EPISODE 195 | LSR Podcast

Raise Your Hand If You Play Fantasy Football | Sports Betting News Today


27 min
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Raise Your Hand If You Play Fantasy Football | Sports Betting News Today | LSR Podcast 195

A new study sheds light on how many young people participate in some kind of gaming activity, and it should be read closely to understand what it means. Plus, Fanatics pulls a marketing offer, new info about a DraftKings account hack, and why Minnesota sports betting legislation failed.

Full transcript

Matt Brown (00:09):

Hello and welcome to episode number 195 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 two at the very top of the food chain. It is Dustin Gouker; it’s Adam Candee. You can follow them on Twitter for free, and you should. Just smash the button for @DustinGouker, @AdamCandee, two E’s, no Y. And if you hate yourself, you can follow me @MattBrownM2.


We will talk about what went on in Minnesota, we’ll talk about some Fanatics stuff, maybe some little hacking of some accounts. But let’s kick things off here with what’s going on with a study coming out of the NCAA.

How many young people participate in some kind of gaming activity?

Dustin Gouker (00:48):

Yeah, so interesting we saw the NCAA move really recently to try to combat what’s going on around sports betting just in the recent weeks and saying, “We’re taking this seriously.” Obviously in the wake of, we’ve seen with Alabama baseball, the Iowa and Iowa State student athletes who have been caught up in something that we’re still learning more about. But the study is about college betting habits. Now, this is not student athletes specifically. This is that, which — I’m going to start with this. That’s the more interesting one that I want to see that’s coming apparently later in the fall, according to the NCAA. So this is just betting habits by all students. There’s a study done of some 3,000 students across the country. I got to say the top level, I guess I wasn’t real shocked.


It says that 67% of people on campuses 18 to 22 are betting on something. And this cast a very wide net. It says anything with fantasy sports is included with this. So, that obviously opens up a lot to DFS, traditional fantasy that’s played for money, all of that. But from the top level, I wasn’t surprised. I don’t know about you guys, but I was gambling in high school. I was playing poker with my buddies. I was certainly betting on sports once in a while. Certainly betting on sports at college as well. I guess maybe 67% even seems high to me. But I mean, for casting as wide a net as they said we are, it’s, I mean, I guess I can believe it. It still sounds a little high to me.


So, from that standpoint, yes, there’s a problem with betting on college campuses, but this is, again, and I’m talking about the 1990s when I was in school, and this is before really the internet was taking tons of bets and things like that, fantasy …


But all this is going on, and so we now have at least a snapshot of what’s going on. One of the more interesting pieces of data in this, though, that’s going to go underreported is that the number of people betting on college campuses that are between states where sports betting is legal and states where sports betting is not legal, basically the same. So if people start trotting out this NCAA study saying legal sports betting is a problem, got data right here that tells us, oh, people are betting and using whatever the NCAA’s direct definition of gambling here is. It doesn’t change whether sports betting has been legalized in that state or not, which we would expect because, 18 to 20, we’re not going to see people being able to bet because know your customer protocols aren’t going to let those people bet at legal and regulated sportsbooks.


What it does say is people are betting on fantasy sports. People 18 to 20 and certainly over that are going to be betting offshore. And that there’s certainly, I think, local bookmakers, I have one little good story. My wife and I got married about five years ago, the pastor there, I didn’t even know this, but he knew we were in the gambling industry. And he started off his talking about at the beginning of our sermon for our wedding, talk about, oh, I was the bookie for my high school, by the way, in LA. So none of this really surprised me. Yes, college kids like to bet there. There’s the top level. I guess what’s going to be interesting to see is what comes after that and what we learn about that. And again, I’m waiting for the student athlete study. That’ll be far more interesting to see what kind of penetration there is there, and the attitudes there.

Matt Brown (04:18):

Adam, first and foremost, thank you sir for stepping in today, playing hurt, flu game, everything like that. So I do appreciate you coming in here. The number to me, I guess it just depends on how the person wants to answer the question because the way that I interpreted the question, how it was asked, I would’ve thought, three and four, if you were basically just saying when you consider not only traditional betting or poker or whatever and all the different things that you can bet on, but I mean, nobody plays even the most casual of fantasy sports leagues. It’ll be a $10 prize pool, a $10 buy-in, Super Bowl squares, obviously March Madness brackets, all the different things like that. I mean, these are all forms of gambling. These are all things that even the most casual person has all participated in, some way, shape or form throughout the course of their life.


