The Latest For Florida Sports Betting | Sports Betting News | LSR Podcast 205
We had the latest update in the federal court case involving sports betting in Florida; are we any closer to actual bets being taken? We also look at Fanatics’ plans for the start of NFL season, some fascinating data about sports betting commercials so far in 2023, and the latest on the Kentucky launch.
Full transcript
Matt Brown (00:07):
Hello and welcome to episode number 205 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 but one of those, and it is Dustin Gouker. You can follow him over on the Twitter machine for absolutely free @DustinGouker. And if you hate yourself, you can follow me @MattBrownM2. We’ll talk some Kentucky. We’ll talk a little bit of sports betting ad stuff, but let’s kick things off here over in Florida, Dustin.
Sports betting in Florida; are we any closer to actual bets being taken?
Dustin Gouker (00:34):
Yeah, this is the big story we’re obviously following right now is will they or won’t they launch sports betting again in Florida? We have just a small movement toward what’s next in there. Basically, we had to have the defendants in this case, the US Department of the Interior, which is trying, which is defending the compact that was done that would allow for sports betting, including online sports betting via the Seminole Tribe, to go forward. They had a deadline to meet in this federal court case, to reply to a request for another appeal en banc, which is not very important, but this is the highest level before you get to the Supreme Court. They basically said, “Buzz off, this is unwarranted. We should not even have to do this.”
(01:20):
They obviously went through their legal argument yet again. They won the case at the last step. Now, this is an appeal that has to happen if the plaintiffs wanted to continue going forward with the case. There’s also the possibility of a Supreme Court appeal at one point after all of this, but right now, we’re now in a waiting game yet again, we have … The court asked for the Department of Interior to say what it thought. Now the court says, “Do we hear this appeal with this larger number of justices, number of judges, looking at the case?” This is actually what happened in the PASPA case back in 2017. We actually got this larger appeal before the Supreme Court step, so we’re waiting.
(02:07):
Right now, we don’t think they’re going to launch while this is still hanging out there over their heads. We’re obviously just less than a week now from the start of the NFL season and it looks … We don’t think there’s going to be any kind of movement on this, and we don’t think until this happens, until this is clear and maybe onto a Supreme Court appeal, that we’re not going to see anything happen in Florida. So it’s a lot more hurry up and wait for all of that. But right now, yeah, it’s still limbo if you’re looking to bet on sports at a legal sportsbook in Florida.
Matt Brown (02:40):
Dustin, for the people that were around whenever the switch was flipped on for a hot minute there and flipped right back off, if this were to come about, same looking type deal, not very many options and all of that, is that what we’d be looking at?
Dustin Gouker (02:53):
Yeah, we’re probably looking at Hard Rock, which works with the Seminole Tribe to all launch its online sportsbook. That would be likely all you have. That is the only app that was launched for the amount of time that it was live before this whole court case came to fruition. There are mechanisms where the Seminole Tribe and Hard Rock could work with other operators to let them in. They give them some revenue share or pay them X to get access to Florida. Is that likely? I don’t know. I think when this all started, it was probably likely. I’m not sure how likely it is right now, but there is at least a chance that you could have more than just Hard Rock, but that would be what you’d see in the very … Right away, that’s what you’d see if we actually got a launch here before the end of the year.
Look at Fanatics’ plans for the start of NFL season
Matt Brown (03:39):
We have talked a ton about Fanatics here on the podcast, and we know there’s a lot of money behind it. We know that there is potentially a lot of reach behind it given their database with their sports memorabilia business that again, we think is at least … We should call them lukewarm leads if not hot leads. I mean, these are people who have spent money in a sports space before, right? I mean, they have enough fandom to where they would want to buy a jersey, or a hat, or a ball, or whatever, shirt, whatever it might be. So there’s at least warm leads if not hot leads for all of that. And Fanatics looks like they are starting to get with it here.
Dustin Gouker (04:15):
Yeah, they’re going to be live with basically 11 states by NFL season. Pretty good for doing the math there. That’s going to be a lot of the largest states for sports betting. It also points out how big the PointsBet acquisition was because it’s not clear that they’d be in all of these states without PointsBet because right now, their Fanatics Sportsbook itself, the actual Fanatics sportsbook is live in four states: Maryland, Massachusetts, Ohio, and Tennessee. Then seven others are basically PointsBet. They’re rebranding PointsBet to “PointsBet, a Fanatics experience,” very fancy, but that’s getting them into seven states including the likes of New Jersey and Pennsylvania, Colorado, things like that.
