You Ain't Seen Nothing Yet
It's said that nothing is certain except death and taxes... You can add getting inundated with sports betting advertisements this NFL season to that list.
The Bulletin Board
NEWS: If you thought it was over, guess again. Sports betting advertisements will return en masse this NFL season.
NEWS: If at first you don’t succeed, try again. Bally Bet relaunches in Ohio and Arizona.
NEWS: The UAE has its sights set on becoming Macau 2.0.
NEWS: With Florida sports betting on hold, the Seminole Tribe filed its response to the West Flagler request for a rehearing en banc in what could be one of the most consequential cases in US tribal gaming history.
AROUND the WATERCOOLER: Kentucky Gov. Andy Beshear makes his first sports betting flub.
STRAY THOUGHTS: A quick opinion on gambling laws and loopholes.
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Advertising Isn’t Going to Slow Down
Q2 earnings calls were dominated by EBITDA positive talk.
As Eilers & Krejcik put it in a recent EKG Lines newsletter: “In previous quarters, operators had expressed optimism that the frothiest days of promo and marketing spend were in the rearview mirror, especially as competition dwindled, small operators disappeared, and tier-two firms focused on profit over market share.”
That trend may already be over. With the NFL season upon us (the busiest time for sportsbooks and sportsbook marketing), there are several new developments in the US that I fully expect to lead to another marketing push.
DraftKings has overtaken FanDuel (in one metric). Per Earnings+More, Truist analysts noted that in the 11 states where handle and revenue are reported, DraftKings outperformed FanDuel in handle, 37.3% to 35.4%.
Penn-ESPN and Fanatics entered or are entering the market. Penn plans to spend $150 million annually with ESPN and another $150 million on other external marketing. Fanatics has just exited its beta-testing in four states, setting the stage for a grand entrance.
Bet365 is making its long-awaited US push. In addition to heavy marketing in Ohio, “Bet365… is increasingly focusing on the US market for future growth,” EKG said. “Its [in-play] bet placement speeds were best in class—indeed, no other app was particularly close—and tester commentary was broadly positive.”
With how the pieces are currently arranged, the dreams of profitability are likely on hold. And by the time everything settles down again, one has to wonder if Florida, Texas, and/or California will be in the mix, sending marketing expenses through the roof once more.
Per EKG:
“… with the first glimmers of (adjusted) profit shining through, it’s hard to see how they get there. Flutter laid out its long-term expectations for 2030 and the most eye-catching point was cost of sales at 50% of revenue, which leaves very little wiggle room for marketing and opex. While the benefits of scale should get opex down to the required levels, marketing feels very ambitious at a projected 12.5% of revenue—unless the firm is anticipating that everyone else has given up by then.”
Narrator: Everyone hasn’t given up.
Bally Bet Returns to the Fray
After its first foray into legal sports betting fell flat on its face, Bally’s performed a complete reset. It wrote down its Bet.Works platform that it paid $150 million for in November 2020 and signed a deal with Kambi.
Kambi provides Bally’s with a proven B2B sports betting platform - Kambi’s various incarnations consistently rank in the Top 10 (and some nearer the Top 5) of Eilers & Krejcik proprietary app testing.
The new Bally Bet launched in Ohio, but as SBC Americas reports, the company isn’t shouting from the rooftops, as Bally’s is likey waiting to iron out any wrinkles before trying to woo customers.
In addition to Ohio, Jessica Welman also reported Bally Bet 2.0 is live in Arizona.
I was very bullish on Bally’s (at the time known as Twin River) when it acquired assets for a US online gambling push. In addition to Bet.Works:
It purchased the Bally’s name from Caesars
Acquired the DFS site Monkey Knife Fight (which also became a casualty of Bally’s reset)
Signed an agreement with Sinclair’s regional sports networks to rebrand them as Bally Sports - Sinclair’s RSNs have fallen on hard times
Acquired Gamesys, which has worked out so far
Success never materialized, and everything unraveled this year, causing the eventual reset by new CEO Robeson Reeves.
“On sports, we recognize that the Bet.Works acquisition did not give us the platform required to develop a competitive product. We didn’t react fast enough there, and this will not happen again,” Reeves said earlier this year, prior to the announcement of its deal with Kambi.
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Top Gaming Talent Is Heading to the UAE
Two key players in the gambling ecosystem are taking their talents to the UAE.
Former MGM CEO Jim Murren has been tapped to lead the new UAE gaming authority.
“Murren will chair a board of directors for the General Commercial Gaming Regulatory Authority (GCGRA),” The Nevada Independent reports. “Which was established to introduce a regulatory framework for a national lottery and commercial gaming.”
Joining Murren in the UAE is Kevin Mullally, a former Missouri Gaming Commissioner, who has spent the last 17 years with Gaming Laboratories Internationals (GLI).
So why am I tagging the UAE as Macau 2.0? The answer is simple: instead of bringing the biggest whales to your casinos halfway around the world, simply bring your casinos to those gamblers halfway around the world.
Per the Nevada Independent, “Wynn Resorts is building a $3.9 billion integrated resort development on the man-made Al Marjan Island in Ras Al Khaimah… Two other Nevada-based casino operators already have non-gaming locations in the UAE and other gaming companies are reportedly exploring the possibility of entering the region.”
Or, as Chris Grove put it, the UAE is a “compelling and fascinating” gaming market:
Florida Sports Betting Hangs in the Balance
As reported by almost every outlet (so I’ll keep this brief), the Seminole Tribe, through the Department of Interior, has filed its response to the West Flagler’s request for an en banc hearing. The DOI labeled the arguments “strawmen” and a rehearing “unwarranted.”
The court will now review the DOI response and make a determination to either grant or deny the rehearing en banc. If denied, West Flagler could appeal to the Supreme Court. No matter what, any plans of a Florida betting launch in time for the NFL season have been dashed.
For a good, straight-to-the-point overview of the case that is holding up legal sports betting in Florida, I’d recommend this article from Matthew Kredell.
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Around the Watercooler
Social media conversations, rumors, and gossip.
I’ve written at length about Kentucky Gov. Andy Beshear’s decision to make sports betting a central piece of his reelection efforts, but at least one lawmaker (who is running for LT. Gov.) is calling Beshear out for recent comments on who will be helped by sports betting funds.
Stray Thoughts
US gambling laws are many things. What they cannot claim to be is clear. They are convoluted, contradictory, antiquated, and possess enough loopholes to drive a solar system through. So, what you think is legal or illegal may not be. And what you think needs to be legalized in a certain way may have alternative paths.