So seeing that number didn’t shock me in the least bit because we know how many people play fantasy sports. We know how many people participate in Super Bowl squares or March Madness office pools or campus pools or whatever it might be, things like that. So, wasn’t a complete shocker to me in the least.

Adam Candee (05:29):

I’ll give you two anecdotes that go along with that, and apologies in advance for a bit of scratchiness with the voice. But the first story actually goes back to a question Matt asked me a few months ago. He asked me, “Hey, how do you know this person that apparently we were both mutually connected with on social media?” And I said, “Oh, we went to high school together. I remember betting NBA sides with him when we were freshmen in world history class.” That’s the first time that I knew this guy that we both know now in our adulthood.


Secondly, when we talk about that definition of fantasy sports, well, I am in a no-money fantasy baseball league with a bunch of kids. And when I say kids, I mean as young as 14 because my buddy and his boys are enormous baseball fans, but they are also the single most straight-laced family you will ever meet in your lives. There is a 0% chance of any of them ever placing a real-money wager. And yet, under the parameters of the questions that were asked in this study, they would qualify as people who have engaged in the behaviors that could eventually lead to some sort of risky behavior. They’re at zero risk.


So I think that’s important to understand when we talk about the demographics of all of these things is that when you capture casual things like office pools, fantasy football leagues, all of that, then you’re certainly going to get bigger numbers than you would otherwise. That said, we don’t want to discount any of this. It’s obviously useful to have some level of research and understanding of what goes on at the college level. And I’ll say what I said at the beginning of the year, I still feel like this is the most likely place where we see some sort of additional regulation/legislation is how do we better protect kids on college campuses?

Matt Brown (07:23):

Yeah, I mean, Dustin, is it out of the realm of possibility 10 years from now, whatever, for there to be geofencing around, whatever. So we’ve seen these various things. I mean, hell, in Louisiana for daily fantasy sports and for sports betting, it’s legal in some parishes and not in other parishes there. They can geofence a tiny little parish within a state. I mean, would that be the craziest thing in the whole world? I don’t think it’s likely, but at the same time, I mean, again, depending on how everything goes, how the industry shapes itself, how everybody continues to preach responsible gambling and things like that. I mean, is it out of the realm of possibility? Could I imagine that there was a place in which there is a bubble around a college campus, whatever. I wouldn’t be shocked if in a decade we talked about something like that.

Dustin Gouker (08:15):

I mean, the technology is certainly possible that you could do what you just said. Now, a state coming out and saying, we’re legislating activities on your campus, on a private school, maybe at public schools, but private schools, maybe a little dicier. I mean, I could have dismissed the study as, “Oh, not shocking,” but, like Adam said, I don’t think — this is still a serious problem. There are still lots of people betting on campuses, and I think the study will open up to more casual people like, “Oh, this is going on on college campuses,” to, again, we’re capturing office pools and things like our campus pools. I got to imagine, just adding March Madness pools, even free to play at college campuses. Everybody’s doing that who has a D1 college basketball team, right?


I just go back to my history. All these things were going on. We know all these things were going on, and we all experienced it. But it’s still does underline, yeah, we’re saying two-thirds of people are captured by this study as partaking in a gambling behavior. Certainly some smaller amount of that is actually placing real money wagers, betting with a bookie, betting offshore, what have you. So it’s a serious problem that I think from that standpoint, the headline is, yes, let’s do something about this, and let’s not just dismiss this as noise. This is something that we should be taking into consideration. Also in this, it said that people were more likely to see advertisements, again, wide net bracket pool. If we’re saying bracket pools are there, or fantasy sports, we’re going to see DraftKings and FanDuel in every state, whether sports betting is there or not. So it’s casting a wide net, but that they’re more likely to see these advertisements in the general population. Again, something to take into consideration.

Matt Brown (09:57):

Yes. If you guys remember, we’re probably only what, four or five years removed from when Warren Buffett was going to give away a billion dollars for a perfect bracket, and basically every human being alive tried to fill out a bracket and win a billion dollars or whatever. I mean, was it higher than that, Adam?

Dustin Gouker (10:15):

No, it was a billion, right?

Adam Candee (10:25):

I was just giving a giant thumbs-up to the idea that anybody would be able to fill out a perfect bracket. So, good luck there.

Matt Brown (10:36):

But, I mean, for a billion dollars, I mean, click some buttons. I mean, whatever.

