New Sports Betting Hope Rises From The Cornfields | Sports Betting News | LSR Podcast 243
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New Sports Betting Hope Rises From The Cornfields | Sports Betting News
A special legislative session in Nebraska is underway, with online sports betting legalization up for discussion. Plus, a Missouri ballot measure takes a key step, the latest poll on iGaming in New York shows support, and a move by PrizePicks raises questions about whether the company wants to buy or sell.
Full transcript
Matt Brown (00:15):
Hello, and welcome to episode number 243 of the LSR podcast. My name is Matt Brown, joined each and every week by the brightest minds in all of the gaming industry. With me, I have Adam Candee. You can find him over on the Twitter machine, @AdamCandee, two E’s, no Y. And if you hate yourself, you can follow me @MattBrownM2. We’ll talk some Missouri. We’ll talk some New York. We’ll talk some PrizePicks, maybe even a little bit of Underdog when it’s all said and done. But as a reminder, we are absolutely free. So if you want to go ahead, hit that subscribe button. We do appreciate it. If you want to rate and review, even better. Adam, let’s kick things off here in Nebraska.
Adam Candee (00:49):
We start in Nebraska where we’re having a discussion of a state potentially legalizing online sports betting at a time of year that normally we are not having these discussions. Most legislative sessions have wrapped up for the year, but Governor Jim Pillen in Nebraska has begun the discussion of online sports betting as part of a special session in which the unicameral — one house — state legislature is discussing ways to potentially reduce property taxes in the state and still fill a budget hole. So there is discussion of taking what is a retail-only market right now and going with online sports betting. Now, this comes with the usual caveats that we have on this podcast about if you are looking to plug a specific hole in a state budget, sports betting is not the most stable revenue source that you can look for. But of course there are benefits that we have discussed plenty of times on the podcast that come along with legalizing sports betting that are not necessarily just about capturing tax revenue that is going other places.
(01:56):
Now, we began the discussion at the state legislature yesterday in the General Affairs Committee in which you had the committee discussion going for and against, not terribly surprising, those talking about wanting it, were talking about money that is going across state borders. They had testimony from GeoComply about how many pings there have been trying to access sports betting outside of the state and then of course how many Nebraska registered accounts there are that are going to other states, specifically Iowa, where the overwhelming bulk of the traffic has gone from Nebraska. You then had some folks for the usual values organizations and Tom Osborne, the famous Nebraska former head coach and athletic director, who was against it as many in the college athletics realm have been over the years. So we’ll be watching that as the special session goes on.
(02:50):
If nothing else, it is possible that within the next couple of years if this doesn’t happen, that it will still potentially go through because Governor Pillen has talked about introducing a priority bill, one of the bills that gets taken up first in the session for this next year. So Nebraska more and more seems to be gaining some momentum. Not the largest state of course, when it comes to population that could be adding to the overall total addressable market for online sports betting, but certainly another piece of the puzzle that folks have been looking at for a while as a place that could potentially move forward. As we look at the bill, 90% of sports betting revenue would be directed to the Property Tax Relief Fund. Senator Eliot Bostar talked about how he believes that the state is missing out on $32 million in revenue and that if you wait until 2026, which would be the next chance to do this if they end up having to go through the regular legislative channels, that that adds up to closer to $100 million.
Missouri ballot measure takes a key step
Matt Brown (03:53):
If you guys have been watching television, I imagine you already know that November is pretty big this year. There’s going to be massive stuff taking place at the ballot box. And Adam, of course, I’m talking about the Missouri sports betting bill. I’m not talking about anything other than that. I’m just talking about perhaps the Missouri sports betting bill.
Adam Candee (04:11):
No. Absolutely. I understand. That trumps everything else that would be on the ballot. I understand that Missouri sports betting is the most important thing that could be coming up in November. No question about that. What we saw – wink, wink – is that we took another big step in Missouri when it comes to the potential sports betting ballot initiative. The process goes like this. If you want to put something on the ballot, you have to go gather a certain amount of signatures. That’s determined on a state-by-state basis. So they went out, did the supporters of this initiative, which include the pro teams in Missouri, DraftKings and FanDuel, who’ve put $6.5 million behind this. And also we look at the casinos who would like to get involved in this as well. They gathered their signatures. And the key step that happened is that those signatures have to be verified at the local level before they go to the secretary of state for verification.