(04:55):
So, it’s going to be interesting. We’re going to see really quickly what the impact of Fanatics is because they’re going to be live in all these states. I mean, I’d say the states where Fanatics Sportsbook proper, not just PointsBet is going to be the … Or those are the ones that are going to really be the telltale signs of how they’re doing and how they’re converting customers and like you said, taking those leads and turning them into bettors.
(05:18):
For better or worse, they definitely have … they have transactional history with customers. That’s something that you didn’t necessarily have with Barstool. Maybe somebody bought a T-shirt or whatever before they actually signed up with the Barstool sportsbook, but they didn’t always have a transactional relationship with a customer. They just had somebody reading their stuff, following Portnoy or whoever else.
(05:37):
So from that standpoint, Fanatics has a better starting point on these leads and it’ll be — we’ll see because they’re going to be in day one of NFL — how much are they quickly cutting into market share? Are they going to have a lot? Obviously in the seven states where PointsBet’s being rebranded, they’re going to have already those customers in there as well. So we’ll see what they have. The PointsBet starting place. They have this flatfoot start alongside other sportsbooks for the first NFL season. Again, Ohio is probably the biggest litmus test. They’ve been in beta there for a while. This is the first full NFL season that bettors and sportsbooks are going to be active there. So that’ll be fascinating to see what these numbers look like and how quickly Fanatics is gaining or not gaining market share.
Matt Brown (06:23):
From the backend standpoint. It’ll be interesting for us to hear too, just anecdotal feedback from the people who had a PointsBet experience, and if any of that gets changed at all, because we do know PointsBet was one of the quickest ones to limit some bettors out there. Certainly took lower limits than a lot of the other books and things like that.
(06:43):
And so Dustin, I don’t know if they could come in and change a philosophy like that very quickly, or what all that entails, but it will at least be interesting to get some anecdotal experience for some of these people who did tap into PointsBet then started getting the deals where they could only bet 20 bucks a game or 25, whatever. Some of these futures bets, I saw tickets where it’s like, “Oh, we’ll accept $12 on this futures bet,” and things like that. So if Fanatics can do anything to change philosophy of bet taking as well.
Dustin Gouker (07:11):
Yeah, yeah. I mean, I think I know from a little bit of behind the scenes, Fanatics is looking to be a bet taker, I think. I mean, not like they’re not going to limit anyone, but I think they’re out there to … I think they value their trading. I don’t think they’re out there just to … They’re not going to take all comers, but they’re not going to sit there and limit you to ridiculous amounts either. So if they don’t, that would obviously be … I’d say that’s a little bit different from what we’ve heard or what I think we expect out of Fanatics when it gets into the market here.
(07:39):
But yeah, it’ll be interesting and were people into PointsBet and not into Fanatics, who knows? Probably. They probably won’t care when that transition happens, although later on they’re going to be fully moved over to Fanatics Sportsbook. So this is placeholder until regulatory approval in these states where sometimes it takes a little … It’s not like you just flick a switch. Oh, now your software gets it and they don’t. There has to be some work that goes on to make that happen, so it’ll not be ripping the Band-Aid off. It’ll be more of a slow roll here as we get the full Fanatics experience in these other states.
Data about sports betting commercials so far in 2023
Matt Brown (08:17):
We’ve talked a lot about sports betting ads and what we think might be at least a more noticeable tick up as we head into NFL season. It is the prime acquisition season for these guys. And of course, there’s other sportsbooks that are entering the market. We just mentioned about Fanatics coming in. Bet365 is entering new markets, et cetera. So there’s at least going to be new players in some of these markets for them to come in and add to what has already been some of these other books that are marketing out there. I guess maybe we didn’t quite know it, Dustin, because we just, I guess, got used to it or something like that. But actually a story came out yesterday over at LSR that said the ads were actually up.
Dustin Gouker (08:53):
Yeah, I mean, this is fascinating. This is the non-NFL part of the season. We saw the data from iSpot, which tracks the advertising in the United States had from January to August 15th, 25% up for sports betting ad impressions year over year, which is crazy when we take everything we know like, oh, regulators are reigning in. Oh, we’re trying to get to profitability. Oh, we’re spending less on marketing. There’s actually been more ads. Obviously, where they’re spending it is part of that, too. They’re not necessarily always just on NFL games or things like that where the inventory is much more expensive, but there’s just more because of different channels or where they’re going.
