EPISODE 199 | LSR Podcast

PointsBet Becomes The Prettiest Girl At School | Sports Betting News


44 min
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PointsBet Becomes The Prettiest Girl At School | Sports Betting News | LSR Podcast 199

Just when it looked like Fanatics would buy PointsBet, DraftKings came in with a bigger offer. The crew talks about how the competition will play out, plus Ontario looking at sports betting ads, a Congresswoman looking for answers, Ohio looking for more money, and Bally’s looking for a total do-over.

Full transcript

Matt Brown (00:06):

Hello and welcome to episode number 199 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 of them in Dustin Gouker and Adam Candee. Boys, it is episode 199. That means the next one where we decide to get here on this very … I won’t even name the brand, they don’t sponsor. What do you say? … podcasting website to do this is going to be episode number 200. Now we are going to endeavor to get some guests on here and things like that. So, whether we’re at you next week or two weeks from now, depending on some scheduling and things like that, we will get back to you. But super, super excited about that.


Adam, look, I know we say it poking fun at ourselves or something. Honest to God, getting to 200 episodes, something that we just started as a, “Hey, look, I think maybe the industry would enjoy something like this,” just a quick wrapup of all of the news because it’s hard to keep up with things and now we’re 200 deep in this thing.

Adam Candee (01:10):

Three white guys record 200 podcast episodes, film at 11. But no, seriously, we’re having fun with this. We enjoy being able to distill the news of the week down to this 20 or 30 minutes and have a chance to catch up and hopefully put a little bit of context to everything that you’re reading in LegalSportsReport or seeing out there in that big world.

Matt Brown (01:32):

Dustin, listen, it’s a pretty interesting time now, which we will get to with the very first story that we get here, but the evolution of the podcast too is fairly interesting as we’ve gone from mainly focusing on, “Hey, is this going to happen and which states is it going to happen in?” To now getting to the point of, “OK, we’re jockeying for position. Who’s going to make it? Who’s not going to make it? Who is going to really crank it up, and who’s going to be pulling back?” We’ve seen the evolution here, and we’re still in the infancy stages for sure, but the arc even of the podcasts so far just through 200 episodes has been pretty interesting.

Dustin Gouker (02:08):

In five years, we’re just going to be giving stock advice, right? That’s what’s all in.

Matt Brown (02:10):

Yeah, I mean it’s just going to be like, “Hey, it’s up 17 cents this morning,” whatever. By the way, I still own that domain. We got off a podcast one day and I bought three domains. I’m not going to tell you what they are because we might actually turn them into websites one day. But guys, as we do every single week, if you have not already, please hit the pause button, go down, hit the five stars. We really do appreciate that, and leave us a little comment. You can follow Dustin and Adam over on the Twitter machine. It’s free. So, hit the button, @DustinGouker and @AdamCandee, to E’s, no Y. If you hate yourself, you can follow me, @MattBrownM2.


We will talk some Ontario, we will talk a little bit of Ohio, what’s going on with Bally, what’s going on with Caesars in Nevada. But instead of all of those as our lead story, it’s going to be PointsBet here, Adam. We thought maybe we knew exactly what was going on. It is not clear exactly what is going on now with PointsBet, but one thing we do know is PointsBet is going to belong to somebody else at some point.

PointsBet becomes the prettiest girl at school

Adam Candee (03:12):

PointsBet went from sitting in its room on Thursday night before the prom, wondering if anyone was going to ask them to the dance, to all of a sudden having too many answers to get to.

Matt Brown (03:25):

You know what they did? They took their glasses off and then they washed their hair and then they just shook their hair out and then now look at that. You know how that works.

Adam Candee (03:33):

Not another app movie. Yeah, that’s exactly what this is. PointsBet is now having to answer to two different suitors, and what we thought was a done deal when it came to PointsBet and Fanatics on a $150 million offer that Fanatics made to buy PointsBet’s US assets took a distinct turn when we hit the weekend as DraftKings came in with a $195 million offer that PointsBet’s board has evaluated and decided to engage with DraftKings, naturally as you would expect for an offer that goes up by that $45 million that they’re going to explore it. Now, that was a nonbinding offer from DraftKings.


So, what we’ve seen is that now PointsBet’s board is continuing to recommend to its shareholders that they go with the Fanatics offer until such time as DraftKings puts some meat on the bones and they get to a point where they see what that offer really looks like. Everything has to move quickly for this because the deadline is essentially June 30th. That’s when the shareholders are supposed to vote on the Fanatics offer. So, the deadline set by PointsBet to DraftKings is June 27th to get everything in one place and to get that offer fully evaluated. Now, Fanatics is of course firing back calling DraftKings essentially desperate and trying to get this narrative out there that it’s really a $500 million offer for PointsBet.