Dustin Gouker (10:42):

Never going to happen. Which is always funny when I see them and it’s way less than a billion. You can do a billion, you’re never going to give that money away.

Fanatics pulls a marketing offer

Matt Brown (10:49):

Yes. It could be infinite. All right, Adam, let’s go to Fanatics. Of course, some big news from them here lately. As we know, the acquisition of PointsBet by Fanatics. Also making an interesting play as well. It’s kind of tangent, and I think we’ve maybe even very rarely mentioned it here on the, but they’ve now acquired, not only they’ve acquired sports card company rights, as well. So they are really trying to encompass the full sports fan experience, right? I mean, they’ve got already the memorabilia stuff, and now they’ve got all the sports cards that are coming down the line. They are coming now in the sports betting world as well. So Fanatics looking really to try to be the complete round the 360 sports fan, any way you look, you can certainly spend money with Fanatics. But this is something to do with an ad they were running in Ohio.

Adam Candee (11:48):

Sort of, kind of, in terms of an ad. I’ll tell you that when I saw this collectible story and the idea of them encompassing everything reported by Darren Rovell. I thought he might spontaneously combust in that moment where all of his loves had come together in one place and I thought it might be just too much excitement and he might, from the inside, just spew matter out in all directions. But this, in particular, talks about that ecosystem, the story that we’re discussing, the whole idea of how Fanatics is going to market. And so we saw some screenshots making the rounds on social media of folks who were buying a hat for roughly $25, and there was a button below that said that they would then be eligible for $25 in essentially bonus bets if they were to buy a hat.


And people reacted to say, “Wait a second. What are we doing?” And the state of Ohio, the regulators who have been leading the way in a lot of ways, asked Fanatics to take that down. They did take that down. It brings up a broader question, though, because we joked about the idea of, “What? Is everybody who buys a hat going to get a free bet?” Well, I mean, guess what?

Matt Brown (13:02):

We literally said exactly this. I mean, we literally said exactly this. We did.

Adam Candee (13:08):

We said exactly this. And the question is going to become, how do you market this in a responsible way if this is your idea of how to take the database that you have of all of the people who have ever come and bought merchandise and convert them into sports bettors and create that bigger ecosystem that we’re talking about? Whether it’s collectibles, whether it’s sports betting, whatever the case it is. Now, I don’t think someone would get upset if you offered them a deal on a baseball card if they buy a baseball hat, but it’s a much different story when we’re talking about being able to market betting. So I’m not going to say I have the answer necessarily, but I will say that based on this first experience, it appears that a little trial and error here and really not a big deal, I don’t think, in the long run, because Fanatics responded pretty quickly to take it down and say, “OK, yep, all right, maybe that wasn’t it. We’ll try again,” and now we’ll see what the next iteration of this looks like.

Matt Brown (14:01):

I mean, Dustin, I wonder if this in reverse is OK. Obviously there’s reward programs for everything on the face of the planet, right? I mean, there’s bonuses and things for being a customer outside of just the gambling realm, right? I mean, if you’re loyal to Hilton, they’ll give you points that you can use for whatever, if you’re loyal to this, loyal to that. I mean, rewards programs and stuff. So, maybe it’s more in reverse where if you’re betting you can get points and that you could use to buy a basketball or a hat or again, down the line, they’re going to have the rights to the NFL and NBA from a sports card/trading card perspective, maybe all those different type things. So maybe it’s more just in reverse as opposed to the swag to betting, more some of the betting to swag type thing. But, and I actually don’t see a problem with that at all. I mean, what’s the difference in that and anything else that we would use reward and loyalty points on anyway?

Dustin Gouker (14:56):

I mean, this is actually, I don’t know what Adam’s heard, but this is what I’ve heard Fanatics is actually doing as well, is that there’s going to be some, a cash-back program where you can get hats and jerseys, get money toward your Fanatics balance to go buy whatever you want, which is, I think, pretty compelling, at least from a retention standpoint for sure, to say, “Hey, you place a bet, you get certain amount automatically credited to your Fanatics account, go buy a hat.” That, to me, I don’t know. I think that I’d kind of dig that, right? That’s an easy way to …

Matt Brown (15:25):

Honestly …

Dustin Gouker (15:25):

… say, “Oh, I want to …”

Matt Brown (15:28):

… the value to a super casual bettor. Do you want a bonus bet that you can’t touch? You can’t whatever. And it’s, to wrap your brain around. If you’re a serious gambler, maybe you would want the bonus bet or the whatever, or the odds, whatever it may be, the spiff of the day. But if you’re super, super casual and it’s, hey, but after you make your first 10 bets or something, you can go into the store and pick a shirt or pick a hat. I mean, for a super casual person, I think that’s a pretty compelling thing.