(09:31):
It was fascinating to read that the most popular destination for the ads was a lot of syndicated stuff in a lot of places. “Friends” is one, “Friends,” the sitcom. “South Park,” these are apparently the big draws for ad impressions. So instead of spending a lot for a smaller amount of inventory on a live game, they’re going to syndication or something like that, where it’s much cheaper presumably, but you still … If you convert at the right rate or that channel is working, putting a commercial on “Friends,” then you continue to do that. So, it’s fascinating that despite everything in the macro that there’s actually more ads out there in the world, and maybe that dovetails with people’s experience, that there’s still a lot of this out there, even though there’s a little bit of pullback on how much they’re spending and maybe where.
Matt Brown (10:25):
We know that there will no longer be any Barstool Sportsbook. We know that Barstool, as far as the gaming space goes, at least from an operator standpoint, not going to be around. I imagine there’s going to be someone take a risk on doing some marketing and gambling and different … I mean, some marketing spend and maybe even some partnership stuff with them, I guess Dustin, I don’t know. I mean, we shall see as that all goes, but we did get some news throughout the course of all this, despite the fact that the company did get bought back for just a dollar from Penn. There’s going to be some reductions over there.
Dustin Gouker (10:58):
I mean, this is not really a sports betting story anymore because Barstool Sports isn’t in it, but it is kind of like the aftermath of what we saw with Penn and all of that. But so, it’s fascinating to learn a little bit of what was happening. Barstool, yes, the top-line news is laying off 25% of its employees, Dave Portnoy announced this week. Result in 100 jobs, and I’m going to flip this back to you having trouble understanding all of this. So, they have around 430 people, it says … The reporting I see at the New York Post says they added around 300 people in the three and a half years with Penn.
(11:32):
So, I’m not sure people understand this. Most of the people on the podcast probably understand this, but these people … People were not being hired to run the sportsbook; that was over on Penn, right? Penn Interactive. Those are the people who are doing the marketing for the sportsbook, actually running the actual sportsbook and everything that goes along with it.
(11:49):
So, I’m having trouble squaring where these people … what these people were doing. Portnoy on a podcast the other day was saying, “Oh, these are a lot of business people.” We’ve heard this is a lot of … because it’s a public traded company, it’s a regulated company that there’s needed more of these positions. OK, I can buy some of that, but 300 people to … and then they’re losing money is the other part of this. That’s why they’re doing this. They’re losing, according to Portnoy, like a million dollars a month. So what were these 300 people doing? Because it wasn’t obviously not doing very … They weren’t doing anything to convert people to gambling, which was really supposed to be Barstool’s main mission aside from growing the media business. So I’m at a loss of what these 300 people were doing, and I haven’t seen a listing of what they do, but I’m a little confused.
Matt Brown (12:40):
Yeah, no, I mean, I looked too, to see if it was anybody that maybe I’d recognize something. Because like you said, the people that were doing the gambling content for them, it’s not like that they’re gone. They’re going to still do gambling content, it’s just whether … It just depends on how they go about it all, but they were using guys that had already been there and were there for a long time anyway. They weren’t acquiring these guys to do gambling content, right? I mean, it was already … They were using some of their more prominent characters and stuff that were doing the most of that content.
(13:07):
So yeah, I don’t really know. I mean, I don’t frequent the site. I think they had almost tried to take on more, almost like a Yardbarker-ish type approach there for a while where there was a blog on everything. There was basically a blog for every single college and a blog … whatever.
(13:25):
But I don’t know if that had to do with some of the downsizing too, just because you can only assume that the bigger schools are going to have bigger followings and the smaller schools are going to have smaller followings, and at what point does the juice not be worth the squeeze with all that?
(13:38):
But yeah, it was super interesting. About 100 people, I guess are being let go today, which is certainly a big bummer. But again, we see this a lot Dustin, right? I mean, companies, they start to get bigger, they start to grow, then they overhire, and then when they overhire, then they have to immediately go, “Oh, we overhired,” and then they have to get back into somewhere between where they should have actually grown to and where they thought they were going to grow to, and you settle in at a level. So, probably what ended up happening over there at Barstool.
Dustin Gouker (14:10):
Yeah, I just don’t know why Penn was green-lighting 300 jobs. What was the business plan? Because they weren’t really growing the media empire, they weren’t really … Like I said, they didn’t go hire a bunch of people to do gambling content and to try to convert people to gamblers. So yes, I can buy some of these people. Publicly traded company, you need better accountants, you need better HR people, you need some stuff, but that’s not 300 people. It’s not even 100 people to make that happen. So it is just a mystery to me.
