My Baby, Just Wrote Me A Letter
Bovada will comply with the cease-and-desist letters sent from Michigan and Colorado. Now more states are considering taking similar actions.
The Bulletin Board
NEWS: After receiving C&D letters, Bovada has exited two more US states, and more requests are likely coming.
WEEKEND HOUSEKEEPING: Aftermath Games is bringing a new poker product to the US, and what I’m reading.
NEWS: BetMGM will acquire Tipico’s US assets and finally secure its in-house sports betting product.
AROUND the WATERCOOLER: What are people saying about the Penn-Boyd rumors?
STRAY THOUGHTS: That’s a big commitment for an eight-year-old.
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Bovada Exits Two More US States: Michigan and Colorado
After receiving cease-and-desist letters from Michigan and Colorado, Bovada, one of the most popular offshore sports betting sites, has decided to exit the two states, bringing the total number of no-go US states to seven.
From the Bovada FAQ section:
“Bovada remains open to United States residents, except for those living in Nevada, New Jersey, New York, Maryland, Delaware, Michigan, and Colorado.”
That number will likely rise as Connecticut has sent a similar letter, and Massachusetts regulators have publicly expressed interest in doing the same.
With each letter, the likelihood of other states (particularly those with legal sports betting industries) following suit increases. The American Gaming Association and the industry are also exerting pressure — the AGA has made stamping out all forms of unregulated gambling a top priority.
Bovada is the only offshore operator I know of that complies with these types of requests. As I mentioned last week, Bovada’s willingness to exit some legal US markets speaks to the amount of business it is doing in these states.
That said, the Michigan Gaming Control Board is concerned that Bovada’s exile, like so many in history, might not stick.
"While this is a good indication that they are taking our cease-and-desist letter seriously, we will continue to closely monitor the status of their offerings in Michigan and take appropriate action as deemed necessary," MGCB Public Information Officer Lisa Keith said in an email to Covers.
“Successful enforcement actions against Bovada by Michigan and Colorado are proof that states have tools to fight back against offshore operators and should serve as blueprints for other states to follow,” AGA Senior Vice President, Government Relations Chris Cylke said in a statement. “But states should not have to take on this battle alone – the DOJ must also use its powers to aid the fight against illegal gambling, which Congress has clearly identified as a department priority.”
But as I asked last week, What happens if Bovada decides not to comply?
Brendan Bussmann of B Global recently told iGB, “The cease-and-desist is first, and then how far can you prosecute along the way to protect against illegal operators is next. This is where the feds come into play, it needs to be a coordinated effort.”
Weekend Housekeeping: Aftermath Games Bringing a New Poker Game to the US; What I’m Reading
Coming to the US soon: A skill-based poker game: Aftermath Interactive AB and Hensel Grad P.C. have entered into a strategic agreement to develop a skill-based poker game for launch in the US. According to the press release, “Together the companies will create a truly skill-based digital poker experience” built on “Aftermath Interactive’s free-to-play game Hands of Victory, which is currently in early soft-launch.”
Aftermath Games CEO Kim Lund was a guest on the Straight to the Point Talking Shop Podcast (Episode 8), where we discussed Hands of Victory and much more.
What I’m Reading: Recent stories worth your time.
Perceptions And Realities: 15 Perspectives On Whether The Lottery Is Gambling ~ Lottery Geeks
Part 2 of RobnSports deep dive into the Shohei Ohtani betting scandal: The Encore Of Victim A: The Thread Unspools ~ RobnSports
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BetMGM Acquires Tipico’s US Assets
BetMGM has been very clear that it wants to bring its sports betting tech stack in-house. However, finding a product and a willing seller was a problem.
“We want to obviously be in our own sports betting business with our own technology,” MGM President and CEO Bill Hornbuckle said during the company’s earnings call in February.
After being rejected by Entain (on more than one occasion), BetMGM realized Entain wasn’t ready to get hitched and set its sights on a company actively looking for a relationship: Tipico.
In today’s edition, Earnings+More reports:
“MGM Resorts has confirmed its subsidiary LeoVegas has bought the product and platform of Tipico US for an undisclosed sum. Tipico will wind down its US operations ahead of the deal closing in the third quarter.”
Per E+M, “As part of the deal, LeoVegas will acquire Tipico’s US-facing management, tech, and trading teams across the US, Colombia, and Europe.”
