EPISODE 214 | LSR Podcast

When Dreamin’ Is All You’re Doing In California | Sports Betting News


25 min
Video preview

When Dreamin’ Is All You’re Doing In California | Sports Betting News | LSR Podcast 214

A mysterious ballot initiative to bring online sports betting to California just appeared, but its prospects look dim from the start. Also, a big DFS operator pulls its pick’em games from a big state, Florida gets ready to open in-person sportsbooks, and a long-awaited launch in Maine finally arrives this week.

Full transcript

Matt (00:08):

Hello and welcome to episode number 214 of the LSR Podcast. My name is Matt Brown, joined each and every week by the brightest minds in all of the gaming industry. It is me, it is my man, Adam Candee. You can follow him over on the Twitter machine, two E’s no Y on that last name for Adam Candee. And if you hate yourself, you can follow me @MattBrownM2. Everywhere you get your podcasts, go in, subscribe, rate, review. We really appreciate that and help to climb up those charts there. So thanks for all of the support. Everything we do, absolutely free here at LSR.


We’ll talk some Maine, we’ll talk some Florida, we’ll talk some Wyoming. But Adam, listen, it seems like every time we’re like, yeah, it’s probably way, way, way away, and it still very well might be, but every time we’re like, “It’s going to be forever until California gets done.” It seems like something always ends up popping up. And, sure enough, something pops up.

Adam (00:58):

And Matt, this is the definition of popping up. No one had any idea that this was going to happen beyond one cryptic tweet from Victor Rocha about a week before it happened, saying that there were rumblings of a sports betting initiative in California. And now, we had on Friday news come of requests for titles for a couple of ballot initiatives in California that would bring online sports betting to the Golden State. And the reason I’m saying this with absolutely no feeling or emotion is that this is pretty much dead on arrival.


No one involved knows where this came from. No one. The folks who are pitching it, we have no idea who’s bankrolling them. There are some ties back to the Pala Tribe in terms of the folks who filed it. And the Pala Tribe has said very clearly to LSR’s Mike Mazzeo, it ain’t us. The Association of Tribes in California who said it’s not us; the Indian Gaming Association, it’s not us. Nobody knows who’s behind it.


And that’s why I could sit here, Matt, and I could talk to you about all of the details of the initiative. I could tell you about how it’s set up. I could tell you about what the fees would be, it doesn’t matter. This is never coming to fruition. This is never happening. I don’t know why anyone is wasting their time or money. I believe it was Howard Glaser from Light & Wonder who said you’d be better off taking the money and putting it on the roulette wheel or setting it on fire. So, we’re once again in this weird place where someone has decided to try to end run the tribes in California. And I think we saw very clearly in the 2022 election that if you try to end run the tribes in California, you’re going to go down in flames, again, to remind everyone, DraftKings and FanDuel sponsored a ballot initiative, which they shrouded in the idea of supporting homelessness, but it was really for online gaming in an open market in California that got 17% of the vote. One seven. Seventeen percent of people approved of that in California at the ballot.


And then there was a competing tribal initiative that was really just there largely as a measure to confuse and distract the vote. That got just slightly more than that. So it’s clear that if you’re going to try to do California sports betting in some way, shape or form, you’ve got to work through the gaming tribes that hold exclusivity, that hold sway in the state. Just trying to go to the ballot is no way of getting it done.

Matt (03:34):

But, if you did take the $20 million and you put it on one number on the roulette wheel and it hit, and then you got 35 to 1, then you might have enough money to go out and actually try and get this done. So there’s hope, Adam. There’s hope.

Adam (03:49):

And you know what? I have a suggestion for anyone who’s thinking about doing that. If you want to do it, you can go down to Florida because now they’re going to have roulette now, too, right? And you could bet it at a tribal casino, and that way you’ll just be giving the money to the tribe if you ultimately lose that roulette bet. It works both ways.

Matt (04:08):

Let’s talk about how you could get some instant promotion for your casino would be taking a $20 million roulette bet, like a $20 million roulette spin. I’m guessing, because of the odds involved, somebody would do it. Maybe at like $5 million. I don’t think someone would do it at $20 million? But someone would do it, ’cause it’s very bad odds, but Adam, could you imagine if that hit, I mean, seriously, what it would do to your quarterly earnings on one single roulette spin?