Let’s go ahead and just put a kibosh on that right now. It is not a $500 million offer, and the people trying to push that need to get off it, because if it were really a $500 million offer, you wouldn’t be calling it a $150 million offer. Don’t try to add in marketing spend and ad spend, things like that. That’s just silly. Everybody’s going to ultimately do that. So here we are essentially in this one-week period where we are not sure who ultimately is going to get their hands on PointsBet. Will it be DraftKings in essentially what is a blocking maneuver to keep Fanatics from being able to lower its market access costs for getting into certain places, or is it still going to ultimately be Fanatics trying to speed itself up in terms of what they anticipate to be a full-on launch in 2023?

Matt Brown (05:51):

Yeah, Dustin, I saw a lot of commentary here and even from people that I respect in the industry trying to figure out why DraftKings would do this, and it’s very obvious as to why we would be getting Fanatics trying to do this, right? I mean they come in, the tech that they are using currently is inferior to most things that are out there, and they are able to not only get the tech that puts them on par with the market leaders currently, but also the market access that Adam just spoke of. But on the DraftKings side of things, I mean outside of just the blocking of a potential competitor, which obviously is still a strategic play here, it does bring in-house some of the stuff that they’re having to farm out right now.


So, it’s not just one of these things where people are just going, “It doesn’t make any sense, just for a block and just a blocking play,” but there is some technology that PointsBet has that they could bring in-house that they are currently having to farm out. So it is an acquisition of some of the tech as well, which I think people are … I don’t know if they’re just glossing over it on purpose or if it’s just cool to always point fingers and say people are stupid or whatever, but it’s not just … Yes, that is part of it for sure. You don’t want somebody with Fanatics with the pockets that they have to be able to just jump right in into all of these states and stuff, but there is some acquisition stuff here, as well.

Dustin Gouker (07:07):

Yeah, I mean it still makes far more sense where I sit for Fanatics to buy them-

Matt Brown (07:11):


Dustin Gouker (07:11):

… than DraftKings, but yes, this is not just screw you, Fanatics. We want to take your lunch and make it hard for you. There’s definitely other reasons, and one of those is this improves DraftKings’ technology right away, allows it to work on product in a way it probably couldn’t have before. It does make the question, this company that PointsBet acquired back in 2021 for $40 some million. Obviously, it’s not worth $195 million on its own, but it’s definitely, definitely valuable. The other thing I’ve had pointed out to me is this has been really couched as a sports betting play, but PointsBet holds online casino licenses in a lot of states. DraftKings could deploy another skin, just work on Golden Nugget under the points.


There’s other things here that at least make maybe more than marginal revenue if it makes sense. I mean the value of those licenses themselves. Again, even though from the Fanatics side, I think the calculus has not always been on sports. It has been more on sports than it has on casino on the other side of it, because sports is the sexy thing to talk about. But casino sits out there, and it can definitely make sense for DraftKings. It seems like the most likely outcome is that Fanatics bumps its offer up a little bit, says, “Don’t worry about this nonbinding DraftKings offer in the next few days,” or they just run out of time, because yeah, like Adam said, we’re running on a short timeframe.


We know, yes, shareholders would like to get that extra $45 million, but they’re bleeding money right now we know, from all accounts, so this has to get done. They have a binding offer in front of them. Are they going to toss that unless DraftKings gives them a binding offer the next week? I don’t think they will unless they get that binding offer. So it’s definitely interesting. We haven’t had a whole lot of drama on the M&A side in a while. It’s fascinating to see DraftKings jump in here and create some chaos in the space.

Matt Brown (09:07):

Adam, when we look at this as well, and again, just getting back to the product side of things, whether it’s Fanatics, whether it’s DraftKings or whatever, one of the things that we talked about and why we were excited about PointsBet in the first place when they came in was they did have a different offering from a sports betting side of things. Now I think what we have here for whoever ends up getting PointsBet is, yeah, you’re not going to be pushing points betting right off the gate. It’s why we’ve switched more to the narrative of same-game parlays, those stuff.


They’re easy to understand. It’s very easy for the new casual better to understand all the stuff, where points betting does take a learning curve and whatever, but as we talk about a little bit further down the line where you’re going to have to have innovation to retain customers, you’re always going to be looking to come out with new things, whatever it might be. So a DraftKings, a Fanatics, whoever it might be, can keep Points Betting in their back pocket and then play that trump card a couple of years down the line as we have a more mature market, as the education process can be a little bit greater towards what Points Betting actually is. You do have something that is unique in the market in the United States, at least as we sit right now.