Dustin Gouker (15:59):

I agree. So back to the original, I agree, it’s not a huge deal, but it’s also, what are we doing here? Either any of us would’ve said, “Hey, Fanatics, don’t automatically put bets in people’s carts. That sounds like a bad idea.” Make them at least opt in to the betting promotions. I don’t know, in this realm where everything’s under a microscope. Again, they did react quickly, but there’s a lot of people working at Fanatics, and I’m like, I question, nobody said, “Hey, well pump the brakes. This may be a bad time for this.” But there’s a lot of that that goes around in sports betting right now. And again, to their credit, they at least did act pretty quickly to shut down what was at least an optics problem, if not a more serious problem.

Adam Candee (16:39):

Oh, so hold on a second. Quick point here, Matt. So Dustin wants merchandise for placing — I guess he wants to be part of the Overs Club.

Dustin Gouker (16:52):

Yes, please give me Barstool so I can be in the Overs Club. I like betting unders, though.

Adam Candee (17:01):

OK, well, I don’t know if we can do that. We’ll get you an engraved Gwerker jacket for the Overs Club.

Matt Brown (17:04):

But Adam, I do want to bring this up. ’Cause you and I are pretty savvy bettors and have been doing it for a long time and whatever, and I even look at it from my standpoint, right? Where once they have, I mean, they already have all the memorabilia stuff, which I think is interesting, right? I mean, you can look behind me. I have my whole work area is full of flags and posters, whatever, and all these different little collectibles and things like that, which I think is at least an interesting deal in the first place. Now you even open it more to a new market, too, with sports cards collectors, because once they have the rights to the NFL and the NBA, which they have now, and they’re going to be the exclusive provider of all of those cards, like, “Hey, blah, blah, blah, get a free pack or get a box or get a whatever or a discount on a box.”


I mean cards are expensive, by the way, these days. But all that, I mean, even me, if I was really into any of that stuff, or if I had my eye on a Joe Burrow autographed whatever, something like that, and it was the same price to make the bet at Fanatics as it would be at any of these other places. I mean, even me, I think, it probably would work on, right? I mean, if there’s no harm, no foul, and I’m getting rewards towards stuff like that. I mean, I do think it’s pretty interesting to see how this all plays out, let’s call it, three years from now.

Adam Candee (18:28):

What we’ve discussed repeatedly when it comes to can anyone challenge the top market leaders is how do you take away market share and/or how do you make it work for you if you only have, let’s say 7% to 10% of the market, right? Well, this to me is how you make it work. If you only have a small portion of the market where you do have a large enough ecosystem where sports betting becomes an amenity, where it’s not the entire product. So I think when you talk about Fanatics and that offering that maybe they are able to tap into a part of the market that has not been tapped into by the other operators.


Are they able to do that on a scale that makes them the number two or number one operator in the country? Obviously they’d like to think that way. I don’t think that that’s the realistic path for them. I think DraftKings and FanDuel had too big a head start in terms of gaining their customers and working to retain them. But does it mean that Fanatics couldn’t be a number three or gain a not-insignificant portion of the market? No, certainly. And I think the PointsBet acquisition goes a long way toward that.

New info about a DraftKings account hack

Matt Brown (19:36):

Dustin, you and I, this is nothing new to us. We have seen gaming sites get hacked left and right since they’ve started, basically for the last 20 years. There’s a story that comes out, of course, we’ve gotten much more sophisticated about how to prevent these types of attacks and certainly how to, even as a consumer and a customer, to protect yourself from these certain different little things. But listen, as we get more in tune with how to try to prevent the stuff, the hackers get better at hacking. And so we had an incident here with a report now from the FBI with something that happened over at DK.

Dustin Gouker (20:14):

So if you remember back to the fall, November of last year, it was going around, lots of people were getting money taken out of their accounts at DraftKings and attacks at other legal sportsbooks in the United States. We now have a complaint against an 18-year-old that was first reported by CNBC alleging that this person was behind, in concert with others, behind the attempt to steal. And again, $600,000 was stolen from accounts last year. The complaint filed by the FBI did not originally name DraftKings, but DraftKings did confirm that they were obviously the ones that were the users there were most affected. DraftKings, back when this happened, made everyone whole as well. But we have a lot more details here now about what happened and that they gained the information of a lot of customers and used that to make withdrawals on their accounts. Facing six federal crimes; crime doesn’t pay kids.


