What The Fliff Is Going On?

Sweepstakes operators are no longer little fish in a big pond, and their presence is getting harder and harder to ignore.

Sep 25, 2024

NEWS: Social sports betting operator Fliff and sweepstakes sites are getting harder and harder to ignore.
BEYOND the HEADLINE: VGW grabs a stake in Jackpot.com.
WAY BEYOND the HEADLINE: VGW creates a new role: Head of Live Casino.
VIEWS: Is South Carolina in play for sports betting in 2025?
NEWS: Casino smoking bans are incredibly divisive.
AROUND the WATERCOOLER: Another week, another negative sports betting column.
STRAY THOUGHTS: Space constraints.

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Sweepstakes Sports Betting Site Fliff Making Waves

Sweepstakes sites have tried to stay off the radar, but staying off the radar is hard when you’re swimming laps in Scrooge McDuck’s vault.

According to the Australian Financial Review, VGW’s 12-month revenue (to June 30, 2024) reached $4.2 billion, with profits up 30% from $357 million to $336 million [I converted these numbers from AUD to USD].

AFR is also reporting that “VGW paid shareholders a $360 million dividend this year. Last year, the company paid out (AUD)$318.9 million in dividends, with (AUD)$222.2 million of that going to “key management personnel.””

And then there is Fliff. As reported by Earnings+More, “social sportsbook operator Fliff is thought to have got off to a flier with the start of the NFL season and is seeing its valuation soar as it takes advantage of its non-regulated status in states such as California and Texas.”

“They could be so big in California and Texas in three to five years’ time that FanDuel and DraftKings could end up being only minor players,” an industry insider told E+M.

That helps explain the increasing backlash against sweepstakes sites, which has led Fliff and ten other companies to form the Social and Promotional Gaming Association (SPGA) to counter the critics.

As an SPGA spokesperson told STTP:

"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.
"Millions of American adults enjoy the games offered by SPGA members, and it's not hard to see why. 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."

Also of note, Indiana Gaming Commission (IGC) Executive Director Greg Small resigned to become Head of Legal & Government Affairs with sweepstakes sports betting operator Fliff.

Beyond the Headline: VGW Gets Into the iLottery Business

VGW has acquired a 13.9% stake in British lottery services company 99Dynamics, which operates Jackpot.com, a lottery courier service that has been expanding in the US and is now available in six states.

Per Casino Reports:

“The acquisition, reported by the Australian Financial Review, is valued at $25 million and positions VGW to further capitalize on the burgeoning U.S. lottery market, extending its presence in one of the world’s most lucrative gaming sectors.”

VGW, which operates Chumba and Luckyland Casino, as well as Global Poker, is considered the most successful sweepstakes gambling site in the world. However, there is increasing regulatory pressure on sweepstakes sites, with Michigan and Delaware sending sweepstakes operators cease-and-desist orders and the American Gaming Association urging other states to follow suit.

The most vocal critic has been Howard Glaser, Light & Wonder’s head of governmental affairs, who recently said, “It’s time to pull the alarm bell on this one, folks. Lurking behind this mushy-sounding term [‘sweepstakes casinos’] is a rapidly growing scheme of questionable legality that lets people play online casino games and wager real money—run by operators that skirt regulation and licensing, offer no player protections, and siphon revenue from state governments.”

In its memo, the AGA wrote:

“Gaming regulators and state attorneys general should investigate companies or platforms that offer casino games or a form of sports betting under the “sweepstakes” model to determine whether or not these operators are in compliance with their respective laws and regulations and take appropriate action if not. Where state laws and regulations are not clear, legislatures should consider enacting legislation to prevent unlicensed operators from exploiting loopholes in sweepstakes regulations to offer online real money gambling.”

But like the SPGA companies, VGW is not remaining quiet.

“We entirely reject several of the AGA’s assertions,” a VGW spokesperson told the Financial Review. “We have full confidence in our compliance with all laws and regulations where we operate.”