Adam Candee (10:18):

Because I’m pretty sure you called me an idiot five minutes ago for only talking about the blocking play, I’m going to push back on the product side of things here and say yes, you can certainly put Points Betting not only in your back pocket, I think probably up in the back bedroom closet on the very highest shelf only to be brought down 10 years from now, because the risk involved in Points Betting is almost 180 degrees from what the market has shown that it wants right now. It wants to risk a little to win a lot. It doesn’t want to risk a little or even a lot and potentially have the chance to lose a lot as well. Now, it could work for a very specific type of customer, that’s for sure, but did PointsBet ultimately have the customers to make that product work? I think that’s a reasonable question.


I think also you can look at this and say the in-play product is certainly something that PointsBet was trying to perfect, and that could be something that would be beneficial to DraftKings, to Fanatics, to anyone else. But I think if we take this writ large and say, “OK, let’s talk about PointsBet from a product perspective,” yeah, it makes sense for Fanatics because we really even haven’t even seen a product as yet. They bought source code from Amelco – according to Matt King, they essentially made that unrecognizable through their own engineers, but we really haven’t seen much in terms of the way of product from them. From the DraftKings side, we consistently hear good things about the product for DraftKings.


So really the juice might not be worth the squeeze from an integration perspective considering DraftKings just went through this integration when it came to SBTech. So there are reasons there when it comes to product. I think those reasons are secondary for DraftKings in the long run because I think keeping Fanatics out of the online casino space is the biggest reason for all of this in the end. I’m not going to say that they’re not going to get into that space, because Matt King said, “Look, we had market access in a lot of ways already. It’s about lowering our costs for that. It’s about not going through the licensure process again. It’s about not having to spend another $10 or $20 million in certain places to be able to get ourselves in place.” So in the long run, it makes way more sense I think for Fanatics, but if DraftKings for what is a relative pittance compared to the idea of a $2 billion purchase by Penn of theScore, LOL. Yeah, it does make sense that way.

Matt Brown (12:45):

Dustin, finally, you take a look and we’ve already seen from Fanatics, right? I mean it does seem like everything that they preach is true about in it for the long game and whatnot. I mean they didn’t rush to market or anything where they could have done all of that. So, whether this deal goes their way or not, I do expect they will invest super heavily in product. All this does is just fast-forward things, right? We’ve seen from them so far, it’s like, “Oh, we’re not going to rush and rush and rush and rush. We would rather do things better.” So I imagine we’ll get to a point in which we’re looking at Fanatics.


Yeah, they’ll probably have one of the better product, better apps, better offerings, et cetera in the market. It just helps from the PointsBet side of things because that just speeds things up by potentially maybe even years.

Dustin Gouker (13:34):

Yeah, absolutely. Fanatics will get to market faster with PointsBet, have a better product, all of that if it’s in the window, but it will over the course of years or even less than that be a good product with or without PointsBet. I think in the calculus of this, we talk a lot, “Oh, who can disrupt the US sports betting market and online casino market right now?” The list is small. I’ve basically got it down to Fanatics and 365. That’s what we talk about. I don’t think anybody else who’s currently on the radar is going to disrupt. So is there value in slowing down Fanatics even in the nine-figure range? Probably for DraftKings.


If they see Fanatics as a viable disruptor that is going to come in and take market share from them and FanDuel or anyone else, I think yeah, there’s some value in that. Again, is it $195 million of value? If you add all this stuff up and the tech and casino licenses and all that, maybe. It’s enough, but I totally agree that Fanatics is getting there one way or the other. This just makes it faster.

Ontario looking at sports betting ads

Matt Brown (14:39):

All right. Dustin, let’s talk about Ontario. We have been pretty vocal about thinking that Ontario may be disappointed from what we thought and what we were expecting to see coming from up there. Now in a market that wasn’t as robust as we thought from a numbers perspective, maybe the acquisition of customers and/or the retention of customers could be getting a little tougher.

Dustin Gouker (15:04):

Yeah. We have a lot of chatter from Ontario’s provincial parliament saying they think there’s too much advertising in the market. Got Lisa Gretzky, who’s a member of parliament there, saying, “We’re seeing an explosion of advertising. They live in a border town. We see a lot of sports games and it’s upwards of 15% of advertising.” In Toronto, you can barely walk a block without seeing an ad, BetMGM, BET99. The list goes on, subway stations on the subway, on the radio. This is really not that much different of the experience we’ve seen in the US with states that have legalized it. We have seen a lot of this advertising is in your face. There’s a lot of it. It’s even on national broadcasts at this point, as well.


