You've Been Targeted For Termination

In a move that is anything but standard operating procedure, some affiliate deals are being put on hold in the lead-up to Super Bowl LVIII.

Jan 30, 2024

VIEWS: The regulated market was supposed to put an end to questionable practices, but it’s failing in several respects.
NEWS: Alabama could be 2024’s mobile sports betting dark horse, but a lot of convincing still needs to be done.
BEYOND the HEADLINE: Going to the source to gauge the actual chances of online sports betting in Alabama.
QUICK HITTER: Bettors view and use responsible gambling tools quite differently than experts expected.
AROUND the WATERCOOLER: Starting rumors and conflicts of interest.
STRAY THOUGHTS: Conventional wisdom isn’t always wise.

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Affiliates Get the Short End of the Super Bowl Stick

The legal, regulated sports betting market was sold as a bastion of consumer protection, a cleansing light to bring integrity to the online gambling sphere, but not everyone is satisfied with the results.

We hear from many disgruntled bettors about being limited or banned by licensed sportsbooks. Regulators are also trying to come up with a coherent policy regarding palps.

And now we have this.

At least one regulated sportsbook (left unnamed) has made an unprecedented decision in the lead-up to Super Bowl LVIII. In an email obtained by Straight to the Point, a significant operator in the regulated US sports betting space relayed to some of its affiliate partners that it is cutting off new affiliate registrations around the Super Bowl from February 1 to 11.

According to the email, “A vast majority of the customers who come in at this time are bonus hunters, not interested in being a returning customer to our book… [that] will not reap an ROI to the business.”

This message was sent to select affiliates, as the operator said it plans to turn off “the majority” of its network for the stated period.

I’ve been discussing the possibility of increasing regulation on affiliates, but regulators may also want to look at how the industry interacts with affiliates.

This is not the environment we were promised when everyone was trumpeting the above-board behavior and transparent oversight of the legal betting industry. We need more of that cleansing light.

Is Alabama the Real 2024 Dark Horse?

I’ve speculated that online gambling (sports betting and casino) would get shut out in 2024, and even though we’re less than a month into 2024, that prediction looks pretty solid.

The top sports betting candidates all have hurdles to overcome. The best online casino candidates are being taken off the board one by one, with online casino efforts in New York, Indiana, and New Hampshire all but dead in 2024.

Unsurprisingly, eyes are turning to potential dark horse candidates.

On Monday, I downplayed the possibility of Ohio being the dark horse online casino candidate. Maybe it’s Maine or Louisiana, which I wrote about here and here. But probably not.

The actual dark horse appears to be Alabama sports betting, which starts its legislative session in early February.

“If you had Alabama authorizing casino gaming on your bingo card this year, you might have a winning entry,” Howard Glaser, Global Head of Government Affairs and Legislative Counsel at Light & Wonder, recently said on LinkedIn. “The House is diligently working on a draft constitutional amendment to establish Class III gaming, sports betting, and a lottery.

As reported by 1819 News last week, a group of Alabama lawmakers plans to introduce legislation to legalize casinos, a state lottery, and sports betting. Surprisingly, the bill, per 1819 News, would authorize online sports betting.

“Each Class III gaming operation licensed by the commission may also apply for one sports gaming license. All other sports gaming licenses not associated with a Class III gaming establishment will be issued via the commission. Online sports betting will be allowed. However, no other types of gaming will be allowed online.”

Legalization would occur through a constitutional amendment. That means a 3/5 majority in both chambers followed by a ballot measure. Casinos would also require local approval.

Casinos have been on the Alabama legislative radar for two decades, but momentum for gambling expansions has been building in recent years.

In November, House Speaker Nathaniel Ledbetter expressed his support for increased regulation of gambling, legal and illegal. As the Alabama Political Reporter noted, “Speaker Nathaniel Ledbetter, R-Rainsville, has made no secret of the fact that he’s on board with the gambling legislation that will emerge from a gambling committee he put together.”

Of course, we are talking about Alabama.

In December, Alabama State Sen. Chris Elliott invented a new reason to vote against gambling expansions:

"I think it is pretty reasonable to say it would be a mistake to put gaming on the presidential election [ballot], that it would drive up Democrats' turnout. And that is not something that the majority in either chamber should want to do. That's something that I'm going to be watching for. Obviously, we want to be paying attention to what's going on in CD-2, and if there is a chance for a Republican to win, I certainly don't want to torpedo it by some action of the Legislature."

