Florida Sports Betting Timeline Set Back Once Again | Sports Betting News | LSR Podcast 209
A new challenge in a state court means Hard Rock Bet will not be coming back to Florida as soon as some hoped. Plus, the latest on the launch of online sports betting in Kentucky and why a mysterious change to the law in North Carolina could slow down its path to online wagering.
Hello, and welcome to episode number 209 of the LSR Podcast. My name is Matt Brown, joined each and every week by the brightest minds in all the gaming industry. With me, I have the man, the myth, the legend, Adam Candee. You can find him and his team’s work over at legalsportsreport.com. And you can find him on the Twitter machine @AdamCandee, two E’s, no Y. And if you hate yourself, you can follow me @MattBrownM2. Talk some North Carolina, talk some Kentucky. We’ll talk about follow-up to a story we mentioned last week about a palp out there. But lots of Florida news to hit here, so let’s go ahead and kick things off with Florida.
Adam Candee (00:47):
Yes, if you feel like you’re hearing a lot about Florida right now, that’s because there’s actually a lot going on at this moment in the state of Florida. We talked to you a little bit on last week’s podcast about the news coming out of the Florida Gaming Control Commission, about the cease-and-desists that were sent to PrizePicks, Underdog and Betr. And then come this week, we saw what we thought might be a challenge that we would wait a little bit longer for, but I think there’s a little bit of signal in when we saw this come from West Flagler Associates, with their challenge in the state courts against the compact signed between Ron DeSantis, the governor, and the Seminole Tribe that allowed Florida sports betting to start, and then eventually was shut down in 2021.
So, what happened this week was that the challenge was filed up to the state Supreme Court about this being an unlawful expansion of gambling against the state constitution that was changed in 2018 in Florida, and what we see is that it was filed prior to the ultimate disposition of what’s going on with the case in the federal courts, right? It is considered to be a low probability that the US Supreme Court would ultimately choose to take up this case on the merits that have been presented on the federal side. In fact, the decision that initially set in motion, the idea that Florida sports betting could be restarting soon is a decision that is based on them saying, “If you want to challenge this, you probably need to go through the state court.”
Well, after potentially exhausting their options in federal court, West Flagler is now going through the state court. If you’re thinking about, “What does this mean to me? I’m in Florida, when can I actually bet legally online through the Hard Rock Bet app?” It appears that based on the timeline through this challenge, the soonest that you’re going to be able to see it come about is probably sometime in November, which is a big change. Because we were kind of at a point where we were saying it could be any day now based on the federal court decision.
Matt Brown (02:46):
Yeah, I know people in Florida have been following this pretty closely because it was a very rare instance, Adam, in which like you said, we had it turned on, and then the switch got turned off. We thought that there might be a lot of changes along the way in these states where it’s like, “Ah, we came in with tax rate X, Y, Z, we’re going to go back to A, B, C. Or this regulation we had in effect, that doesn’t make any sense, we’re going to get rid of that, we’re going to allow this.” We knew that there would be kind of ebb and flow with all of this, but not really turn it on, turn it off.
Adam Candee (03:20):
No, and that was definitely surprising. And I think the first court decision that made it so that it had to be turned off, surprised a lot of people. And now it’s kind of headed back a different direction. But the question ultimately is going to come down to whether or not this expansion of gambling is truly an expansion because there is wagering off of tribal lands? And that’s why it’s interesting this is happening in state court, because as you read the legal analysis from our expert, John Holden, there’s probably a question under the Indian Gaming Regulatory Act, IGRA, at the federal level that needs to be answered here when it comes to whether or not app-based gaming involves the location of the bet being at the server on the tribal land, or is it actually being placed on the phone? This has been a question for god only knows how long.
It’s a Wire Act question really in the end when we get down to it, there’s something to be said for that in a different capacity. But ultimately, strange that it was shut down the way that it was, compared to what’s happened in other markets. But that’s the reality we’re living under, with the fact that it is the Seminole Tribe’s exclusive right to offer sports betting in the state of Florida and their partner in Hard Rock. So they are the ones who ultimately, the rules have to be run through them, and the challenges to those rules are now coming in court.
Matt Brown (04:42):
And Adam, just to put a bow on this, and I don’t want to speak out of turn here and put words in your mouth, Adam. I’m guessing your answer here is going to be, “Your guess is as good as mine.” But is there a possibility that if this does get turned back on again, that we might see it actually turn back off again for a second time?