I could agree that you’re probably seeing aggressive amounts of advertising in Ontario without being there, and I was there last year. There is a lot of atmospheric pretty much everywhere you go in Toronto even at that point. So, it’ll be interesting to see what they do. They’ve also made it hard to advertise online. We know being able to advertise bonuses and promotions and things like that, it’s very hard in Ontario, and that’s made it hard for the non-legacy, non-gray market operators who have come in and tried to get market share right away.


They’re resorting to this because this is their avenue to get in front of eyeballs to try to compete with people who are just importing their databases from the gray market to the regulated market. So, is this the right idea? I don’t know. I mean, I think a lot of people could agree there’s sometimes just too much sports betting advertising. Without knowing exactly what it is in Ontario, there is a feeling that there’s too much of it in a lot of places, and Ontario is one of those places.

Matt Brown (16:44):

Adam, it’s one of those things where we anticipated this at some point. There was going to be calls for a complete ban. We have always said, “Hey, look, why don’t these books try to self-regulate, don’t pump out stuff like we saw in the crazy DFS days and things like that?” I think for the most part, I think that they’ve done a decent job with all of that, but I do think there’s … Listen, football season is around the corner; we shall see.


I mean there’s probably going to be a crank up in ad spend as we head into the NFL season this year. It bleeds into our next topic as well, which is like we’re talking about ads and we’re also just talking about betting rules in general. We always knew that there was going to be little tweaks along the way as we continue to grow this industry and figure things out along the way. So now we have some asking just for some clarity on the rules aspect.

Adam Candee (17:33):

We do. To put a bow on the Ontario situation, first of all, I’m going to answer your obvious question before you start Googling. No, Lisa Gretzky is not related to that Gretzky. Ontario has been a weird market in a lot of ways, and I think everything with Ontario ultimately goes back to they decided to try to bring the gray market in and give them a pathway to becoming legal and regulated sports operators. What that ultimately did was you made the market that you’re fighting for way smaller than it is in the United States, because there are places, 365 namely, where they’ve been there and all they’re essentially doing is saying, “Oh, yeah, well, stay with us.”


How much easier would’ve been for anyone in the US? Obviously, that’s what DraftKings and FanDuel have employed with DFS over to sports betting, but yeah, it would’ve been that much easier in the US if that were the case. I think if you’re in the market in Ontario, if you’re a US-based operator who’s been trying to play up there, I think the biggest thing you look at with this is saying I’m not even that worried about what they do to regulate sports betting ads, but I am worried that they’re talking about regulating iGaming ads as well, because it would seem to me that the only play for US operators in the Canadian market is a long play for iGaming. Ultimately, it doesn’t make any sense to try to compete on the sports betting front.


You’ve heard that from Jason Robins already from DraftKings to talk about how difficult the market is with the rules that Dustin mentioned, with the potential for an ad ban. So, if the federal government is getting involved, then you hope it probably gets negotiated to something more reasonable than a full ban, because that would seem to be a restriction on speech and a restriction on trade that might not measure up because they’re comparing it to tobacco.

Congresswoman looking for answers


We could go a long way if we’re going to talk about vices with sports betting versus tobacco. In the US as you mentioned, Congresswoman Dina Titus of Nevada, who’s one of the chair people of the Congressional Gaming Caucus, sent a letter to a number of sports leagues essentially saying, “Hey, in the wake of everything we’ve seen with the NFL suspensions for gambling on legal sports betting apps, give us some clarity on what the rules are here. Make it obvious to us what the policy is.”


To me, it’s Congresswoman Titus essentially saying, “Hey, help me help you help yourselves because let’s get a little bit out there here on what is being done to regulate so that others who want to regulate you are not jumping in to do it for you. Let’s make it clear that you’re doing a lot of this on your own in the first place,” or it might be a way to say, “Hey, get your house in order. If you haven’t really made clear what your rules are yet and you’re not completely sure, then do us a favor and get the policies down on paper and send it into us so we can show everybody, hey, things are being done here.” Dina Titus is not new to gaming. She has been in Nevada for decades. She understands how heavily regulated the industry is, and it seems to me that this is more a helping hand than it is a crackdown.

Matt Brown (20:41):

Yeah, Dustin, we take a look at that. It’s something we’ve mentioned here a couple different times on the pod. Don’t want to rehash too much here, but basically, as these suspensions come out and these investigations come out and all of that, I mean you do hear some of these guys going, “I didn’t really even know that that was a problem.” We’ve heard that a couple of different times now.