Adam (04:41):

Well, listen, there’s someone I think who’s right for the job. We hear about these seven-figure outlays all the time. If you’re in the Houston area right now and you’re interested in perhaps some furniture or bedding, you might just be the guy.

Latest on Wyoming DFS inquiry

Matt (04:58):

This is true, this is true. But again, if anything comes of this California stuff, obviously we’ll keep it updated over at LSR, but we imagine that this is going to be something that we talk about one more time and that’s whenever it dies. So we will do that here on the podcast. Adam, what about Wyoming?

Adam (05:17):

Interesting story coming out of Wyoming from LSR’s Sam McQuillan. I want to shout out Sam. He’s been at the forefront of all of this coverage of pick’em games and whether or not they’re sports betting and all of the various regulators across the country who have been cracking down on these games from DFS companies that look a lot like parlay prop betting. So what we saw were some emails that were exchanged between a lobbyist in Wyoming and the Wyoming Gaming Commission. And these go back to the early part of 2023 in which the lobbyist man named David Picard points out to Charles Moore, the director of the Wyoming Gaming Commission, essentially a news article saying, hey, these products exist. They look a lot like prop betting. You probably should take a look at it, so on and so on.


And what we ultimately find out as it goes along is that Picard is registered to represent the Sports Betting Alliance in Wyoming. That is a consortium that includes FanDuel, DraftKings, Fanatics, BetMGM. He previously, going back a few more years, was registered specifically to represent FanDuel and DraftKings in the state of Wyoming. There are emails exchanged that essentially say that Moore realized that going and looking at the law that this was probably something that needed to be dealt with. It was interesting to see him communicating, though, and going back and forth and saying, hey, we’re working on, it hasn’t happened yet, so on and so on. I don’t really know that he owes anything to a lobbyist who’s asking about this. But what we see, ultimately is that on July 5th, the letters were mailed to PrizePicks and Underdog telling them that they needed to cease and desist offering pick’em games in the state of Wyoming. And then on July 6th, there’s record of those same emails, I should say, those letters being emailed to Picard and showing him that this happened.


Now, I’ve made this analogy before on this podcast. I’m going to give you the short version of it, once again, right now because I ultimately think this is where I fall on this. If you are playing a game and there are two coaches and one coach points out to the referee that the other team is breaking the rules of the game and the referee then enforces the rule, ultimately who’s at fault? Well, it’s ultimately the team that is breaking the rule who is at fault. It doesn’t necessarily matter how the referee became aware of it. Now, that being said, PrizePicks and Underdog by their statements had a much different view of what this meant, that the lobbyist was behind this, and it confirms what they’ve been talking about all along, saying that they feel like FanDuel and DraftKings have been pushing this.


And I agree. I mean, you can’t look at this article and feel any other way about it, right? You can see that someone who is registered to represent these companies has brought it to the attention of regulators in Wyoming. But I feel like some of the tweets and the comments went a little bit farther than that. Jeremy Levine and others saying this is art direction by the DraftKings and FanDuel companies saying they’re just telling the regulators and the regulators just do it and so on and so on. All right. It’s not that. It’s not that.


They are not getting regulators to do exactly what they say, but they did point out to the regulators that this is the rule that we think is being broken, and I think it’s reasonable then for us to go back and ask these companies, why are you pointing it out? I think we know common sense wise in our heads why they’re pointing it out, but Sports Betting Alliance declined comment, DraftKings and FanDuel declined comment, Picard didn’t respond to our requests for an interview, so they leave it up to interpretation by PrizePicks and Underdog and others to fill in the void since they’re not offering any comment as to what happened here.

Matt (09:12):

And I mean, listen, to be fair, right? I mean, isn’t that essentially what, it’s almost the genesis of Adam, you worked in all of this. I mean, isn’t this essentially the genesis of every single bill, every single action that gets taken? It’s like somebody goes to, whether it’s a lobbyist, whether it’s one of your constituents, whether it’s where someone comes to someone in power and tells them, “Hey, we should do this,” or “Hey, what do you think about this?” Or “I want to bring this to your attention,” et cetera, et cetera. I mean, this is the genesis of everything in the government as it is anyway.