Adam Candee (04:57):
I don’t think so. And because I think Hard Rock does not want to go through that false start situation again. They’ve already been down for the better part of two years now, after having started. And let’s not make it sound like Hard Rock Bet isn’t operating anywhere; they have multiple states outside of Florida. It’s just that Florida is by far the biggest market opportunity for them, and by far the most lucrative of places that they can do it. Because, surprise, they’ll be the only one there, and Florida is one of the largest populations in the country. Now, the timing of what we’ve seen come out of the Florida Gaming Control Commission in terms of the orders to stop for those fantasy sports companies that I mentioned with their pick’em products, certainly seems like timing that is related in, maybe not correlation, causation. You got to figure out which one it actually is more correlation than causation. My brain’s not working very well. I’ve been doing radio for a while already this morning.
But the point of the matter ultimately here is that, when we see these orders come down from the Florida Gaming Control Commission, they’re saying that, “You are taking illegal bets to the companies that are offering pick’em products.” And we’re kind of down this same road that we’ve been going down for a number of weeks now with decisions in a number of states where you have state-level regulators saying that, “No, this fantasy contest that you’re offering against the house is not actually a fantasy contest. It is a form of sports betting.” Now, these companies are going to continue to operate in Florida until this is, I’m assuming, adjudicated in court. Or they come to some sort of understanding with the Casino Control Commission. Maybe it ends up looking like something like in Colorado where they have to tweak how the game is offered in order for it to be considered legal. Who knows? We will be tracking it of course.
Matt Brown (06:41):
It is a follow-up to a story that we had last week on the podcast, but it is something that has happened a few different times here. Actually, not as many as you would think, considering how widespread sports betting got rolled out, and how quickly it got rolled out in some states and things like that. But there was a palp, or if you’re not familiar with the term, just an error that was posted at one of the sportsbooks, Barstool in particular, which is Penn, which will soon become ESPN Bet. And Adam, you and I, fairly savvy bettors, understand that this stuff just happens every now and then.
It’s unfortunate; we don’t want it to happen. But again, a lot of times this is just the computer’s either wrong, they flip a number here and there, sometimes the stuff’s getting entered by hand, and it just gets flip-flopped, some things happen along the way. We took the stance last week that, “You know what? Very rare…” We’re typically in favor of the players. 9.5 times out of 10, we’re always in favor of the players. But in this particular instance, hey, I get it. If you’re the house, “Hey, we posted something, you shouldn’t be able to just come in and get free money and take advantage of it.” And apparently that got upheld in court.
Adam Candee (07:47):
It did, and not necessarily in a court of law. This was at the Massachusetts Gaming Control Commission ultimately ruling in favor of Barstool. And this is an issue in numerous states, and our Sam McQuillan at Legal Sports Report has contacted a number of state regulators and hasn’t found anyone yet who has said, “Yeah, Barstool is in the wrong to try to void these bets.” That doesn’t mean that someone won’t say that at some point, but these are the realities of state-level regulation is that every state can choose to handle this however they want. New Jersey is going to review it a little bit more. Massachusetts has already said Barstool is able to void these bets. And Matt, to further what you and I discussed on the podcast about this last week. This is the very definition of an obvious error, right?
Matt Brown (08:32):
Adam Candee (08:33):
There are some errors that are not as obvious. If it is let’s say a prop, where it was supposed to be 56 yards and they put in 65 yards. Or supposed to be 56 yards, and they put in 36 yards, I think there’s a reasonable case for the bettor to be made in all of those instances.
Matt Brown (08:51):
Absolutely. Absolutely. Bad line and error are two different things.
Adam Candee (08:55):
Correct. And there’s no way to prove that a bad line is a palpable error, right?
Matt Brown (09:01):
Adam Candee (09:01):
There is a way to prove that a market on anytime touchdown scorer that is still available in the third quarter of a game is an error. There is no way in which any sportsbook on God’s green Earth is keeping that market up during the game at the same prices that it was pregame. It’s not to say that there can’t be a live anytime touchdown scorer market, but this clearly was not the case in that situation.
And so, Barstool being allowed to void those bets is certainly within the rights that they have with regulators. Now, we’ve heard complaints from bettors about the fact that their bets were voided. And some have said that they have had their accounts suspended as well, and that is obviously under the purview of Penn Entertainment and Barstool Sportsbook, for as long as we have it, to say that, “We don’t want your business anymore.” It’s not really any different than a customer getting limited.