So, if they don’t know and we don’t know and maybe even the NFL office doesn’t necessarily know, it only makes the most sense in the world to have a full on here, spell it out, A-B-C-D-E, this is what happens, this is the punishment, this is what happens, this is the punishment, et cetera. So let everyone know there’s no questions around any of this stuff and you don’t have guys like us sitting here screaming into a microphone saying that the penalty is too harsh or you’re making it up as you go because at least it’s on paper and everyone knows what is expected of it.

Dustin Gouker (21:31):

Yeah, I mean Titus is 100% what Adam said is trying to cut them off at the pass as they say, right? Let’s not have the inverse of this. Let’s not have the bad version of people. Here, what are you doing? What are you doing to be proactive? The NFL to its credit, at least, this week just put out everything, what it’s doing. Here are the exact rules and be very clear about that. I think we need to have more transparency eventually on what the player suspensions are about, but they’ve outlined very clearly to the public here, this is what our policy is, and it just can’t hurt for everybody to do that.


What exactly are we doing? What are the rules? Let’s be very clear about this and not have the bad headlines or the famous cardboard poster held up by a congressman that Adam and I like to refer to with something bad on it. Let’s get ahead of this, and she is trying to help that. It’s quite clear.

Ohio looking for more money

Matt Brown (22:27):

Dustin, Ohio is a market we were very excited about whenever it went live. It has not been live for all that long, and we already have some people looking to change stuff there.

Dustin Gouker (22:39):

We have Ohio looking to up the tax rate from the 10% tax rate on sports betting revenue passed in 2021, raise it up to 20%. We have language moving through the legislature there. It’s hard to argue with this that 10% is a pretty industry-friendly number; 20% is more in line. It obviously makes it a little harder to make money, but it’s something certainly that the companies can bear when they volunteered for 51% in New York. It’s hard to argue that they can’t function with 20% across the board. So we’ll see if this gets to the finish line, but the Ohio Senate passed that higher sports betting rate, and we’ll see if it finally gets there and the sports books are paying a little more on tax in Ohio in the long term.

Matt Brown (23:35):

Yeah. Adam, I don’t know if we will get to a point where states are trying to keep in line with one another. We know we’ve seen vastly different laws. We’ve seen vastly different policies from state to state, but I do think as we move along and we progress, there might be a bucket that everyone ends up sitting in between here and here and what makes sense for the state a little bit more or whatever. But I think you don’t want to be on the low end. You don’t want to be on the super high end, but can we find a happy medium where it’s great for the state? The books can still make money. Everyone can be joyous together with all this.

Adam Candee (24:13):

Yes, joyous together as we are on this podcast. Exactly what we all seek is joyous together. The reason that I put this story on the rundown is exactly what you just said, Matt. The idea here is that New York has its 51%, Pennsylvania has its effective 36%, and then you go to Nevada with six and three quarters or Ohio with 10%. I think what you’re seeing is that we’ve seen movement in both sides to try to come to more of a middle once we see what the industry actually produces. To be clear, this passed through the Senate.


It was rejected in the House, and so this will go to a conference committee to figure out whether it goes anywhere. It was a budget mechanism. After earlier, it didn’t gain traction to be able to move this forward. So we’ll watch what’s going on in Ohio. We’ve already seen that certain states that we’re allowing promo deductions are no longer allowing promo deductions and it’s just the next phase of legislative and regulatory activity that we’ll be covering at LegalSportsReport.

Matt Brown (25:17):

Adam, as I talked to you about at the very beginning of the podcast, as we head into episode number 200, we’ve seen the arc of the sports betting industry in which we were trying to figure out which states were even going to go legal in the first place, who was going to be a player, who was not going to be a player, what were going to be the M&A targets, what was going to happen with marketing space, et cetera. So, we have seen a full arc in not even 200 episodes and a lot fewer episodes than that. We’ve seen the full arc of a company as well.

Bally’s looking for a total do-over

Adam Candee (25:45):

So customers of Bally Bet yesterday received an email that said it came from Bally Bet. I think it came from Beyonce in which it said to the left, to the left, everything you own in an app to the left and go ahead and get it on out of here. Customers were told that Bally Bet is shutting down for a period of time, and that in order to facilitate that, they are basically shutting down every account. All money needs to either be withdrawn or will be sent to an address on file via check by June 30th if you don’t go and pull the money out. I will say anecdotally, from those I’ve talked to, not particularly simple to get your money out right now. So, there might end up being a lot of checks sent by Bally. It does not apply if you live in Arizona.