Adam (09:44):

So, if I were operating a company that were taxed at, let’s just say N percent, and there were another company that wanted to get into the same space but was being taxed at one-tenth of N percent and they were offering a product that looked pretty similar to what I’m offering, but paying one-tenth of the corporate overhead, then I probably, too, would go to those in charge of the rules and say, “Hey, can you at least give me a ruling on this and let me know whether or not this is the way that it’s supposed to work?”


So it’s not that uncommon to me that a company like a DraftKings or a FanDuel or their representatives of Sports Betting Alliance or a lobbyist or whoever the case might be, would be going and saying, “Hey, this doesn’t look right, does it?” And months later, the gaming commission said, “You know what? It’s not right and we’re going to take action against it.” And so again, the DFS companies are trying to pitch this as that DraftKings and FanDuel don’t want the competition. I don’t think DraftKings and FanDuel would have any problem with an apples-to-apples competition, but this is an apples-to-oranges competition.

Matt (10:52):

A side note here, have you ever been to Wyoming?

Adam (10:55):

Many times, believe it or not.

Matt (10:59):

But was it for work or was it for pleasure?

Adam (11:01):

So I’ve been to Laramie, Wyoming, a number of times for work because that’s where the University of Wyoming is. However, I also won a trip on Wheel of Fortune to spend one week in Jackson Hole, Wyoming. And so I have spent a quality week in Jackson Hole, and I have to tell you, buddy, I had a great time.

Matt (11:20):

Well see, here’s the thing. I just went to wyoming.gov because I just wanted to see what was going on. Because I’ve always been curious about Wyoming, and their opening sentence about Wyoming makes you want to go to Wyoming. “Wyoming is where the untamed spirit of the West and majestic natural beauty open your mind and invigorate your senses to release your own inner freedom and sense of adventure.” I’m like, “I’m in.” I want to book a ticket right now. I mean, I am in, whoever wrote that sentence for wyoming.gov. Give that person a raise. I’m ready to go to Wyoming today.

Adam (11:51):

We’re going to hire him. We’re going to hire him, for work for LSR. They’re going to do better content than I’ve been doing for the longest of times. And let me tell you, on that trip to Wyoming, I went dog sledding. I rode a snowmobile through Yellowstone Park, and actually we were confronted by a bison at one point in which we were told stay very still as in perfectly still as in, don’t even try to take a picture right now because this is a family of bison that will F you up if you do anything, make a move toward them right now. So my inner freedom and sense of adventure was absolutely unlocked.

Matt (12:25):

I mean, what a sentence. That person, what a sentence. That is a hell of a sentence for Wyoming. Just keeping in the theme real quick. Let’s pivot over to Michigan and what they decided.

Big DFS operator pulls pick’em from big state

Adam (12:36):

So we know that Michigan, along with New York, recently changed its rules, again, to get rid of these pick’em games offered by DFS companies that are essentially prop betting. And the interesting part to me goes back to what we’ve seen now from Sleeper in New York, what we’ve seen now from Underdog in Maine, and now what we’re seeing from PrizePicks in Michigan, which is they have stopped offering the games. And in other states under different laws, these companies are still operating their products. They say they’re working with regulators, they say they’re trying to come up with something that can appease both sides and we’ll see. Maybe they will and maybe they won’t. But it is interesting to me that we have companies who have now looked at it in certain states and said, “You know what? We need to at least temporarily stop offering these games under the rules that have been promulgated in these states.”


And so we see that ultimately we find out by a customer email that went out. There wasn’t a big announcement or a press release or anything like that. It was an email to customers in Michigan basically saying, “Hey, we’re not going to be offering these games, nothing paid. We’re still going to do some free-to-play stuff, but we’re not going to do anything that involves paid contests in Michigan.” And I think that that says that the message was received and that maybe there was no wiggle room with the regulators in Michigan for PrizePicks, at least in the current iteration.