It’s not really any different than getting the ban hammer because we think you’re too good. Those are things that the business can choose to do if they think that you’re not someone that we want here, and that is a much larger and broader question that we have to deal with as an industry. But Matt, I’m going to give an example of something that’s happened to me, and then I’m going to pitch this back to you. Multiple times at sportsbooks in Nevada, I have found bad prop lines, right?
Matt Brown (10:17):
Adam Candee (10:18):
And I have wagered more on those than I would have at my usual stake, sometimes significantly more. And when I’m talking about four, 5x the usual stake that I would put on something like that. And they were very clearly bad lines; they were not palpable errors.
Matt Brown (10:35):
Adam Candee (10:36):
A couple of times, I won. A couple of times, I lost, never heard a word from the book about it. Partially because I handled it in what I think most bettors would say is a responsible manner. You had the opportunity to get action on this line, you did. But the difference in the Barstool situation is, this was blasted out to a discord, and this was hammered from far and wide with someone basically taking a skywriter from a plane and saying, “Bad line at Barstool, bad line at Barstool.” And if Barstool wants to come back and say, “Hey man, that’s not cool and we don’t want your business.” Then, whether I agree with it or not, I understand it.
Matt Brown (11:11):
Yep. Listen, again, I am a bettor myself. I’m a player myself, and I’m pretty much always on the side of the player. But this, to me, is just incredibly obvious. I don’t understand why this is even an argument. If you’re going to go in, and you’re going to take advantage of something that obviously you are taking advantage of, right? This is an error. Like you said, it’s not a bad line. This is not … OK, let’s take this back. For example, when things weren’t quite as automated, and there were apps that were very rudimentary here in Las Vegas, there were two different times where someone just mixed up. You could tell it was like a hand error, someone’s typing in line, and it was wrong team favor.
I remember this very specifically. One team was listed at minus six, and the other was at plus six when it was supposed to be the other way around, right? I actually hit the little chat button and I’m like, “Hey listen, you got the wrong team favored here.” This is obviously an error. And that, to me, is, again, obviously an error. It’s not a bad line like you’re talking about. Sometimes, these guys will put up lines for props. And specifically props, we see more times than often, because they don’t take into account injuries, or change in philosophy, or a guy’s increased usage and all these. We see bad lines in the prop market all the time.
One of my good friends — and free plug here or whatever — there’s a site called Establish the Run, and these guys basically make a living off of betting prop lines or whatever, because, again, there’s an edge in those sometimes because the computer or the person who’s coming up with these things just don’t factor in all the stuff. So, I’m with you, man. It’s like, for me, Penn has every right in the world to say, “You know what? OK, cool. If you want to take the money and you want to run with it, it is what it is. We’ll just respectfully decline letting you do business here anymore, because you obviously…” Which is another point we made last week, but if you didn’t listen last week.
If you made the bet, and as soon as you paid out, you withdrew real soon afterwards because you knew what you were doing. You knew that you were doing something shady in the first place. So, it’s kind of like, “All right, fine, you got us, but we don’t have to let you get us again.” And I think that’s perfectly fair. And anybody that has an opinion otherwise, I would need to hear why that’s not fair. Seriously, that’s all I got to say about that.
Latest on the launch of online sports betting in Kentucky
All right, so let’s head to Kentucky. And Adam, we very often here over the last three years, we were able to talk about new launches. And it was one of the best, our favorite things to do. It slowed down obviously as we’ve gotten more and more states legalized across the country, but we do have one going live. Shout out to our very own Stephen Andress, who will have to quit crossing the bridge to go make his bets pretty soon here, but it is coming pretty soon.
Adam Candee (13:56):
So, I want to address the Stephen Andress situation here for a moment. And I’m going to take it back to when I used to work in politics, and I used to work in Washington, DC. And at the time, that was the only place where I could get a Five Guys burger, right?
Matt Brown (14:10):
Adam Candee (14:11):
I remember, on my lunch break, when I had an hour. Taking the subway 20 minutes to the Five Guys, taking my 20 minutes to eat, and taking my 20 minutes to get back on my lunch break, because Five Guys mattered that much to me.
Matt Brown (14:23):
Adam Candee (14:23):
Our buddy, Stephen, places a lot of wagers. And I’m really hoping that having it in his pocket right next to him in Kentucky will lead to, let’s just say a little more slower pace, discretion.
Matt Brown (14:37):
When it comes to-
Adam Candee (14:38):
Yeah, a little more discretion from our buddy. Shout out to The Lines Megapod. Check us out every Friday.
