Why Is The NFLPA Suing DraftKings? | Sports Betting News | LSR Podcast 246
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Why Is The NFLPA Suing DraftKings? | Sports Betting News
Sealed court documents show that the NFL Players Association is suing DraftKings for a potential breach of contract, but which one? Plus, sportsbooks put millions more dollars into the effort to legalize sports betting in Missouri, Nebraska’s chance at passing a bill in 2024 dies, the AGA wants regulators to look into sweeps, and Massachusetts gets serious about talking limits.
Full transcript
Matt Brown (00:14):
Hello and welcome to episode number 246 of the LSR Podcast. My name is Matt Brown, joined each and every week by the brightest minds and all of the gaming industry. With me, I have your friend and mine, Adam Candee. You can find him on the Twitter machine; two E’s, no Y on that last name of Adam Candee. If you hate yourself, you can follow me @MattBrownM2 if you haven’t done so already. We do appreciate any subscriptions. If you want to go ahead and rate and review, we appreciate that too. Go ahead, do that on all of your favorite podcasting platforms. We’ll talk about some Massachusetts stuff and AGA memo that’s a little bit interesting, Nebraska as well. And then some DraftKings notes, but we’ll go ahead and kick things off here with another DraftKings story that’s coming out, and it’s DraftKings and the NFLPA.
Adam Candee (00:57):
Yeah, Matt, we spent the last few weeks talking about the DraftKings surcharge that has now gone away, and right before we began recording this podcast on Wednesday, news broke of a suit in civil court in New York that came out on Tuesday actually, in which the NFLPA is suing DraftKings. Now, we have to be clear that most of this suit is under seal, so we don’t have specific information at the moment as to what it’s about. However, we’ve done some asking around already, and we’ve done a little bit of poking back into some old documents, and our best guess at the moment is that this could have to do with the DraftKings Reignmakers products, the NFT product that was recently shuttered, and we go back into the explanation for that, that was given by DraftKings at the time, and it discussed legal issues as one of the reasons that it was shut down.
(01:56):
We have an article by Matthew Waters up at legalsportsreport.com right now. If you go into this article, you can see that a company called One Team Partners that was in the middle of this deal, the NFLPA is owed $32.4 million by One Team Partners, according to a 2023 annual report that is a commercial rights holder and arm of eight players associations and tens of thousands of college athletes, according to its websites.
(02:28):
You go deeper into this thing, and it starts to look pretty clear that this could be a part of it. So we’ll of course be watching to see what’s going on, but it’s very interesting to me, Matt, the timing of this as we get very close to the beginning of the NFL season. This is some very interesting press when it comes to the NFLPA and DraftKings, who in theory, the league, the Players Association, the sportsbooks, have all been working arm in arm here for the last few years in order to try to have that rising tide lift all boats, and we’re seeing a little bit of a rift in that right now.
Matt Brown (03:07):
The pandemic was a very interesting thing, Adam. Some obviously horribly terrible things came out of the pandemic. Some things actually rose and were good out of the pandemic. Me personally, one of the things, whenever you’re sitting at home and you’re bored, there’s nothing else you can do. You do have the internet, right? You can’t go outside, you can’t do whatever. You got the internet, so you dabble in crypto a little bit, you acquire some crypto. Crypto goes way up a ton. “Hey, that’s great.” I have the worst stock portfolio in the history of humankind, but I bought all the stocks and I bought all the gaming companies and all the airlines when they went to pennies because I’m like, “People will gamble again. People will fly again. Everything will be fine. Hey, good stuff there.”
(03:46):
Let’s talk about the horrible things that came out of the pandemic from a, when you get bored standpoint, and that’s NFTs there. Adam, let me tell you how many pictures of things that I spent real money on that are now worth probably less than zero. If there’s a way for a thing that is … Because the space it’s taking up on whatever cloud that it’s on out there or whatever blockchain and whatever, that space that it’s taking up is actually probably costing more than the thing is worth right now to all of that. NFTs, so dumb. Oh man, so dumb. I tried to hold off as long as I could. I thought, I had conversations with myself in the mirror, Adam, going, “What are you doing, idiot? Why are you buying these things that are inevitably going to go to zero?” And the reflection in the mirror that was talking back to me was right. And so all of those things that I have are now worth zero, and like I said, probably less than zero actually.