Matt (14:02):

I also think it’s fair for us to say here, anyone that plays these games, hey man, whatever. So long as it is available and legal in your state for the time being, play away. I think people think that we’re attacking the people that play them, too. No, not at all. Trust me, if I was in a state and it was available and people at that point, at least, told me that I could play it, I’d probably play them, too, right? I mean, it all just comes down to, like we said, this will eventually be either legislated or regulated or whatever somewhere along the way. And that’s basically all we’re doing with all this. But if you’re just wondering why this is such an incredibly hot topic right now, Adam, I just pulled open my little app store over on the Apple. I am an iPhone. I’m not an Android, but I am an Apple guy.

Adam (14:45):

Like any red blooded American should be.

Matt (14:46):

Yes. And I popped it open and granted, listen, this isn’t exactly why or anything because some of these are legacy apps, have been around way, way longer and all the people already have them, et cetera, et cetera. But it does at least give you some idea and you pop up in the top charts and the number one app on the sports chart is PrizePicks. The number one above Fox Sports, above FanDuel, above NBA, above ESPN, et cetera, et cetera. The number seven is Underdog. The number nine is Betr, and the number 11 is Sleeper. So again, just if you’re wondering why this is such a hot topic and why these other guys might care as much as they do, it’s because these guys are very popular right now.

Adam (15:29):

And they are offering their game in many states, not all states, but they are in states that are not legal to bet online in the regulated market and that aren’t going to be legal to bet online in the regulated market anytime soon, like California, like Texas. And that is something that is a major advantage.

Florida gets ready to open in-person sportsbooks

Matt (15:49):

So we were taking a look at California a little bit earlier, and now let’s head across the country and let’s go to Florida. And this is something, Adam, that we’ve been talking about this for months and months and months and months. On off, on off. Will they turn it on again? Will they turn it off again? What happened? What is the risk of turning it on to have to turn it back off, et cetera, et cetera? We’ve been juggling all of this for a while now. Well, it looks like we have at least some sort of understanding as to the plan for the rollout.

Adam (16:19):

Press release this morning from the Seminole Tribe that comes in the wake of the Supreme Court denying a stay of a mandate from a lower court that was favoring the compact signed between the Seminole Tribe and Governor Ron DeSantis that is going to allow them to start offering roulette, to start offering craps and to start offering in-person sports betting in December at six Seminole properties in the state of Florida. Now, the natural question that everyone in our sphere is going to ask is, but what about online? When are we getting online sports betting back? That is something that is still in limbo. Not quite yet. The Seminole spokesperson we contacted said, “This news is just about in-person sports betting.” Yes. We saw that. That’s why we asked. But what we see now is that you’re getting to the point where you get the clear message.


Gaming is what matters most here, right? The release said roulette, craps and sports betting, right? It was listed as an afterthought when it came to the in-person sports betting. Now, it might not necessarily be a drop in the bucket. Our Eric Ramsey, our revenue analyst, believes that you’re going to see some pretty significant betting when it comes to in-person in Florida, but we do have one industry source talking to our Mike Mazzeo who said, “Expect that the Hard Rock Bet app should launch sometime this month.” And so we’re expecting a November launch one way or another for the Hard Rock Bet app that essentially for a couple of years ago was just in Florida for the better part of a month plus before having to shut down.

Matt (17:56):

And if people are wondering why you would say, oh, they’re also offering craps and they’re also offering roulette, it’s because if you guys have never been to Florida, never been to a Florida casino, it’s card games only. So if you go to the gaming floor, it is a bunch of card games out there, but they do not have, like you just mentioned, the craps and the roulette. So getting the addition of that, obviously a big thing. I tend to agree with Eric as well, Adam, I’ve been to all of the casinos down there in Florida, one way, shape or form, whether it be there was an MMA event there, or whether it was just me going to play some poker tournament or whatever it might be. Those things are slammed all the time. I mean, those things are rocking and rolling all the time.


And so, it’s going to be much, much bigger if you have an app, an online presence, don’t get me wrong, but just to go back to thinking that there will still be decent over-the-counter stuff. There’s a lot of foot traffic in those casinos at all times. And so you have to assume just with the foot traffic that’s already there, and then what little bit it might add to it to get people to come up there and make some bets as well. I imagine it’ll do pretty decent numbers.