Matt Brown (14:43):
But for real, this guy was on twice a week making the trip across the bridge like … Listen, that’s dedication, that’s whatever. But there were a lot of people that were doing that. We mentioned this all the time. The geography of a lot of these places. I mean, it was easy for him to do it. It took whatever, it took half an hour, but I mean, it was very easy for him to do it, and he certainly wasn’t the only one doing it.
Adam Candee (15:05):
No, and that’s part of what we’re actually exploring at LSR. That’s some content that you can check out by our Pat Evans at Legal Sports Report this week, where Pat is exploring what is the effect going to be on neighboring states by this Kentucky launch, Indiana being one of them? But you have states surrounding Kentucky that all have legal sports betting. So we’re taking a look at what we think the revenue effect of that is going to be. We’re also taking a look at what we think the revenue effect will be of allowing 18-year-olds to be able to wager as a couple of the sportsbooks are going to offer under Kentucky law, which allows 18-plus to be able to bet.
I would also point to a great article that our Eric Ramsey did, projecting the overall revenue for the market. He thinks that Kentucky sports betting between here and the end of 2023 can generate a billion dollars in handle, and a $100 million at least in revenue. And so I would suggest everybody go check out those stories at Legal Sports Report. As for my thoughts overall on the Kentucky market, it’s going to be interesting to see how a broad online launch that doesn’t have a professional sports team involved shapes up. And Louisiana is going to be an interesting corollary, right, Matt? Because you had the Saints for a while there when it came to Mississippi and then Louisiana came aboard and was able to grab some of that. But really, largely an LSU market, and an SEC, and college football market, in the end. And we know that Louisville and UK are the ones that are dominant in the state of Kentucky. So I feel like we might not even really see what the state of Kentucky is capable of until we have some college basketball numbers come in.
Matt Brown (16:44):
Yeah. And the thing is, you can go in, and one of the interesting things about Kentucky if you go, there is a directional Kentucky college for basically every single direction you can come up with. There is a Northwest Kentucky, Southwest Kentucky, an East-West Kentucky, a North-South Kentucky.
Adam Candee (17:00):
Yes, East-West Kentucky, very popular.
Matt Brown (17:03):
It’s like the longest list of directional schools you’ll ever see there in Kentucky. Yeah, I mean, I’m with you. Yeah, it’ll be, we know that Kentucky basketball is seriously in these people’s blood. And then not only that, you do get more frequent games. Now, we get it, they’re not as big as the NFL, and it’s a Sunday thing to where you can prep all week long for whatever, but you do get more games when it comes to basketball. And so, yeah, I’m with you. I think that there’s some pretty … I think there will be some surprising numbers come out of Kentucky, given, one, the appetite for the state as it is in the first place. And then, two, given that you do have more frequency of what is considered big to them.
Adam Candee (17:44):
The only thing I would use as a devil’s advocate to both of us, because to both of the points that we just made, is something very interesting that Eric Ramsey pointed out. Which is that, Kentucky is a bottom 10 state per capita in household income. And so, there will be some question as to how much there is to bet there. And I think there’ll be some question from the whales aspect of, how many large players do you have, and who can attract those players? Because there aren’t as many to go around and you do have some new entrants like 365 and others who are getting into that market.
Matt Brown (18:15):
Yeah, there might be a lot of users, and maybe not a lot of high-end users there in Kentucky, but I think there’ll be … Listen, $20 bettors have a place in this world too, Adam; $20 bettors.
Adam Candee (18:27):
Matt Brown (18:27):
Ten-dollar bettors have a place in this world, as well. Let’s close things out with what’s going on in North Carolina.
Mysterious change to the law in North Carolina
Adam Candee (18:33):
This is interesting from a legislative perspective, because we’ve seen changes to bills at the last second, but what we have not seen is changes to bills months after they were passed and signed into law. And that’s what we’re seeing here in North Carolina. And the change might not seem that big to the average bettor, but it is big to the sportsbooks who are involved, because this was set up to be an untethered market. Meaning that the online sportsbooks do not have to have a partnership with a physical property, or one of the pro sports teams or a NASCAR track, or whatever.
Now, they were going to be given priority in the state if they used one of those partners, right? Their license application was going to be given priority. But a change came through in the state budget, that pretty much no one wants to claim. None of the legislators are coming out and saying, “I’m the one who pushed for this, that is going to tether online sports betting. That is going to require that these online sportsbooks work with the professional sports organizations in the state.” And so we started doing some digging and basically saying, “Well, who would want this?” Well, clearly it’s not the sportsbooks who would want this? They don’t want to have to pay someone else to be involved in the state. They don’t want to have a middleman involved. They want to go through the state, pay their license fee, and let that be that.