Adam Candee (04:45):
How often do you listen to the reflection in the mirror? Because I feel like those could be some interesting conversations for us to be part of here, maybe on the LSR++ podcast.
Matt Brown (04:54):
Yes. I’ll send you. If anybody out there wants a duck dressed up like Donatello, I got one of those. If anybody’s looking for this little man whose head’s made out of a sun, called a Sunny, I got all that. I got all these things. So anyway, they’re out for sale.
Adam Candee (05:13):
I remember this. I remember, actually-
Matt Brown (05:15):
They are for sale, Adam.
Adam Candee (05:16):
I remember sitting there with you and our friend, Kelley Bydlon. We were going over the Top Shot and all that stuff.
Matt Brown (05:22):
Oh, yeah.
Adam Candee (05:23):
Oh, yeah. Big time stuff, right?
Matt Brown (05:25):
Yeah. I look back, and then we’ll move on here, I had a LeBron Top Shot where you remember back in the day, LeBron, he shot this three, and as soon as he shot it, he turned and he looked at the bench and he just went like … He knew it was going in. For the people watching the video, you see what I’m doing. For the audio people, I’m raising my hands because LeBron just turned his back to the shot, turned to the bench and raised his arms up in the air and all this. It was a limited edition thing, all this like that. I get it. At one point, someone offered me $2,700 for that Top Shot, Adam, and I go, “Yeah, right. This thing is going to be worth 10 grand.” It’s worth about 10 cents right now in all of that. So yeah, that’s just, that’s my NFT story just over and over and over and over again.
Adam Candee (06:15):
Oh, no.
The effort to legalize sports betting in Missouri
Matt Brown (06:15):
Yeah, that’s just how it goes. Just how it goes. It is what it is. Let’s go to the great state of Missouri. We talked a little bit about them last week, but we got some updates.
Adam Candee (06:25):
DraftKings in the news for another reason here because now that we are officially certified to have online sports betting on the ballot in Missouri this November, we know that DraftKings and FanDuel had put in $6.5 million into the push to get this onto the ballot for the signature gathering effort. And now, according to reports out of the Secretary of State’s Office, $3.5 million more put in by DraftKings to try to pass online sports betting in Missouri. And you can assume that will go to persuasion efforts, whether that is mail pieces, whether that ends up being TV ads, digital ads, knocking on doors, whatever it might be. DraftKings has put in $3.5 million toward the Missouri ballot effort, meaning we’re closing in on $10 million between the two major sportsbooks.
(07:16):
Now, Pat Evans has been tracking this very closely for us. We assumed we might see a matching number from FanDuel or something similar from FanDuel because if you go back over the history of these things, whether it’s California, whether it’s Florida, these two sportsbooks have moved in concert to try to advance the cause of legal sports betting when they’ve been working together. We have not seen that yet from FanDuel. Of course, that doesn’t mean we won’t see that from FanDuel, but want to be explicit about saying that this is just the $3.5 million from DraftKings that has been put in at this point.
(07:50):
So again, if you’ve been watching the Democratic National Convention at all on television this week, you heard them say multiple times, “We are just 11 weeks from election day,” which, my God, just to think about that is-
Matt Brown (08:02):
Right.
Adam Candee (08:03):
Wild on its own. And if we’re 11 weeks from election day, keep in mind, we’re about seven weeks from the start of voting in most places. And so you will be seeing the ramp up if you are in Missouri about legal sports betting. We’ve heard some rumors as well, unconfirmed at this point, that there could be some interesting opposition to that ballot measure in Missouri. When we have that confirmed, we’ll talk a little bit more about it, but DraftKings, as of now, $3.5 million in support of online Missouri sports betting on the ballot.
Matt Brown (08:36):
What does Andy Reid have against sports betting?
Adam Candee (08:40):
Well, does DraftKings rewards or do Caesars rewards, can you redeem directly for a double bacon cheeseburger or is it something that’s a little bit more opaque than that?
Matt Brown (08:49):
I don’t think you can. Maybe the gift card, then you have to get the physical gift card and go to the Wendy’s or whatever it is or something like that.
Adam Candee (08:55):
Maybe the problem is that Andy Reid was only promised an NFT of a cheeseburger as opposed to an actual cheeseburger.
