Off The Rails
The US gambling industry is being attacked from all sides, and several stories in the past week may be pivotal moments in the fight.
The Bulletin Board
NEWS: It was a very bad week for the US gambling industry.
WEEKEND CATCHUP: The Massachusetts Lottery is #1; How Outlier came to be; Quote of the Week.
NEWS: The curious case of the disappearing US sportsbook.
QUICK HITTER: Aristocrat Gaming CEO resigns for role at IGT-Everi mashup.
AROUND the WATERCOOLER: Is the industry anti-competitive?
STRAY THOUGHTS: The zeitgeist is changing.
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A Truly Bad, Awful Week for the US Gambling Industry
If you’re one of the bigger US mobile sports betting operators, it probably feels like Black Friday came a week late, as the industry was beaten to a pulp last week, culminating with an absolutely brutal beating on Friday.
First, a positive missive on sports betting from The Economist had the opposite of its intended effect as it raised more eyebrows than a highlight reel of The Rock’s wrestling days (you can read the comments or the quote retweets to get a small taste).
The article was meant to defend the industry (which has been a punching bag of late), but it seems to have added fuel to an already smoldering fire. Numerous political pundits and journalists jumped on The Economist, adding their jeers to an already sizable contingent that has been ringing alarm bells about sports betting, from Saagar Enjetti to Charles Fain Lehman’s Atlantic article to Andrew Yang (who wrote a scathing op-ed against sports betting) to multiple guests on the Joe Rogan Podcast where gambling keeps coming up more and more (here and here). And they are far from alone (more here and here).
One of the supposed bright spots highlighted by The Economist was that 44% of sports bettors earn over $100k a year, which was a harbinger for a newly reported lawsuit claiming DraftKings allowed someone earning $175,000 a year to lose nearly a million dollars over four years while enticing him with VIP rewards and failing to follow its own policies to verify the source of funds.
Just days before the lawsuit story broke, Sports Betting Dime’s Robert Linnehan happened to pen an article titled: VIP Programs May Leave Sports Betting Operators Vulnerable to Bevy of Problems.
You can also read my deep dive into VIP programs here.
Then we got word from Reuters that Senators Mike Lee of Utah and Peter Welch of Vermont want “the Federal Trade Commission and Justice Department to investigate online betting platforms DraftKings and FanDuel over concerns they are coordinating against competitors.”
There is never a dull moment in this industry, and it doesn’t look like it will get any easier:
Weekend Catchup: The MA Lottery; How Outlier Came to Be; Quote of the Week
Massachusetts is the #1 lottery (per capita) state: A new report titled New England’s Lotteries: Trends in State Revenues and Player Spending highlights the popularity of the lottery in New England, “with Massachusetts topping the national average at $839 per person annually,” per Lottery Geeks. “The national average is just $293.”
Evan Kirkham outlines the path from Colorcast to Outlier: An excellent story from Jeff Edelstein on the evolution of Colorcast, a social sports talk app that allowed anyone to commentate a professional sports event, to Outlier, a sports betting tool for player prop research and trends, team and line movement analysis, odds comparison, and integrated options to place picks on your sportsbook app. I recently spoke with Outlier CEO Evan Kirkham, which you can listen to here.
Quote of the Week: "Every sign is pointing to that. Obviously, really excited about the state legislative front. 2024 was an election year. It's always hard to get gaming bills done in an election year. I think this year coming up, 2025, we're going to get some real momentum and potentially even get some iGaming bills over the hump, which should be great." ~ DraftKings CEO Jason Robins
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There Is a Dwindling Supply of US Sportsbooks
This excellent writeup from Jill Dorson neatly packages one of the trends I’ve been following in the newsletter: Shuttered US sportsbooks.
Per Dorson, in 2024:
“Five sports betting platforms that had been active in multiple states announced or completed US exits or downgrades. Betway, SI Sportsbook, and Unibet opted to get out of the digital wagering business altogether. SuperBook and WynnBet pulled out of multiple states but continue to offer online betting in Nevada.”
That number may not seem overly large, but when you add it to the existing names of the departed (either withdrawn or heading that direction, defunct, or sold and rebranded), the list is far more impactful (my non-exhaustive list):
Quick Hitter: Fernandez Leaves Aristocrat for IGT-Everi
Hector Fernandez has resigned as CEO of Aristocrat Gaming to take the same position at the newly formed IGT-Everi mashup managed by Apollo.
“Mr Fernandez brings a clear track record of success across technology and gaming as well as deep strategic and financial expertise,” Apollo said in a press release. “His diverse experience both inside and outside of the gaming industry is expected to position him well to integrate and lead two highly complementary gaming platforms following the transaction close with a focus on growth, product innovation, and content generation.”
Fernandez’s role at Aristocrat will be filled by its current CFO, Craig Toner.
Readers may remember Fernandez from my article on AISES (which is one of my favorite articles I’ve written since I started the newsletter), a national nonprofit organization focused on substantially increasing the representation of Indigenous peoples of North America and the Pacific Islands in science, technology, engineering, and math (STEM) studies and careers.
Around the Watercooler
Social media conversations, rumors, and gossip.
Circling back to the request from Senators Lee and Welch, Sporttrade (a newsletter sponsor) CEO Alex Kane entered the discussion on X:
Alex is a two-time guest on my podcast, and we’ve gone pretty in-depth on some of the ideas he is likely to propose on this front:
I also wrote a feature column on creating a second sports betting licensing tier, which you can read here.
Stray Thoughts
Pay close attention to the zeitgeist. When people who usually don’t talk about a topic are suddenly interested, that’s when a sea change is coming.