We have not gotten clarity as to why that is the case, but we know that Bally Bet is going to be essentially going for a 3.0 version of its app there, going to Kambi after previously buying Bet.Works and bringing that in-house, buying Monkey Knife Fight. They shut down Monkey Knife Fight. The Bet.Works platform didn’t work for them, and now they’re going onto a third-party provider with Kambi. What we knew was that there was going to be a period of transition. What we surely did not know is that that means for Bally shutting the entire thing down.


Essentially when they come back by the end of 2023, although there will be some markets that they’re trying to launch in before NFL season, everyone’s going to have to sign up again. I was talking with the LSR team earlier, and I’m not sure you could come up with a bigger story of overall failure than what has happened with Bally Bet, at least relative to what you would’ve thought the expectations of success were for a legacy casino company coming into the space.

Matt Brown (27:41):

Yeah, Dustin, it’s very interesting, right? Because I don’t think we were necessarily jumping up and down about Bally’s in the industry, but they were at least intriguing, right? They were showing they were going to spend money. I mean, again, it’s not Johnny-come-lately. It is a company that’s been around for a long time, et cetera. So, we were like, “Huh, I mean maybe we’re not necessarily thinking they’re going to come in and be a major player,” but I don’t know, maybe.


There’s at least some potential there, and I know people probably think that we come on here and it’s just like problem after problem after problem that we talk about. Listen, we talk about the success stories as well, but we have not had a lot of success to talk about when it has come to Bally’s here on the podcast, unfortunately.

Dustin Gouker (28:26):

Yeah, I mean they spent a lot of money to try to compete in the space. I mean basically shutting it down and starting from scratch, that’s what they’re doing, it seems like. Everything that Adam just described is just a horrible UX. Shut your account down, migrate them. I mean, how many accounts are we really migrating? It’s like Bally Bet is a rounding error in the iGaming and online sports betting space right now. So, it’s certainly some. You did all of this, and you’re basically starting over. Again, that’s almost what they had to do though if they’re going to compete long term. Let’s have something sustainable that we can build on.


Everything that’s happened so far has obviously not worked to any great effect. So, using Kambi, getting everybody on a new platform and then starting over, that’s what it is, but they have burned through a lot of cash and failing and integrating the acquisitions that they had over the years. It’s been a rough go for sure, but we’ll see if version 2.0 of Bally Bet is going to be any more successful than 1.0, but it’s pretty clear that 1.0 was not going to work out.

Matt Brown (29:39):

Yeah, Adam, look, we’re not in the room. We are not accountants. We don’t know. I guess it’s an interesting strategy just from the point of that they still think it’s worth coming back in at all, right? I mean, it’s interesting when you see where you sit in the market and you see where the industry leaders are. It does not look like there’s any show of slowing down with those guys. Of course, if anything, you have two behemoths that could be really coming in the Fanatics and Bet365 side of things. So the fact that there is at least a plan to continue on to me was at least, what should I say, curious. I’ll just call it curious. I’ll call it curious.

Adam Candee (30:19):

It is curious. There’s no question. Great word for it. Dustin summed it up well there that the experience for a customer is so poor here that you almost wonder if they’re saying, “Yeah, our customers weren’t any good in the first place.” We talked about with some of these companies that have shut down versus being purchased that everyone is looking at them and saying, “Yeah, your customers were not profitable.” Not that your customers were the super sharp customers that you’re making money off. They just weren’t gambling with you. They weren’t spending any money. So maybe that’s the case here for Bally’s.


They’re like, “Yeah, whoever we had wasn’t that great in the first place, and so we’re just going to go ahead and hit the restart button. We’re going to tank for Wemby and hope that we come into something great when Kambi comes around.” So that’s the play for them. Sports betting as a gateway, again, as we’re talking about a lot on this podcast to iGaming, because you have a legacy gaming brand that you can probably sign up some of your customers for. Maybe the cross-sell ends up working a little bit heavier the other direction. Maybe Bally’s has a plan that they want to be able to sell more casino customers into sports. I couldn’t tell you, but you know what? Let me tell you that I don’t think they can either.

Matt Brown (31:31):

Dustin, let’s close things out here with a little bit more of a personal topic for me. I wanted a late addition to the rundown here, and that is, look, it is something that I’ve joked about for a very long time and to see at least a company stepping up to the plate is interesting. Caesars in Nevada was the first company to finally take the plunge. They launched their rest-of-country app here. When I say that, you’re going, “I don’t even really get it,” because people who don’t understand what it is like to have bet in Nevada since the apps were available, you don’t even get it. What you have out there is so amazing, and we did not have any of that stuff.