Per the MGM press release, “The acquisition will allow LeoVegas to operate a purpose-built proprietary sportsbook across all international markets and brands, with the exception of those exclusive to the BetMGM JV [its partnership with Entain].”
That means the BetMGM US product will remain the same (for the time being).
E+M first reported a potential sale in April, which this newsletter covered. Tipico was ready to abandon the US and sell its US assets.
“The latest M&A rumors involve Tipico, which is said to be selling its US sports betting platform. According to E+M, MGM is the most likely buyer.”
A month later, the rumors were corroborated by Eilers & Krejcik Gaming (a newsletter sponsor).
Per EKG channel checks, “MGM is considering the Tipico US platform and parts of the US business. The firm believes Tipico could act as an emergency backup in case its current arrangement with Entain splinters.”
Tipico ranked 12th in EKG’s proprietary app rankings in 1H24. Testers liked its SGP product while marking it down for its lack of search functionality.
That led EKG to conclude: “MGM has been clear it wants a sportsbook platform, and Tipico US, while not a perfect solution, appears to fit the bill.”
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Around the Watercooler
Social media conversations, rumors, and gossip.
According to Reuters, “US casino operator Boyd Gaming has approached Penn Entertainment to express interest in acquiring its peer that has a market value of more than $9 billion, including debt.”
As Reuters noted, this would be the biggest merger since El Dorado bought Caesars in 2020 for $17 billion.
Of course, this is the rumor stage, and it’s unclear if Penn would entertain an offer — Deutsche Bank doesn’t believe Penn would consider an offer below the $20-$25 per share range.
Still, this could cause a seismic shift, given Penn’s portfolio, its investments in online gambling, and the recent criticism from activist investors.
Jordan Bender, Citizens JMP Senior Equity Research Analyst, had a more skeptical take in an interview with Yahoo Finance:
"Boyd has been overly conservative, especially through COVID and kind of post-COVID. They haven't made any large investments. They haven't done M&A and they really haven't jumped into the online gaming space. And for Boyd to go look to buy Penn, this would be a complete 180 of strategy."
Bank of America analyst Shaun Kelley pointed out even more problems, per Casino.org:
“In a report to clients, the analyst noted that while buying Penn would be accretive to Boyd, the transaction would require a combination of financing and leverage that could be “unattractive” to the prospective suitor. Assuming the $9 billion figure is accurate, that’s more than Boyd’s enterprise value of roughly $8 billion, meaning the prospective buyer would likely need to issue debt, sell stock, or both to complete the takeover.”
The Deutsche Bank has a laundry list of questions and noted the sheer complexity of the deal, as it would require approval from regulators, the FTC, ESPN, Gaming & Leisure Properties (more on that in a moment), the selling of some land-based assets and finding a buyer(s), the likely sale of the online division, and once again finding a buyer.
There is also Boyd’s FanDuel ownership to consider, which currently stands at 5%. And there is also the not-so-small issue that Penn doesn’t always own the land its casinos sit on; it leases it from the previously mentioned Gaming & Leisure Properties.
Basically, a deal of this size has many pieces, and it could go sideways in any number of ways.
Stray Thoughts
This is the tweet.
Through my martial arts school, I see the demands these sports make on young children (and their parents) all the time. Seven- and eight-year-olds are being asked to commit to playing baseball or flag football four-plus days a week and travel to games. I get this for elite middle school leagues and high school, but elementary kids playing a sport for the first time?!?!?!!
One introductory flag football league in our area requires an eight-year-old playing the sport for the very first time to practice four days a week in the summer from 5:30 to 8 PM.
My perspective: There is no faster way to make the typical kid hate physical activity than this. Yes, the ones who excel and love playing sports will continue to excel and love sports. But most kids (and their parents) are just looking for something to do and are far more likely to quit a sport early and, more worrisome, feel like physical activity isn’t fun and are less likely to sign up for another sport or activity. They need to learn to love sports.
Our first goal at our karate school is that whether it is with us, another school, or an entirely different sport, we want kids to enjoy physical activity. You can’t do that by overwhelming them and making them think every sport requires total commitment.
Isn't it kind of crazy that states are just now cracking down on Bovada (founded in 2011)? Imagine there was a well-known website that allowed you to order cocaine that had been around for over a decade. The government definitely knows about it, but doesn't do anything. And then one day the government legalizes and taxes cocaine and, lo and behold, decides to crack down on this super illegal website. Isn't it government's job to prevent these kinds of things, and not just prevent them when they're the ones losing out on the tax revenue?