Matt Brown (09:02):
But here’s the thing though, Adam, that NFT is going to be worth 10x what the actual cheeseburger is worth. Just wait and see. You got to just wait and see.
Adam Candee (09:10):
Absolutely. No question about it.
Nebraska’s chance at passing a bill in 2024 dies
Matt Brown (09:11):
That’s the way it works. Let’s head to Nebraska and maybe, yeah, not some great news there.
Adam Candee (09:18):
Not terribly surprising. When we talked about this last week, we referred to the chances for Nebraska to get online sports betting onto the ballot in their special session as an underdog, and it turned out that that dog will not hunt. The special session after three weeks has come to an end in Nebraska without online sports betting being part of the package to offset property tax relief. We’ve seen that Nebraska does have an appetite for this, though. Governor Jim Pillen, who called the special session, also has promised a priority bill, meaning it will be one of the ones getting some earlier consideration in Nebraska for the upcoming legislative session in 2025.
(10:01):
So if that happens, you still could see what was the most likely ultimate outcome here, which was that it was going to go onto the ballot for 2026. Now, if you don’t know this already, Nebraska does have legal retail sports betting in person, not online as of now, but there had been also a group of 13 legislators who penned a letter coming out against online sports betting at the end of last week. That signaled, I think, to everyone watching from the industry side that whatever prospects this might’ve had left to make it into the special session were pretty well dead, that there’s still a little bit of convincing that will need to be done from the industry side if they want to get this passed in Nebraska.
Matt Brown (10:47):
It can’t always be rainbows and unicorns here on the pod. Sometimes we have to talk about this. We have to talk about states that aren’t going to get it done, and everyone inside the state is sitting there going like, “Guys, how does everybody else have this and we don’t have this?” And then you just have to make the explanations like, “Because legislature, that’s why.”
Adam Candee (11:06):
When do we get to start talking about rainbows and unicorns, by the way? I feel like I haven’t been able to get my brony on on this podcast before.
Matt Brown (11:13):
Well, I can tell you, if you want the NFT of one of those, I probably have that too, so I can-
Adam Candee (11:17):
Actually, yeah, let’s talk after.
Matt Brown (11:18):
Yeah, I could probably get you one of those. Hey, cheap, cheap price. It’s on sale, Adam, if you can buy it.
Adam Candee (11:22):
On the low.
The AGA wants regulators to look into sweeps
Matt Brown (11:23):
Let’s talk about a memo here that is a topic that … Listen, we have talked a lot about the PrizePicks and Underdogs of the world, but there are other places out there that are operating without gaming, full gaming licenses and whatnot, and so the AGA put out a memo addressing that a little bit.
Adam Candee (11:44):
I thought this was interesting that the American Gaming Association has been circulating a memo that is asking regulators to take a closer look at the sweepstakes model of casino and gaming. And if you’re listening to this podcast, chances are I don’t need to explain sweeps to you. You understand pretty well what we’re talking about with sweeps. Largely, we’re talking about these models where you see it in casino, you see it in sports betting to a degree, in which it is able to operate in a gray area of regulation, and the American Gaming Association of course represents not only some land-based casinos, but also some of the online operators as well. And so the language in the AGA’s memo talked about asking regulators to look because, “It could be potentially skirting laws and regulations via the sweepstakes model,” in there.
(12:46):
Look, anybody, again, who is listening to this podcast, chances are if you’re this deep into the industry that you listen to these two jabronis here talk every week about what the gaming space looks like, you probably have either an interest in sweeps or an investment in sweeps, or some sort of other means of being interested in what goes on in sweeps. Same for our parent company. It’s not anything that I’m telling tales out of school about here. It will be very interesting to watch to see whether state regulators pick up any farther on this.
(13:20):
Really, we haven’t seen a lot of regulatory action in this space before. We saw, previously, Michigan take action against three sweeps model operators, and essentially, it was just a cease and desist to stop operating within the state of Michigan. Haven’t seen a lot of follow-up on that as yet. We are hearing some rumblings that other states could take a closer look at it, but as of right now, more just interesting to see that the AGA is asking regulators to pay attention to the issue.