(05:08):
So what do we mean when we say the signatures have to be verified? Well, anybody could grab a petition form and sign John Doe, John Smith, Jane Smith on there. They’re going to take a sampling of those signatures. They don’t go for every one of the more than 300,000 that was submitted, but they’re going to take a representative sample and they’re going to test those signatures to get a sense of does this have enough to clear the threshold. Now, the threshold’s in the range of 170,000. When more than 300,000 are submitted, the signature gatherers know what they’re doing in that situation. They’re trying to make sure that even if there are signatures that are names that would’ve been called into Moe’s Bar on “The Simpsons,” that you still have enough real ones that are on there.
(05:54):
Now, two weeks from now is when we will find out for sure if that certificate of sufficiency is issued in Missouri. If it is, and you would expect that at this point, if it’s made it past the signature testing level that it would be, then you would see this on the ballot in Missouri in November after years of frustration trying to get this through the legislature.
Matt Brown (06:17):
Guys, if you’re going to fake sign a petition out there, don’t go John Doe, Jane Doe, whatever. Get creative. I always-
Adam Candee (06:24):
Don’t say the names, please. I swear.
Matt Brown (06:27):
Adam, I always go with Mick Tyler. I don’t know if whatever … Which is a cross of Mick Jagger and Steven Tyler who … The two greatest front men basically of all time. And so I basically combined those two into one human being and went with this superhuman named Mick Tyler. That’s my fake signature.
Adam Candee (06:44):
I am not going to risk my job saying the sorts of names that I think most people are going to write down on that ballot if they’re trying to fake one. Let’s just say, again, go watch some Simpsons and you’ll have a good sense.
Matt Brown (06:56):
Or any of the news bloopers where they take a tweet or read a comment from a reader and is like, “This comes in from…” And it’s like always going to be something absolutely …
Adam Candee (07:06):
It’s not going to be good.
Latest poll on iGaming in New York shows support
Matt Brown (07:07):
Absolutely terrible. We talk a lot about iGaming and the future of iGaming. It probably has not gone as rapid as most of the companies out there would have liked, but Adam, you and I are at least of the same mindset that it is coming. How rapidly, we don’t necessarily know, but before it’s all said and done … I mean, this reminds me when I was a kid and the lottery in Louisiana and it kept getting voted. Everyone’s like, “Oh, we got to get the lottery. We got to get the lottery.” And it was just like it drug on and drug on and all the opposition, all the opposition, and all of a sudden one day it’s like, “Oh, we have the lottery,” and then no one even thinks twice about it ever again. And it’s been there forever. And then Louisiana became one of like the biggest gaming states in the South after that.
(07:48):
We know iGaming is going to happen in multiple states. That is a given. The timeline for that is the thing that we have not really pointed our finger at yet. And over in New York, they’re stepping there. They’re toeing the water there.
Adam Candee (08:03):
For a couple of sessions now. We’ve seen that Senator Joe Addabbo, who has been the leading voice in terms of gaming expansion in New York for a while, has been pushing the idea of iGaming at the state legislature. It really has not gone anywhere as yet. Now, the New York sports betting market has of course been one of the most lucrative in the country with that 51% tax rate, but it is a complicated gaming picture in New York because you already have tribal gaming at some upstate casinos. You’re talking about the potential awarding of downstate casino licenses that could be somewhere within the five boroughs. And now you’re having more discussion around iGaming.
(08:40):
So Senator Addabbo commissioned a poll. And I’m going to give you all the usual warnings here. Very small sample, less than 600 people, but he’s polling his own constituents to say, “How do you feel about the expansion of iGaming?” If you go to Legal Sports Report right now and you see a story from Mike Mazzeo, it has the entire question that was asked if you want to know specifically what voters were asked. But here’s the split that came in: 44% in favor, 33% against, and 23% undecided. And what’s interesting to me as someone with a political background is that Senator Addabbo didn’t seem particularly encouraged by those numbers.