We heard some rumblings that NASCAR could be behind it, that NASCAR itself might be pushing for it, to make sure that they have that partnership. And we know that NASCAR has ambitions to be bigger in sports betting. They want to use it as a way to drive revenue as a number of professional organizations do. But NASCAR has kind of a unique need to drive more revenue right now. After that story posted, some other sources came back to us and said, “Maybe not NASCAR,” but then they also didn’t suggest to us who it would be.
So, just I thought a notable thing in terms of the legislative process, that they used the state budget, which is being passed much, much later, and tied this change into the state budget, basically into something that’s must-pass, to be able to get it done. It might not look like much on the surface, but it definitely changes the complexion of the market. And for those who were hoping for an early January launch, which is the earliest that it can launch is essentially the last week of the NFL regular season. It is the sort of thing that can delay when the market is able to launch because you’re talking about a different regulatory process, and different organizations that might need to be vetted.
Matt Brown (20:54):
I also as well too have heard a lot of NASCAR rumblings about all of this. They think that there is some parallel to the golf angle that we’ve talked about several different times here on this, which is, “Hey, look, it is typically at this point, kind of like an older audience. It is an audience where the retention can kind of come and go, because same deal with the golf tournament. You don’t necessarily have to sit and watch it for the entire time to get the gist of what’s going on. You can kind of parachute in and out.” Well, helicopter in and out, I should say. The same deal with NASCAR, right? I mean, it’s a long race. You don’t necessarily have to sit there and watch the whole time. But you add a gambling element to it. Could that attract maybe some new fans? Could that attract some younger crowd? And then also in-game betting, micro betting in-game, different stuff like that, could that help with retention and stuff?
Because as we know, Adam, these other sports look at these television deals that the NBA and the NFL is getting. And they probably start to get scared, right? Because they’re like, “Hey, we’re going to get less money if they have to continue to give more money to the NFL or more money to the NBA. We need to figure out a way to make sure that this audience retention and the engagement, and all the stuff that we can provide is at least level, if not increased. We certainly don’t want to decrease it precipitously” because that is really and truly a huge bottom line thing for these leagues.
Adam Candee (22:18):
And right now, in most states that break it out, NASCAR betting is fractional, right?
Matt Brown (22:23):
Adam Candee (22:23):
You’re talking about, at best, 1%, 2% overall. What I think is the real opportunity here for NASCAR is something that ties into how sports are consumed these days in multiple ways. You mentioned one of them there, the idea of not watching a whole broadcast.
Matt Brown (22:38):
Adam Candee (22:38):
That’s what everyone is driving for now. How do I get somebody interested in 10 minutes, 15 minutes, 20 minutes of a broadcast that goes for three or four hours? Baseball is in this place. Football, to some degree, is in this place too. And we’ve seen next-drive markets come out from Simplebet that are being implemented. But I think the other thing that goes to the younger generation, that really should be appealing to NASCAR and to golf as well. Maybe more to NASCAR with the way fandom works, is that younger consumers care more about individual personalities than they do about teams. It is not the sort of blind loyalty to the same team that your dad and your grandpa liked. It is more about, “I like Kevin Durant. I don’t necessarily like the Phoenix Suns.” Well, when it comes to NASCAR, there’s no better sport for that, right?
Matt Brown (23:24):
Adam Candee (23:24):
You pick your driver, and your driver is your guy. And that has to do much more with force of personality than it does with, “Well, my granddaddy was a Richard Petty fan.” Well, OK, cool. Richard Petty’s not racing anymore. So that’s the sort of thing that I think NASCAR finds appealing.
Matt Brown (23:39):
Yeah, it’ll be interesting. I do think that there is growth potential for both. And listen, I’m not a NASCAR guy myself, but I do see the growth potential from a gambling aspect. I mean, I do think that it could open the eyes to a different generation of bettors. And also, like you said, I think that if you can figure out a way, there’s already futures bets, of course, who’s going to win the Cup Championship, whatever. Maybe there’s micro in-season latch onto a driver stuff that can be figured out, right? The standings of the next three races or something. Stuff like that, to where you can keep the engagement high, but it’s not necessarily, “Oh, it’s over the whole course of the season.” Different things like that, I think that will be figured out as we get a little bit more savvy with all this, but it’s NASCAR, I’m glad that you brought that because I had actually heard some rumblings about that as well.
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