Uncomfortable Truths
Sports betting is taking its lumps: PA considers raising taxes; MGC hands out a $450k fine; NJ bill would ban in-game betting; and yet another integrity scandal.
The Bulletin Board
THE LEDE: Pennsylvania lawmakers are considering ending promo deductions.
ROUNDUP: MGC fines DK; PrizePicks secures licenses; iCasino bests slots in PA; Santarelli joins GLPI; Hard Rock launches in CO; Quote of the Week.
NEWS: New Jersey bill would ban micro-betting (defined as all in-game bets).
QUICK HITTER: Quintenz confirmation hearing called off for a second time.
AROUND the WATERCOOLER: The latest sports betting integrity scandal.
STRAY THOUGHTS: What can possibly happen in four hours?
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The Lede: PA Effort Ending Promo Deduction Gains Steam
As STTP reported several weeks ago, a somewhat hush-hush effort is underway in Pennsylvania to eliminate the promotional deduction allowance.
“A new call to action from the Sports Betting Alliance points to a potential tax increase on mobile sports betting and/or online casinos in the state: “Right now, some Pennsylvania lawmakers may be considering a tax hike on online betting, including sports wagering, table games, and slots. With unfair tax hikes like this, everyone loses—but especially customers!” Pennsylvania already has very high tax rates, but the state does allow for promotional deductions (which STTP previously pointed to as a reason to watch Pennsylvania), which significantly reduce operator tax obligations.”
And it looks like the effort is starting to gain some momentum, as it was reported in the recent EKG Line Substack newsletter (Eilers & Krejcik Gaming is a newsletter sponsor): “We are hearing that PA lawmakers are seriously considering amending the current promo deduction policy to advance multiple policy goals.”
According to EKG:
“The state’s policy of unlimited promotional credit deductions means operators faced an average effective tax rate of 23% vs. the statutory 36% tax rate. That shortfall is drawing interest in Harrisburg, per channel checks.”
EKG is also reporting that the elimination of promotional deductions serves a dual purpose: it boosts revenue while addressing lawmakers’ concerns about excessive advertising and promotions. This approach reduces operator marketing, potentially mitigating negative media coverage.
Roundup: MGC Fines DK; PrizePicks Secures Licenses; iCasino Bests Slots in PA; Santarelli Joins GLPI; Hard Rock Launches in CO; Quote of the Week
MGC hits DraftKings with a $450,000 fine [SBC Americas]: The Massachusetts Gaming Commission fined DraftKings $450,000 for allowing customers to use credit card funds for wagers, violating state law. The investigation dates back more than two years, when DraftKings self-reported violations three separate times: May 2023, July 2023, and February 2024. In addition to the hefty fine, DraftKings must also demonstrate that it has refunded $83,667.92 to 218 affected customers, develop a corrective action plan to prevent future violations, and conduct an independent audit within 90 days to verify that no additional improper credit card transactions have occurred.
PrizePicks secures licenses in Maine and Puerto Rico [Saturday Down South]: PrizePicks recently announced it has been licensed in Maine and Puerto Rico. While the Maine story is of interest due to the previous disputes other DFS companies have had with regulators, PrizePicks is the first company to receive a license in Puerto Rico. “We’re grateful to the Puerto Rico Gaming Commission and the Maine Gambling Control Unit for their partnership and support throughout the licensure process,” Adam Packer, Senior Vice President of Legal & Compliance at PrizePicks, said in a release. “We’ve seen tremendous engagement with Arena across the country, and we’re confident that momentum will carry into these new jurisdictions.”
Online casino overtakes land-based slots in Pennsylvania [USA Today]: New Jersey has already seen online gambling revenue surpass land-based revenue, and it looks like Pennsylvania is heading in the same direction. “For the first time, online gaming overtook slot machines as the largest gambling moneymaker in the commonwealth, generating $2.48 billion in revenue. Slot machine revenues totaled about $2.44 billion, according to state officials.” STTP Thoughts: While the trend is hard to ignore (consumers are voting with their dollars), these developments won’t help iCasino supporters win the cannibalization argument.