(09:20):
And I as someone who is used to dealing with these types of issues the same way that Senator Joe Addabbo obviously is on a regular basis, I didn’t think that was that bad of a split for an issue that has had some challenges along the way, because when you look at a plus 11 and the fact that it’s 23% undecided, I mean, anything that would be short of a terrible break in that undecided is going to put you over 50% and puts you in a range where an issue like iGaming that is not one that I think has broad understanding, that I think has necessarily broad acceptance, if that’s polling over 50%, and I think any reasonable assumption of how that 23% undecided would break down is going to put you over 50%, if that’s where you are, you’re really not in that bad of a place. Now, again, a very small sample among one specific group of people in a very limited geographic area. However, I would’ve been worried if that were say 33 to 44 as opposed to 44 to 33.
Matt Brown (10:22):
If we look at this, Adam, I mean, I think what we’re barreling towards is we saw sports betting 1.0, 2.0, 3.0 happening right now with some of the guys falling out, some of the acquisition stuff, some of the stuff, whatever. And then once we get to the phase of sports books are no longer really in it for any sort of land grab, they’re no longer in it for any sort of massive, massive customer acquisition, and it does shift a little bit more towards retention, re-upping people, keeping people engaged, so it’s more of just engagement type of stuff, “Hey. We’ve got this client already. Let’s go ahead and make sure this person is continuing to make bets on the stuff like that,” I think we go full steam ahead on the iGaming stuff.
(11:07):
But you’ve brought up here many times on the podcast it is a different animal. People can wrap their brain around sports betting. And honestly, let’s be honest, let’s call a spade a spade here, games … I mean, I guess if you want to bet Chinese ping pong or Russian ping pong or whatever it is, something, they’d be like, “Games only happen certain times a day. It’s not a 24 hour, seven days a week, every single time, every single thing going on,” whereas if you wanted to fire up an online slot at 6 a.m., 6 p.m., 3 p.m., whatever it might be, you could do that in theory. And so while it seems the same, it is different.
Adam Candee (11:45):
The narratives that you’re working against in iGaming are different than the narratives you’re working against in sports betting. You can say sports betting’s been happening. You can talk about bookies. You can talk about offshore and say, “Hey. Why are we letting this go to places that are not in our tax coffers?” Same argument you get on something like marijuana.
It’s different when it comes to iGaming because not only do you face the headwinds culturally, not only do you face the headwinds from people having moral objections, but you also deal with casinos who, right or wrong, are often dealing with the cannibalization idea that has been debunked multiple times, but it is still an idea in where you’re getting opposition from the industry.
That’s different than when we talk about something like marijuana. I don’t remember a lot of marijuana dealers who were doing it through back rooms showing up at the legislature and saying, “Hold up. Hold up. Hold up. Are you sure you want to do this? We’re worried that this could cut into our business,” because that’s not the way that it works.
PrizePicks raises questions about whether it wants to buy or sell
Matt Brown (12:46):
Let’s talk a little bit about PrizePicks and trying to guess what they are up to as we head into football season here, 2024.
Adam Candee (12:56):
We’re going to talk about PrizePicks and then thank you for mentioning Underdog because I totally forgot to put that story onto the rundown, but we’ll talk about that in a minute as well. PrizePicks, the newsy part today for PrizePicks, they were awarded a fantasy license in New Hampshire. If you read very carefully into how that’s worded, it looks to be more toward the peer-to-peer products that we’ve seen from them in other states, but also the news that was reported last week after we recorded our podcast was news that split our staff in different camps at Legal Sports Report.