Caesars decided to go ahead and launch and take that next step here. It was, look, it is at least a refreshing look that a company that again, didn’t necessarily have a big reason to do it, because everything’s just been working as it is, decided to go ahead and take the step forward here. What that did, guys, if you’re wondering, there was not a robust market of, let’s just call it, prop bets that were available here on a regular basis. There was no such thing as same-game parlays. There were no boosted bets. There were no real reward programs, any of that stuff, all of which is integrated into the new Caesars app.


Now you take the good with the bad. I sent a screenshot to you guys. Look, some of the markets are … Let’s circle back to that word, Adam … curious. So some of the splits are curious in all of this, so you take the good with the bad. But it is interesting that Caesars did decide to go ahead and take the plunge here, and it does make me wonder is MGM next. What does this do now for a Nevada market that is stale and stagnant for eternity essentially?

Dustin Gouker (33:19):

Yeah, we talk about this a lot, because you’ve lived there. Adam lived there for a long time. What is the future of Nevada? This is at least an example of, yeah, we’re going to get the rest-of-world app into Nevada. I haven’t been to Vegas in a hot minute, but the apps have always blown. They’re all extremely rough experiences that none of them are very good for gambling, especially vis-a-vis what you get in the rest of the country right now. To see that, it’s at least interesting. I know Nevada doesn’t want to be on the sidelines of all of this. There’s increasingly talk of Nevada’s just been left in the dark ages. They’re not adapting to online gambling.


At least seeing that come into Nevada, bad lines or not, that is interesting as we vision what the next iteration of what Nevada online gambling is. Does that mean there’s going to be great apps everywhere? Are they going to change things to make it easier for innovation? Are they going to get into online casino? All of those are maybe long ways off, but it is an example of … People just don’t realize it, but again, in the bubble, we realize that yeah, the Nevada online sports betting experience is pretty rough. To see at least get a better app with better options, you can get into the lines talk, but at least that part of it is a good step forward for Nevada and seeing Caesars do this.

Matt Brown (34:43):

Adam, I mean obviously, the other company that is looming out there that could do this would be MGM. They do have a rest-of-country app as well that is not available in Nevada. They do have a rewards program that is available rest of country that’s not available in Nevada. You do have the partnership over at Virgin Casino with Betfred, who is able to operate currently and over the counter but not actually have the app live in Nevada. So maybe that could be coming as well. So, in theory, we could be looking at some point in the football season with three rest-of-country apps, which would be pretty massive I think for this market.


Because while the gigantic bettors are always going to flock to some of the old school books that will take the really big action, I do wonder if some of the casual stuff where we see … I mean William Hill just still crushes as far as numbers come in Nevada, and there’s nothing special about that app at all. It’s a bunch of casual guys as well. So I do wonder if maybe Caesars with the new app, if BetMGM decided to go that direction, if they finally approve Betfred, do they start to siphon off some of the casual bettors who again, as we know very well, don’t really care about a lot of the … They want to bet the same-game parlays. They want this huge menu of options and all the different things to be able to bet on.

Adam Candee (36:03):

Sit back you two and let Grandpappy from Nevada give you a little bit of history here as we explain.

Matt Brown (36:10):

Come on, Papa. Come on, Papa.

Adam Candee (36:13):

Let me tell you a little bit more about what’s going on here. First of all, as an aside, one of the mind-blowing moments for me in 2023 was learning that there is a Fred behind Betfred and seeing that Fred on camera at Super Bowl time. Oh, my God. That thing blew.

Matt Brown (36:33):

Hey, Fred, what’d you go name your company?

Adam Candee (36:35):

I don’t know. Fredbet? No, it’s a little weird. Betfred? Got it, nailed it. Once again, Fred, you’ve done it again. So, let’s go back here to the beginning of the Caesars transition. We have to talk about the Caesars purchase of William Hill, and we have to talk about – we can’t say everything was working well. The impetus for all of this was that they had a massive crash during the Super Bowl, right? William Hill was down for days. Caesars was down on Super Bowl Sunday in Nevada. That’s the reason that we’re getting this. So I think hope needs to be tempered, because Caesars had a direct reason working on the old tech from William Hill that they had to get this fixed before the next football season.


They could not risk another situation where they’re down for, say, the beginning of the NFL season for week one. So, they had the reason to do that. Now when it comes to MGM, will they feel the same push to do that? I don’t necessarily think they will unless Caesars begins to see a lot more adoption for having put the rest-of-country app in there, and then MGM will probably look and say, “All right, well, we didn’t necessarily want to do it, but there’s enough market pressure for us to do this.” Beyond that, though, why would you make a big push in Nevada to have a sports betting app when you’re not going to have iGaming anytime soon?