So you got pretty crazily, I mean, maybe not crazily, that we found out who this person was within six months and now going to apparently at least stand for those charges in federal court. So interesting to see what else happens, and maybe, maybe not a deterrent for this to happen, but everybody knows all the money that’s flowing through the sportsbook and online casino accounts and their target. So just another, and also another message to keep your account safe, to factor authentication, all of that stuff.

Matt Brown (21:41):

Adam, if there is any sort of positive for the gaming industry out of this or whatever, we learned about credential stuffing, which I don’t think most people knew much about before this happened, to understand why it is so incredibly important to have all of these safety features that are provided to all of us. And I’ll be the first to admit, I have done it more recently, but I mean some of my legacy accounts and things where they are like, “Hey, do you want to activate two factor?” I’m like, “Hey, why would I do that?” It made me really go in and go, “Oh, because if someone gets into one of these, they can start to try to figure out how to get into all of mine because of this whole credential stuffing thing and whatever.” So, I mean, if there is any sort of rainbow to this, it really does highlight why we should take advantage of every single barrier to entry that we are given in all of this.

Adam Candee (22:37):

I actually was surprised that it was only $600,000 that we were talking about with the amount of accounts that were accessed in this hack. And I know $600,000 is a large amount of money, and it represents a lot of entertainment dollars for the people who had their accounts hacked. But if I talk about this in a sense of scale, it could have been far worse. And that doesn’t mean that it wasn’t bad. It was very bad. But like you said, Matt, at the same time, if this ultimately is something that leads to greater change in the industry and/or greater awareness among customers of the best way to protect their accounts, then yes, there could be a silver lining to emerge.

Matt Brown (23:21):

And Adam, take us home here on Minnesota.

Why Minnesota sports betting legislation failed

Adam Candee (23:25):

Oh boy, up in the Twin Cities, not so good this year. It looked like this was one of the states that was likely to pass a sports betting bill. There was a broadly accepted deal that had been negotiated between the DFL Party, the Democrat-Farmer-Labor Party that was in control of both houses of the legislature and the governor’s office, with tribal interests who have gaming exclusivity in Minnesota with the support of pro sports teams. Sounds good, right? Sounds like everybody’s in line. We’re going to get a deal that gives tribes the greater bulk of the access here. And then, we saw things begin to fall apart a little bit. There were a couple of holdouts within the controlling party, in the DFL, and that meant that there needed to be negotiations with the Republican side to try to get a deal done. And there were some in the Republican caucus who were being lobbied by the horse racing tracks who said, “Hey, we’d like a piece, too.”


And there was a compromise deal proposed that would’ve directed, I believe, something in the range of 30% of revenue to the horse tracks, but it would’ve not have given them direct access to licenses. They didn’t like that. Tribes obviously felt like they had given quite a bit to be including others in the first place, and that turned out to be just about the end of it. Up in Minnesota, there was a stalemate. The bill can carry forward to next year, so you can certainly try again. But it’s an important reminder of what we’ve said on this podcast before, but I don’t know if it always sinks in with people of just how small of an issue can sink these bills, right?


When it turned out that there was going to be friction with getting sports betting done, because it’s low priority for a lot of legislators, well, this DFL Party that was in control wanted to be able to show victories to the voters that put them in place. So they moved on to more easily winnable issues that they were able to pass so they could go back and say, “Hey, we passed X, Y and Z bills for you this year because you put us in control of both houses of the legislature.”


They weren’t able to get that done with sports betting, and so it’ll have to wait another year.

Matt Brown (25:42):

Adam, go get you some vitamin C, my friend. Get some echinacea, get some all of the different little things, vitamin Ds and all the stuff that you can possibly do. Maybe get one of those IV drips and get better, my friend. Thanks for being here, despite the fact that you’re feeling a little bit under the weather.


Dustin, I think we’re fine. I don’t think we can catch anything through the riverside here. I think we’re good to go moving forward. As always, guys, everything we do, absolutely free, so please head over to legalsportsreport.com and take in all the words Adam and team are putting up on all these stories over there. For Adam, for Dustin, I’m Matt. Talk to you guys next week.

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