Pissing Into The Wind
There were several tense debates going on at the SBC Americas Conference. Regardless who is right and wrong, nobody is going to change their mind.
The Bulletin Board
VIEWS: The industry continues to reference the black market when stricter regulations or burdens are proposed, which could be a mistake.
LEGISLATIVE UPDATES: Minnesota trends up; Mississippi trends down; Wyoming considers prop bet ban.
NEWS: A slap on the wrist for former MGM Grand President Scott Sibella isn’t sitting well with industry onlookers.
VIEWS: California fences can be mended, but don’t expect the tribes to be willing to move an inch in the direction of commercial operators.
AROUND the WATERCOOLER: Stumbling across gambling conversations in the wild.
STRAY THOUGHTS: Playing dumb is a skill.
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The Black Market Bogeyman Won’t Go Away
I recently wrote a feature column titled The Black Market Persists. In the column I wrote:
“The black market has become a bogeyman to which the regulated sports betting industry can point. Lawmakers, regulators, and the public are constantly warned about its presence, the harm it causes, and the siren song it uses to lure bettors offshore.”
This continues to be a hot topic, with the industry using the black market bogeyman to oppose a tax rate hike in Illinois and prop bet bans.
So why is it a bogeyman? As I previously wrote, “If all it takes for someone to consider moving from regulated betting sites to unregulated sites is slightly worse odds because the tax rate is 30% instead of 20% or prohibiting wagers on college athletes, it’s only a matter of time before everyone is betting offshore.”
As Jessica Welman tweeted from the SBC Summit in New York:
And as Richard Schuetz said in a separate thread on the subject:
Bottom line: The black market bogeyman is a convenient excuse for industry-friendly policies. But, I’d argue certain bettors are never shifting to regulated markets:
“As much as the legal market would love their action, it doesn’t want the baggage (especially when malfeasance is uncovered), and my guess is that legal operators are quite happy these bettors have somewhere else to go.”
Or, as Alun Bowden tweeted, “The issue nobody ever discusses openly is what segment of money in the black market could EVER be sensibly included in a properly regulated market. Indeed, what % of money that regulation may have forced out should be accommodated?”
Legislative Updates: Minnesota Trends Up; Mississippi Trends Down; Wyoming Considers Prop Bet Ban
Minnesota sports betting bill’s last gasp: Cue the Undertaker memes. Minnesota’s sports betting bill isn’t dead yet. According to Speaker of the House Melissa Hortman, sports betting’s chances are at 60/40. Of course, even if it passes the House, the real challenge remains in the Senate, where the bill’s odds are far worse. And, of course, there are competing bills, an all-out brouhaha between tracks and tribes, and several questionable policies being kicked about. The Minnesota legislative session ends on May 20.
Wyoming considers college prop betting ban: Per Sports Handle, “The Wyoming Gaming Commission asked staff to put together proposed rules for the prohibition of college player prop bets and punishments for athlete harassment to be discussed at a future meeting.” Wyoming would join a growing list of states that have prohibited the wagers at the NCAA’s behest (9 states had already restricted these wagers): Ohio, Maryland, Vermont, and Louisiana (goes into effect on Agust 1, 2024).
Mississippi mobile betting hopes dashed: When the Mississippi legislature ended its 2024 session last week, mobile betting withered and died on the vine. According to PlayUSA’s Matthew Kredell, who spoke with members of the conference committee, “a lack of consensus among Mississippi casinos and Senate concerns regarding increased gambling addiction doomed the bill, but other factors played a part along the way.”
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The Slap (on the Wrist) Heard Around the Gambling World
Scott Sibella was sentenced last week for allowing bookie Wayne Nix to gamble $120,000 in unreported cash at the MGM Grand Las Vegas in 2017. Sibella, the President of MGM Grand at the time, failed to file a suspicious activity report.
As the Las Vegas Review-Journal reported in January, “Sibella admitted to knowing Nix ran an illegal bookmaking business but still allowed him to gamble.”
Following a guilty plea, US District Judge Dolly Gee sentenced Sibella to one year probation, 200 hours of community service, and a $9,500 fine.
Many believe Sibella got off very lightly, as he was facing a possible five-year prison term and a quarter-million-dollar fine.
The situation has also led to criticisms of Nevada’s title of the “gold standard” regulatory regime.
Sibella’s trials and tribulations aren’t officially over. Matthew Bowyer, the bookie involved in the Shohei Ohtani-Ippei Mizuhara case, was a frequent player at Resorts World, where Sibella landed after his stint at MGM Grand.