Way Beyond the Headline: VGW Appoints New Head of Live Casino

Virtual Gaming Worlds (VGW) isn’t stopping at online lottery, as the company looks to be prepping for an entry into the live dealer space. According to Bonus.com, VGW has appointed Graciella Anthony, former Head of Live and Table Games at Entain, as its new Head of Live Casino.

As Bonus.com reports, several VGW competitors in the sweepstakes space already offer live dealer games.

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Sports Betting 2025: Is South Carolina in Play?

“South Carolinians will see a renewed major push for legalized online sports betting in January when the General Assembly reconvenes,” the Charleston City Paper reports. “Despite two recent legislative failures and a pair of new studies that highlight gambling’s social costs.”

The two reasons cited are the potential tax revenue and momentum (the availability of mobile betting in North Carolina and ongoing efforts in Georgia).

However, on the first point, South Carolina has been running surpluses for several years, including a $600 million surplus this year. A 2023 South Carolina sports betting bill estimated it would generate about $20 million per year, meaning money isn’t going to drive legalization.

South Carolina flirted with legalizing sports betting in 2023 when the legislature considered two online gambling bills, one of which would have legalized online horse racing and the other sports betting.

The horse racing bill passed the House but was not taken up in the Senate. The online sports betting bill had even less success.

“Despite a strong push by proponents and almost $300,000 in lobbying support from major industry players like the Sports Betting Alliance, the legislation died along with the horse-race gambling bill in May,” the Charleston City Paper said.

Also standing in the way is Gov. Henry McMaster. “The governor has always opposed legalized sports betting and campaigned against it during the 2022 gubernatorial election,” McMaster spokesman Brandon Charochak told the Charleston City Paper earlier this month. “His position remains unchanged.”

So, to answer the question posed in the headline: No.

Smoking Becoming an Incredibly Divisive Issue

Casino workers and public health advocates have been pushing states like New Jersey, Pennsylvania, and Nevada to end smoking inside casinos.

The industry, and even some Unions, oppose smoking bans, arguing they will be bad for business and therefore cost the industry jobs. Casinos have put forth compromises, including investing in technology to mitigate the harm of second-hand smoke.

Rep. Dina Titus was recently criticized for a statement she made about the safety measures casinos have put in place:

“If you go anywhere on the Strip, they have the very latest technology. It’s not the low ceiling, old-time places that are so smoky. Even some of the slot machine banks have filters on the side that suck out the bad air,” Titus answered about efforts to ban casino smoking.”

That didn’t sit well with advocates.

“Given the support for smoke-free casinos from patrons, working people, public health officials, and the public at large, we encourage Rep. Titus to support her constituents and use her role as the Congressional Gaming Caucus chair to push the industry to end this outdated business practice,” said Americans for Nonsmokers’ Rights (ANR) President and CEO Cynthia Hallett.

Further reading:

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Around the Watercooler

Social media conversations, rumors, and gossip.

An Atlantic article by Charles Fain Lehman calling for a sports betting ban has caused a stir on Gambling Twitter, and the article is getting the attention of some pretty big X accounts.

Voices within the industry certainly disagree. As Underdog Fantasy’s (a newsletter sponsor) Dillon Borgida tweeted:

“I believe gambling should be legal and regulated, but I'm open to people questioning that—it's a nuanced discussion. That said, it's frustrating to see another piece in a national publication implying that sports betting didn't exist before 2018 and doesn't currently exist in unregulated states. I still believe the illegal sports gambling industry in the US is much larger than the legal one and more damaging to consumers who are at the highest risk. Saying "no legal sports gambling, no sports gambling industry" is simply incorrect.”

As do some RG advocates:

While I don’t think the toothpaste is ever going back in the tube, the sentiments from the non-betting public (channeled through the high-profile accounts) should be alarming.

Stray Thoughts

No time for stray thoughts, Dr. Jones — I have some, but I’m at the Substack email limit.