That’s the history lesson here that unraveling Uncle Shelly’s handiwork is going to take a very, very long time if ever in Nevada. Sheldon Adelson, the late owner of the Las Vegas Sands Company, Venetian, Palazzo and so on, was adamantly — as most listeners to this podcast know — against online gaming. So Nevada’s laws have been centered around that for a very long time. Most companies have built their products with the understanding that there wasn’t going to be online gaming and that there was probably going to be this minimal online sports betting product. So the political winds need to shift for that to happen.


I don’t know if those wins are ever going to shift so long as Station Casinos is the presence that it is because we know that Station Casinos is the reason that the in-person registration requirement is still in place in Nevada, which is what stifles the market, which is what keeps DraftKings and FanDuel out. I don’t think they’re going to be any more excited about online gaming, which would keep people out of their casinos, than they are about modernized online sports betting.


So, Matt, I wish you the absolute best when it comes to that Caesars Sportsbook app and you being able to finally see something that looks like the PlayStation that the rest of the country has versus the Atari that Nevada has been on for all of this time. I wish you even more that you are not dealing with Intralot-level splits on markets that you get in that Caesars Sportsbook app.

Matt Brown (39:33):

Yeah, it’ll be interesting. I don’t know if MGM will do it, either. The thing is that’s the only app Betfred has, right? When they finally get approved, that’s all they’ve got. So there’ll at least be two in the market at some point. Dustin, I think one of the other interesting things here and then we’ll get out of here is just also for the first time, there’s a very clear spelled-out reward program associated with sports betting. Now, listen, if you were a big bettor, you were getting these mythical points. You were accruing stuff and maybe your account was getting boosted and all that, but it was never really spelled out as to how you were going to move up the tier and what you get for each bet.


They did do this with the Caesars app now. Just anecdotally, I talked to a couple of my very casual bettor friends who the fact that they get points and can get free parking and go to one of the nice restaurants and cash in to do these different little things. I asked, I was like, “Would that make you switch to this app even if it cost you an extra 2 cents? Let’s say it’s not $1.10, it’s $1.12. Say they have numbers like that.” The 2 cents to them meant absolutely nothing. What meant everything was the fact that they would be able to get to the gold tier where they’re going to park for free or get to a point where a $25 gift card to go to the buffet or whatever is sent to them.


So it is at least somewhat interesting to me from that aspect and how well they market that heading into the football season. They did advertise fairly well that they were switching over and migrating to this app. I got several emails along the way. The communication was good with that. So will the very clear spelled out, “Hey, when you make a bet, you get this many reward points and you can go into the app and track your progress and watch your status climb and stuff,” will that matter to the casual bettor? We’ll find that out, I guess.

Dustin Gouker (41:18):

I mean this has been a long game for legacy casino companies. I think in the US with online sports betting/casino for a while, it’s been MGM, Caesars, Penn, Boyd, whoever, engage with those customers in a different way. If you have this synergy between an online app and you can get them to a property or have them engaging with your brand in some way, that’s valuable. New Jersey again, the longest example of a decade of online casino before sports betting was even a glimmer in anyone’s eye, we’ve seen this engagement with people. You get to engage with customers. You wouldn’t get to engage with lapsed customers. You get them into the casino possibly where you really didn’t have a touch point with them other than some email marketing if you had their email.


Now they’re playing on your online casino. Now they’re playing your online sportsbook. So there’s definitely value into that. Again, is that going to be the path of Nevada? Again, I’m with Adam, it’s going to take forever for anybody to really realize that in a meaningful way, but we do have MGM and Caesars sitting there who obviously have figured this out and have some value on it. Can they push back on the legacy other casino companies that don’t really buy into this? That’s probably over decades, we’re going to see this in Nevada.


I don’t think in forever, we’re going to see this, but I think at some point it becomes so prevalent that we will see it in Nevada. Is that 10 years, 20 years, 50 years from now? God only knows. We’ll probably all be dead, but you have hope if you’re a young ’un.

Matt Brown (42:42):

Guys, as we talk about, everything on the podcast here over at legalsportsreport.com. So, please go in, take in all of the words that Adam and team are putting on the website over there. They’re putting in a ton of hard work and explain it a little bit more in depth than we do here on the podcast. As always, we do appreciate every single subscribe, rate and review to help us climb up the chart. So, do thank you there. If you’re watching over on YouTube, thanks, please hit that subscribe button down below as well. Episode number 200 coming soon.


We will advertise that as well. We will let you know when we are going to go live and who actually we are going to be talking to as well for that. So please pay attention to us over on the Twitter as well as the LegalSportsReport Twitter over there too. For Adam, for Dustin, I’m Matt. Talk to you guys soon.

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