Matt Brown (13:51):
Yeah, speaking of C&D’s, another one that came through here about an hour before we started recording on the podcast here, Adam, yet another state has sent something to Bovada for them to quit operating in their state. So Ohio now no longer taking action … Well, I should say Bovada no longer taking action from people in the state of Ohio. That now makes 11 different states that are no longer inside the Bovada umbrella, if you will. Nevada; New Jersey; New York; Maryland; Delaware; Michigan; Colorado; West Virginia; Connecticut; Washington, DC; and now Ohio added to that list. And it’s imagined, as we’ve seen in the past here, Adam, we have seen a lot of states and they see other states doing things and they go, “Well, hey, why aren’t we doing that?” And then they start to go and then they want to do it. I wonder just how many, whenever we’re doing this podcast six months from now, have decided to go ahead and do the same thing and follow these 11 states that have already done this?
Adam Candee (14:54):
Very interesting to see, especially when it comes to Bovada, and I’m going to give the legal disclaimer here for the LSR podcast. We are not saying that Bovada and offshore sportsbooks are the same as when we talk about cease and desists-
Matt Brown (15:08):
Correct.
Adam Candee (15:09):
When it comes to sweeps, they are completely separate issues that are not coming from the same place. But when it comes to Bovada in particular, Matt, what I find interesting about this is that that adds Ohio to New York and you start to get toward closer to critical mass when it comes to the states that really matter to the offshores. We haven’t seen it yet, California, Texas, et cetera, but of course, those are the ones where you start to wonder, “Will this be something that reaches more of a tipping point?” It also is, as you’ve mentioned in the past, just Bovada, known as more of a rec book as opposed to some of the larger ones that also are known to take action from inside the United States from some of the sharper players. So we will keep very close eyes on this moving forward when it comes to the offshore sportsbook industry.
Massachusetts gets serious about talking limits
Matt Brown (15:58):
Adam, let’s take it home here. Talk about some news over there in Massachusetts.
Adam Candee (16:04):
Yeah, Massachusetts has been in the news consistently because of its regulators. We’ve talked plenty about the Massachusetts Gaming Commission and its meetings, and the most recent meeting that came out of last week showed that the MGC is serious about the idea of having an open discussion about players being limited. Think back a few months. They held a forum on this. Now, is it a forum if nobody shows up? Did that tree fall in the forest if nobody heard it? It’s that sort of thing from a few months ago. Now, what the MGC is saying is, “We are not hoping that operators show up. We are expecting that operators show up to this discussion because the Massachusetts Gaming Commission really has been one of the first that we’ve seen that has been willing to take on the discussion of limiting.”
(16:58):
Again, we’ve talked about it plenty on this podcast when it comes to players being limited, and where that fits into the overall model, not only for regulated sportsbooks, but into the overall sports betting ecosystem, as we just discussed offshore a little bit, but that should be upcoming within the next couple of months from the Massachusetts Gaming Commission. We don’t know how open any of the regulated sportsbooks will be in discussing what they consider to be proprietary information about how much action they take from certain players, who they limit, who they ban, and so on. But I think just having the open forum of the public being on one side and sportsbooks being on the other side and there being … I’m not going to say a referee, but at least a very interested regulator in the Massachusetts Gaming Commission in the middle, will be interesting theater for us to keep an eye on.
Matt Brown (17:49):
All of these stories and more, all the words over at legalsportsreport.com. So please go in. That site, absolutely free, as is everything we do, absolutely free. So go in, take in all the great words that Adam and company are writing over there. Again, they listen, they read, they summarize so that you don’t have to. Guys, again, if you want to follow Adam on the Twitter machine, Adam Candee, two E’s, no Y, @MattBrownM2 for me. Adam, we’ll discuss here as we get off. You know what? I’ll give you a two for one here on these NFTs, and so we got some deals to make when we get off here.
Adam Candee (18:23):
Oh, baby, give me the LeBron and the My little Pony-
Matt Brown (18:26):
Yes.
Adam Candee (18:26):
And I might even have a plug nickel for you.
Matt Brown (18:28):
I’ll tell you what? I’ll throw in this duck dressed like Donatello from the Ninja Turtles as well. How about that? I’ll throw that in.
Adam Candee (18:34):
Heroes in a half shell, turtle power.
Matt Brown (18:36):
Yeah, I’ll just throw that in for free while we’re at it, my friend. For Adam, I’m Matt. Talk to you guys next week.
The post Why Is The NFLPA Suing DraftKings? | Sports Betting News | LSR Podcast 246 appeared first on Legal Sports Report.
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