Beyond the Headline: On the Ground With Ronnie Jones

When gambling is discussed in SEC country, the first person I look to is former Louisiana regulator Ronnie Jones.

Jones had a lengthy LinkedIn post about Alabama, where he echoed Glaser’s opinion that Albama is trending positively but said, “There’s no white smoke” coming from the capitol just yet.

“Representative Andy Whitt seems to be the adult in the room as the discussions evolve. He characterized the prevalence of illegal gambling in the state as the “wild west” and called on fellow lawmakers to draft and pass a comprehensive gaming bill in the upcoming session,” Jones said, noting even Gov. Kay Ivey has come around.

But again, we are talking about Alabama.

Jones mentioned the strange belief that gambling would bring out Democrat voters (which I discussed in the previous header) but brought up another issue.

“A non-political cudgel wielded by opponents against a comprehensive bill is a report by the Alabama Policy Institute issued last month. I’m in no position to question the objectivity of the Institute’s work, I’ll let you form your own opinion (it’s linked below). But there is some concerning language, less academic and more hyperbolic. For example, in a concluding paragraph the report cautions that . . . “government has a responsibility to protect its citizens, not make them economic slaves . . . The traditional gambling markets—lotteries and casinos . . . would turn every smartphone into a portable casino.” Economic slaves? Portable casino? (Full disclosure: Thirty years ago, I wasn’t much of a fan of legalized gambling, but like the industry I’ve evolved. More on that later.)”

And, as Bonus.com is reporting, The Alabama Farmers Association (ALFA) and the Business Council of Alabama (BCA) have indicated that they oppose the legislation.

Jones also brought up a point we all know - people are betting, just not legally. “Find a bar, any bar just off the UA campus,” Jones implored. “Walk in and ask a dozen or so patrons if they have a sports betting app on their phone. I’m pretty sure I know what they would find. Note to API—denial is not a public policy strategy that benefits the state. The Institute seems to be channeling Casablanca’s Captain Renault, “I’m shocked, shocked to discover that gambling is going on here!”

But as is the case in most locales, Jones notes that the report gives legislators who aren’t interested in legalization cover.

Staying local, there is also a recent poll of Alabama Republicans that indicates a majority oppose online gambling. The poll used some interesting phrasing, as the Center Square reports:

“Not surprisingly, 80% of GOP primary voters oppose the expansion of gambling if it leads to increased domestic violence and child trafficking (80%), diverted money from small businesses (70%) and increased drug addiction and mental illness (80%).”

Quick Hitter: Bettors, ‘RG Tools Are For Someone Else’

The subtitle of a Sports Business Journal column says it all, “As the risk of addiction rises with the advent of mobile betting, leagues, and sportsbooks work to educate fans and develop tools to identify problem gambling. But is anyone listening?”

With RG tools usage in the low single digits, it’s a valid question.

As Sports Business Journal reported, “In surveys and focus groups, users say they regard responsible gambling tools as being “for someone else” — problem gamblers — rather than what clinicians assert them to be, self-imposed limits meant to keep them from developing a problem.”

Around the Watercooler

Social media conversations, rumors, and gossip.

There has always been a lot of chatter about influencers starting unsubstantiated rumors or not disclosing financial partnerships. It has come to a head recently, with several people calling out an account called Vegas Starfish, including my friend John Mehaffey, who penned an article on the topic called Las Vegas Social Media Has an Ethics Problem.

Stray Thoughts

It’s easy for a half-truth or even a statement lacking nuance to become gospel. For example, “There is no first strike in Karate” is a famous karate saying with many different versions, including Mr. Miyagi’s “karate for defense only.”

But it’s a translation of Gichin Funakoshi’s “karate ni sente nashi” that lacks nuance. In context, it reflects a “don’t start a fight” attitude.

Consider the following, which Funakoshi also wrote:

"When there are no avenues of escape, or one is caught even before any attempt to escape can be made, then for the first time, the use of self-defense techniques should be considered. Even at times like these, do not show any intention of attacking, but first let the attacker become careless. At that time, attack him, concentrating one's whole strength in one blow to a vital point, and in the moment of surprise, escape and seek shelter and help."

Why does this matter? It echoes another quote I like: “Whoever starts it usually finishes it.” Waiting for an attack before you defend yourself puts you at a severe disadvantage. Fights start before the first punch is thrown.

This is something to think about the next time someone spouts off some platitude that everyone nods along with. Some things are true, some are false, and some lack nuance.

Also, it’s almost always better to proactively deal with something than to react.