As I wrote earlier this month:
Sticking out like a sore thumb is the fact that Sibella was President and COO when Resorts World opened its doors in June 2021. He was removed from that position in September 2023, which places him at the property when, as ESPN reports, Mizuhara was wiring money to marker accounts at Resorts World and Pechanga Casino in California. According to ESPN, Bowyer lost $7.9 million from June 2022 to October 2023 at Resorts World.
The Nevada Current was happy to make the Sibella connection in an article yesterday, noting, “State gaming regulators are said to be inquiring about Sibella’s relationship with Bowyer, according to a source who has agreed to be interviewed by the GCB. Agents may also be re-examining their earlier exoneration of Sibella, according to the source.”
California Sports Betting Is on Tribal Time
FanDuel and other commercial operators are offering a mea culpa to California tribes for their shortsighted approach to opening the California mobile sports betting market in 2022.
The tribes have been more than happy to stretch out their hands and let the commercial operators kiss the proverbial ring. Still, they’re also making it very clear that they will be the sole deciders of when and how mobile betting comes to California.
As Ben Fawkes noted on X: “No predictions on when California will legalize sports betting from the panel today. But it’s clear that there is still a LOT of mending to do in the relationship between big operators and tribes. Sounds like we’re a ways off from anything happening.”
This may be difficult for some to hear, but it needs to be said: Yes, the relationship can be mended, but there is no compromise position between these two groups. The California tribes will not become empathetic to the plight of commercial operators because they’ve been acting friendly.
This quote from a SportsHandle article written by Mike Seely perfectly sums up the tribal perspective:
“Justin Barrett, the treasurer of Oklahoma’s East Shawnee Tribe, there’s a tribe in Arizona that summed up its relationship with commercial partners like so: “We date our vendors for a year before we sign a deal.”
Or, as Andrew Alejandre, the tribal chairman of the Paskenta Band of Nomlaki Indians in Northern California, said (per Sports Betting Dime), there’s no chance outside interests will call the shots. When someone comes in and tries to set up shop, that’s not going to happen.”
Seely quoted Alejandre as saying:
“Building relationships, that takes time with tribes. We’re not going to trust you. Do you know the years of trauma we’ve been through? Tribes are still getting screwed to this day.”
These statements align with comments from Victor Rocha during his recent podcast appearance. According to Rocha, the tribes will decide how it happens, and if the big operators don’t like it, “There are other white-label companies that will come in and fill the spot if those guys don’t want to play.”
As Rocha said on the podcast, the current timeline is a retail push in 2026 followed by a mobile effort in 2028 if, and that’s an important if, everything goes as expected.
Around the Watercooler
Social media conversations, rumors, and gossip.
Not a new problem.
The YouTube algorithm fed me this very interesting exchange between Bill Burr and Bill Maher while I was puttering around the house and checking things off my to-do list.
At around the 25-minute mark, Burr starts talking about growing up in Boston and brings up an old friend who was betting sports and riding the Houston Rockets. He was losing his shirt and so frustrated he called information in Houston and asked for Olajuwon, thinking he would get Hakeem on the phone and give him hell for playing so poorly.
The story occurred pre-legalization, even pre-internet betting. So again, it’s not a new problem.
Stray Thoughts
Lawmakers may have a pet issue or two, but their real superpower is knowing a little bit about a lot of things. So it’s not surprising to hear comments like this from Elizabeth Suever, VP of Government Relations for Bally’s, who said lawmakers typically aren’t educated on iGaming and don’t understand millions in tax revenues being left on the table at last week’s SBC Summit North America.
According to Robert Linnehan, who was reporting on the panel, “Most don’t understand that this gaming is happening in their states despite being illegal.”
There is some truth to this. Many lawmakers are neophytes when it comes to gambling and need a crash course on the issue.
But lawmakers are also really talented when it comes to playing dumb—I’ve witnessed this firsthand. Lawmakers know what they want to know and don’t always want you to know what they know.
In many cases, they are well aware of the tax revenue being left on the table, aren’t blind to the existence of the black market, and grasp the cannibalization discourse. The hard-to-pin-down reasons and references to unresolved debates are, in many cases, a smokescreen.
So why play dumb publicly? There is a lot of behind-the-scenes horsetrading going on, and playing dumb and pointing to concerns about social harms or cannibalization is a lot easier than explaining you’re trying to negotiate a hostage exchange for your votes.