Deutsche Bank’s Carlo Santarelli joins GLPI [CDC Gaming Reports]: Gaming and Leisure Properties announced on Tuesday the appointment of Carlo Santarelli as Senior Vice President, Corporate Strategy and Investor Relations. Santarelli joins GLPI (in a newly created position) from Deutsche Bank, where he served as managing director and was one of the most respected analysts covering the gambling industry. Recall that GLPI recently joined the National Association Against iGaming (NAAiG).
Hard Rock Bet launches in Colorado [Press Release]: Last week, Hard Rock Bet went live in Colorado, its ninth state. As the press release notes, “Hard Rock Bet is the first sportsbook operator to launch in Colorado since January 2024.” In addition to Colorado, Hard Rock’s mobile sportsbook is available in: Arizona, Florida, Illinois, Indiana, New Jersey, Ohio, Tennessee, and Virginia.
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News: NJ Lawmaker Introduces “Micro-Betting” Ban Bill
New Jersey Assemblyman Dan Hutchison has introduced legislation (A5971) that would “prohibit sports wagering licensees in New Jersey from offering or accepting micro bets.
Text of the bill is not yet available. A press release says the bill will define micro-betting as “a proposition bet placed live during a sporting event that relates to the outcome of the next play or action. It explicitly prohibits any licensed sportsbook operator from offering or accepting these types of wagers.
“The pace of micro betting is designed to keep people gambling constantly, making one impulsive bet after another with little time to think,” Hutchison said. “This bill is a commonsense step to slow that cycle down and protect individuals from the financial and emotional harms that can come with excessive betting.”
Chris Grove took exception with the term “micro-betting,” saying it’s not a specific thing, and any prohibition would draw an arbitrary line on the broader in-game betting category.
According to Grove, “‘Rapid’ and ‘real-time’ don’t create any meaning. That definition would eliminate most tennis betting.”
I would point out that the bill does define what it considers micro-betting, and that definition (valid or not) is how most people generally define micro-betting.
For example, MLB Commissioner Rob Manfred said the following during All-Star Weekend: “I firmly believe that the transparency and monitoring that we have in place now, as a result of the legalization and the partnerships that we’ve made, puts us in a better position to protect baseball than we were in before.”
But, as Comped.com noted, Manfred was not sold on micro-betting, saying, “There are certain types of bets that strike me as unnecessary and particularly vulnerable, things where it’s one single act [that] doesn’t affect the outcome necessarily.”
Quick Hitter: Quintenz Committee Confirmation Called Off Again
As was the case last week, the Senate Committee on Agriculture, Nutrition, and Forestry hearing schedule scratched Brian Quintenz’s name from its calendar, further delaying his nomination as the chairman of the Commodity Futures Trading Commission (CFTC).
Last week, plane trouble prevented a critical vote from attending (the Quintenz vote is expected to be along party lines). This week, it is unclear why the vote was called off, which, as Dustin Gouker wrote in his Event Horizon newsletter, could significantly delay a full Senate vote on Quintenz’s appointment:
“It isn’t clear why the vote was called off this time. It’s at least possible this could mean a vote won’t happen until after the Senate’s August recess.”
There’s some reporting that the White House asked for the vote to be delayed:
However, a White House official told multiple outlets, including Bloomberg, that Quintenz is still Donald Trump’s nominee.
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Around the Watercooler
Social media conversations, rumors, and gossip.
The big story of the day is a second Cleveland Guardians pitcher implicated in a betting scandal.
“Cleveland Guardians closer Emmanuel Clase, on Monday, was placed on non-disciplinary paid leave through Aug. 31 as part of Major League Baseball's investigation into sports gambling, the second Guardians pitcher to be caught up in the inquiry.”
Recall that Guardians pitcher Luis Ortiz is also reportedly being investigated for suspicious pitches.
Justified or not, it’s safe to say things are perhaps spiraling out of the industry’s control — integrity scandals, micro-betting ban proposals, tax hikes, infighting, and more.
Stray Thoughts
I have a pretty set schedule, and for about four hours every day, I disconnect from work. Some days, I’m utterly amazed at how much news can break in the gambling universe in that short window of time.
The thought of 'experts' trying to legislate a micro-betting ban is hilarious. And if they want to ban in-play altogether, they should have a look to Australia to see how effective that is at harm minimization and avoiding leakage to offshore books. (Note: it isn't, and Australia is the world leader in OSB ARPU, and its black market is massive)
When will the rotating doors spin the other way, and put people from the industry into positions of policy making?