. IGC General Counsel Dennis Mullen has been named the interim executive director until Gov. Eric Holcomb appoints a permanent replacement.
David Rebuck joins the consultant sphere: David Rebuck, the recently retired New Jersey Division of Gaming Enforcement Executive Director, has announced the formation of Rebuck Consulting LLC. I think Chris Grove sums up Rebuck’s bona fides perfectly here: “You can’t possibly charge too much.” Anyone needing regulatory or compliance guidance would be wise to contact Mr. Rebuck.
Need more convincing? Here you go.
Embattled New Hampshire casino owner seeks extension to sell: New Hampshire casino owner and former state Rep. Andy Sanborn has asked for another extension as he is trying to line up a buyer for Concord Casino — Sanborn is being forced to sell his ownership as part of a pandemic loans fraud case. The only reason I continue to monitor this story is because, as we’ve seen in other locales like Indiana, these black eyes tend to thwart efforts to legalize online gambling. Further complicating matters, Sanborn’s wife is still a sitting state lawmaker.
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Sweepstakes Operators Form Trade Organization
Sweepstakes and social gaming operators have banded together to form the Social and Promotional Gaming Association (SPGA).
The group lists 11 members: 10 Ten Gaming, Blazesoft, Fliff, FSG Digital, Gold Coin Group, High 5 Entertainment, KHK Games, Kickr Games, Octacom, Rolling Riches, and Woopla Gaming.
According to the press release, the organization aims “to highlight the well-established legality and legitimacy of social sweepstakes games, providing regulators, policymakers, and consumers with a comprehensive understanding of these offerings.”
Speaking with Straight to the Point, an SPGA spokesperson said:
"It's not unusual for innovative categories to come under fire from incumbents. Part of the mission of the SPGA is to counter the misinformation campaign mounted by companies who simply don't like competition."
The press release lists three core components: transparency, compliance, and consumer protection, and highlights that it “brings together innovative companies in a unified approach to creating safe, legal, and engaging social and promotional gaming experiences for American adults.”
"Millions of American adults enjoy the games offered by SPGA members, and it's not hard to see why,” the SPGA spokesperson told STTP. “When you take the traditional social casino model - a category where Americans already spend billions of dollars annually - and add the ability to win prizes without ever needing to make a purchase, that's simply making a good product even better."
The SPGA plans to hold a webinar on October 1, during which it will “discuss the future of social and promotional gaming… explore emerging trends, regulatory landscapes, and best practices to ensure the industry's sustainable growth.”
Beyond the Headline: What Does the SPGA Bring to the Table?
So, what can we expect from the SPGA? Advocacy and a unified voice to counter the claims being lobbed at sweepstakes operators, as certain forces in the industry are calling for a regulatory crackdown on the sweepstakes industry.
Sweepstakes sites inhabit an extremely gray area, with more convincing legal arguments than DFS operators.
I participated in an American Bar Association panel on sweepstakes in December 2020 (the transcript can be found here), and suffice it to say that even experts have difficulty formulating reasons why these sites are illegal.
Dustin Gouker and I also discussed this topic at length in my inaugural podcast episode.
In addition to the legal arguments, the industry is possibly playing with fire, as the current AML and player protection attacks open a can of worms.
As I wrote in a previous newsletter, the good actors in the sweepstakes space use the same KYC, geolocation, and payment processors and, in many cases, the same third-party content suppliers:
“Essentially, this may not be a road sweepstakes naysayers want to travel. Either the technology works, and sweepstakes sites are using it, or it doesn’t, which opens the proverbial Pandora’s Box.
I also mentioned that anyone attacking sweepstakes sites “better have your own house in order if you’re going to complain about AML deficiencies.”
The SPGA could quickly point to the licensed industry’s recent failings:
Is the Stage Set for Election Betting?
Election betting is becoming an increasingly hot topic, and this newsletter has been monitoring it since it launched in August last year.
As I said in my January predictions for 2024:
“With the spread of sports betting, it was only a matter of time before election betting became a topic of interest. Election betting is largely off-limits in the US, but efforts are afoot to change that, if only incrementally.”
One firm at the center of the fight, Kalshi, scored a significant victory after US District Court of the District of Columbia Judge Jia Cobb ruled in favor of Kalshi in its ongoing lawsuit against the Commodity Futures Trading Commission.
The ruling allows the derivatives company to offer a market on which party will win control of Congress.
Election markets are now legal in the United States for the first time in 100 years,” Tarek Mansour, co-founder and CEO of Kalshi, said after the ruling.
Cobb didn’t offer an opinion (saying it is forthcoming), with the decision simply reading:
“For the reasons stated in the Court’s forthcoming memorandum opinion, the Court GRANTS Plaintiff’s motion for summary judgment, ECF 17, and DENIES Defendant’s crossmotion for summary judgment, ECF 30. Defendant’s September 22, 2023 order prohibiting Plaintiff from listing its congressional control contracts for trading is hereby VACATED.”
The CFTC has filed an emergency motion asking Judge Cobb to grant a temporary stay of her decision. The CFTC is expected to appeal the decision, and Congress could also step in, as a group of lawmakers has written several letters to the CFTC urging it not to allow betting on elections:
Sporttrade CEO Alex Kane spent considerable time discussing it in a podcast recorded early last week (before the ruling).
Further Reading:
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Around the Watercooler
Social media conversations, rumors, and gossip.
There is a huge fight occurring in Pennsylvania over so-called skill games. On one side are the skill game manufacturers and venues, and on the other are the state’s casinos.
Whichever side you fall on, it’s safe to say that there are some places they really don’t need to be, but as Bill Thomas points out, they are everywhere:
Stray Thoughts
“If we moved in next door, your lawn would die.” ~ Lemmy Kilmister on what would happen if Motorhead moved into your neighborhood.