(14:41):
So yeah, I mean, we’ve given Barstool a little bit of a pass on this and laid the blame at Penn’s feet, but this one’s both. Why were there 300 people hired and there doesn’t seem to be any plan to make them better as a gambling acquisition funnel. So that’s the mystery to me.
Matt Brown (14:59):
Sometimes when you get handed a blank check, you write an extra zero on it, and I think that’s probably what ended up happening here. It was just like, “Oh, we have the freedom to do … All right then, let’s just go ahead and see how far we can push this until they tell us to stop.”
The latest on the Kentucky launch
(15:13):
Well, the answer … the stop was, is when it was no longer being paid for by somebody else. It’s when it’s being paid for by Marshall yet again. All right, let’s get out of here and let people know what’s going on in Kentucky.
Dustin Gouker (15:26):
Yeah, we’re getting closer and closer. Again, September 7th launch, they’re aiming to launch retail sports betting for the start of NFL season. We had some news this week as the commission that is dealing with the launch of sports betting and regulating it has the recommended catalog of things you can bet on. There are lots of omissions that sometimes you see in other states, sometimes you see Oscars, some other markets that are within. So what we’ve seen is pretty standard, what they’re going to approve for what’s there. You can obviously bet on most of the major sports, you can bet on … You’re going to be able to bet on the hot dog eating contest next year. Big to you in Kentucky.
(16:11):
We could go over to LSR, a good story breaking down what was approved, what’s not, including the full list of what’s there. But the main takeaway here is we’re really close to sports betting, online sports betting, still a little under a month away. If everything goes according to plan, supposed to be later, you could begin registering your online accounts actually a few days ago, but you’re not going to be able to actually place a wager until the very end of the month. Again, if that timeline works out.
(16:41):
So, closer and closer for Kentucky, then we’re still, North Carolina is still several months away, if not longer, probably later, probably sometime next year. But all eyes on Kentucky and what this launch does around the start of the NFL season.
Matt Brown (16:56):
Pickleball also approved in several different states this week as well.
Dustin Gouker (17:00):
Pickleball is, I mean, conservatively a zillion dollars a year.
Matt Brown (17:07):
I’m like, could you imagine being in the trading room and people be like, “Oh, what are you?” “I’m the NFL. I’m the NFL.” “What are you?” “NBA,” whatever. “What do you do?” “I’m the pickleball guy. I set the pickleball odds.” And it’s like, how in the hell do you set the pickleball odds? I mean, I don’t even know what’s going on there. But yeah, several states allowing pickleball bets now.
Dustin Gouker (17:28):
And this even came up in Kentucky. I don’t think it was in the list of stuff is approved, but somebody was wondering, can we bet on pickleball?
Matt Brown (17:34):
Yeah, I mean, listen-
Dustin Gouker (17:35):
Pickleball’s hot.
Matt Brown (17:35):
… it’s a thing. Yeah, I know it’s a thing, could you … You’re the guy. You have the smallest cubicle. The air conditioner doesn’t hit you, doesn’t whatever, and they’re like, “Dude, what’s wrong with that guy?” They’re like, “Oh, he’s just the pickleball. He’s the pickleball guy, just … It’s fine. He sets three lines a week, and that’s all he does.”
Dustin Gouker (17:52):
Is there actually somebody out there that’s their job to set … At FanDuel, to set pickleball lines?
Matt Brown (17:58):
Someone has to. I mean, someone has to be the … There’s no data … It has to be just a human that knows pickleball, there’s-
Dustin Gouker (18:06):
If you listen — FanDuel, or any company-
Dustin Gouker (18:08):
… pickleball. I want to talk to your pickleball trader, get them on the show. I have millions of questions.
Matt Brown (18:15):
I also do, that’d be a whole special episode for us, for sure. If you’re the pickleball trader, hit us up over on the Twitter machine. We’ll certainly take you. Guys, everything we talk about here over at legalsportsreport.com. So go in, take in the good words of all those guys that are taking the time to watch, listen, write up all of the different stuff that’s going on across this great country of ours. If you want to follow Dustin over on the Twitter machine, @DustinGouker. If you want to follow me and you hate yourself, @MattBrownM2. For Dustin, I’m Matt. Talk to you guys next week.