(13:32):
So the news is that PrizePicks has retained an investment bank in order to explore M&A opportunities. Now, the question becomes, is that to buy? Or is that to sell? And my initial instinct, and I talked to our old friend, Dustin Gouker, this was his too, my initial instinct was this is PrizePicks looking to find out what might a sale price look like. There were some on our Legal Sports Report staff, however, who jumped in and said, “You know what? They’re not all that far away from being able to try to apply for a sports betting license. What if they just want to find some bolt-on things that they could add in and try to make the turn to sports betting?”
(14:15):
Of course, we haven’t seen any instincts from PrizePicks to do that thus far, unlike Underdog, which has a sports betting license in North Carolina and has expressed its ambitions in that area. But what we see here is that PrizePicks is going to engage on this front. And Matt, I’m really curious what your perspective is, because, again, I started with the idea that this was definitely them looking to see what does a sale price look like before this California attorney general opinion potentially comes in a couple of months and maybe they have some intel that that might not go their way. But on the same token, Texas would still be out there, and there’s still other states in which they’re active and would be able to build their product into something bigger. So I’m really curious where you land on this.
Matt Brown (15:01):
I wonder if they are not kicking the tires on … I can only assume, given the numbers that we know, given what we’ve seen, Adam, and all that that they’re probably pretty cash rich as it is anyway right now, and then to be able to go in and look at maybe some sort of low level acquisition type deal to get their foot in the door in some of these states. I mean, I know that we know a lot of these states … A lot of these low hanging fruit have already either pulled out or gone under or whatever, but there are still some out there that have very little market share that do have at least some sort of access.
(15:37):
And I do wonder if maybe they saw what Underdog is trying to do. And what Underdog … To be fair and we’ve said this from the get-go and all that, Underdog has never made any qualms about what their eventual goal was. They were always saying, “We are going to open a sportsbook. We want to do sports betting,” et cetera, et cetera. I wonder if PrizePicks sees this and maybe sees at least a little bit of the writing on the wall that maybe this gravy train isn’t going to last forever and are trying to see if it’s viable to move into the legal space.
Adam Candee (16:04):
Yeah. Certainly going to be something interesting for us to watch as this develops.
Matt Brown (16:08):
And let’s wrap things up here. I sent you a message. And there’s no real commentary here more than anything of just the fact that we talk about being cash rich. Underdog probably is too, as they have signed a deal with Bill Belichick to come on weekly and break down film and the quote here is, “As if he were coaching that team,” and run you through the thought process of what’s going on in the NFL. I got to be honest, as a football nerd, and I’m sure you’re a football nerd too, I’m going to watch this because it’s going to be awesome, but it’s crazy to think when we talk about the DraftKings and the FanDuels and MGM, Caesars, whatever, all this stuff, yeah, it’s like, “Yeah. You know what? PrizePicks and Underdog, they got some skrilla too.”
Adam Candee (16:44):
Skrilla’s not a word I expected to hear on this podcast, but here we are as Bill Belichick has signed a deal with Underdog, as you mentioned. And if you had said to me, “In 2023, Bill Belichick will be the head coach of the New England Patriots. In 2024, he’ll be appearing on the CW on Inside the NFL and also on a weekly series with Underdog,” you would’ve won a lot of money off me betting the no on that one. So another huge name coming into the space. We of course know Mark Cuban, Kevin Durant and others are investors with Underdog. This a little different deal.
Matt Brown (17:20):
Yeah. Just wild. Again, something I’m going to watch because that’s awesome. I mean, he’s going to break down film and give us all the insights. Cool stuff. Guys, as every single week here on the podcast, everything that we talk about, you can find over at legalsportsreport.com. So please go in and take in the words Adam and company are putting on the page over there. Cannot be more proud of the work that’s going on over there with his team. Listen, Nebraska, Missouri, hey, maybe look it up. We’re talking to you, New York. Maybe a little iGaming heading your way when it’s all said and done here down the line a little bit. Apple, Spotify, Google. Go in, subscribe, rate, review. For Adam. I am Matt. Talk to you guys next week.
The post New Sports Betting Hope Rises From The Cornfields | Sports Betting News | LSR Podcast 243 appeared first on Legal Sports Report.
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