Adam (19:06):

I wouldn’t be surprised by that at all. And if you’re wondering why we don’t necessarily have news about Hard Rock Bet and why we would get the news that in-person could be launching even after we have word that the online might come back, keep in mind that there is now going to be a state case. There was a federal case that was governing all of this when it came to the last two years of Florida sports betting being shut down. And in that case, essentially what they ultimately said was, we can’t do anything about this at the federal level, but it might be something that you litigate at the state level.


And there was something in the Supreme Court ruling that came down most recently from Brett Kavanaugh, who is one of the nine Supreme Court justices, that set up something that our John Holden has been talking about, which has been that there could be a challenge to the Indian Gaming Regulatory Act, to IGRA, when it comes to whether gaming off of tribal lands, which, of course, is necessary to facilitate an online sports betting app where the servers are deemed to be the location of the bet. For that to be the case, then you have to have the interpretation of IGRA that would allow the belief that those bets are being placed on the server on the reservation.


So we shall see if that ultimately gets challenged, but it certainly did seem that Kavanaugh was leaving the door open for a federal challenge to IGRA in addition to whatever is going on in the state of Florida directly.

Matt (20:41):

Let’s take things home here, talking about what’s going on over in Maine.

Long-awaited launch in Maine finally arrives this week

Adam (20:45):

Well, we’re finally talking about launch in Maine. That is something that we’ve been waiting for for more than 18 months now. The state passed its sports betting law that long ago, and the rulemaking process has taken quite a long time. It has been an interesting rulemaking process because Milt Champion, the director of Maine’s Gambling Control Unit, put some interesting rules in place about restrictions on advertising, about restrictions on the use of celebrities. Ultimately, the celebrity ban stayed in place, the restrictions on how much advertising, what type of advertising were put more back to industry standards. But what you’re going to see is Caesars and DraftKings will both be in the market. It is a market that is operated through the tribes. That’s how this ultimately got passed. If you remember, we did have a commercial main sports betting bill passed a few years back that ultimately was vetoed by Governor Janet Mills, and then sports betting came back as a possibility as a larger package for tribes in the state of Maine.


So we’re looking at a launch this week, should be up and going by Friday. And if you are a Mainer, you got two more choices for sports betting than a lot of other places in the country do.

Matt (22:01):

This is absolutely the truth. And guys, everything we do, again, absolutely free. Over at legalsportsreport.com, please go in and take in all of the full articles explaining this stuff in great detail. And everything, every question you could possibly have answered in all of these articles over there from Adam and company, so please go in and do that. If you haven’t so far, take two seconds, pause this thing, go down, give us a little five-star review, and then even a quick little comment would certainly help out climbing up these charts as well, just real, real, real quick.


And now you’re back, and we appreciate that. We appreciate you guys helping us out along the way here. Adam, interesting stuff with things going on in two very major states, right? I mean states that we continue to talk about a ton. We know we won’t really start talking Texas again for a little while, so that’s at least on the back burner for now. But it is, look, we’re really all eyes on those three states as we move forward with everything, because obviously the size of California is Canada, and then you get Texas and Florida as well. I mean, these are major, major shifting moments still left to come in the gaming industry.

Adam (23:08):

I mean, look, we know that the California economy would be, on its own, one of the 10 largest in the world. We know what a prize California is, but we also understand the realities of the fact that when we saw this attempted in 2022, it’s not like it was a close loss and everyone felt like, you know what? We’ve got a shot. Let’s come right back and do this again. It was, we got our brains beaten in and we better reevaluate how this goes entirely, which is why you saw Jason Robins and Amy Howe, the CEOs of DraftKings and FanDuel, basically say, we got to take a close look at this before we ever go after it again. Not, hey, let’s willy-nilly throw another initiative out there and see what happens. So whoever is putting the money behind this, I urge you to read a little bit of Legal Sports Report content and then think about what you’re choosing to do.

Matt (23:57):

Guys, go in, legalsportsreport.com. You can follow Adam over on the Twitter machine @AdamCandee, two E’s, no Y. If you hate yourself, you can follow me @MattBrownM2. Until next week, for Adam, I’m Matt. Talk to you then.

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