Why Did ESPN Bet Offer Juicy NFL Promos? | Sports Betting News | LSR Podcast 222
The new app on the block made waves with unusually generous limits and boosts for the NFL Divisional Playoffs and the crew speculates about why. Plus, the latest California sports betting effort quietly dies, a wild story about the Iowa sports betting investigation, the official launch date arrives in North Carolina, and Nevada takes another step into the present.
Matt Brown (00:07):
Hello and welcome to episode number 222 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 Adam Candee. You can find him over on the Twitter machine @AdamCandee, two E’s, no Y. If you want to follow me because you hate yourself, @MattBrownM2. Apple, Spotify, Google, all the places that you get your podcast, absolutely free, so please go in, subscribe, rate review. Everything is absolutely free. So we do appreciate your support there. We will hit what’s going on over in California as well as North Carolina. We will talk some Iowa stuff, as well. But let’s kick things off here, Adam, with the news du jour so far of the last few days, which is a promo over at ESPN Bet that raised a lot of eyebrows.
The new app on the block made waves
Adam Candee (00:54):
I’m not going to talk a lot about this. I’m going to kick it back to you because I know you’ve been in the middle of this too. But the long and short of what we’re talking about here is ESPN Bet having some boosted odds, and more importantly than the boosted odds, some alt lines available, and maybe more important than all of it, no real cap, apparently on how much you could bet on the Ravens and Texans game. That’s where this became a real issue. And there were a lot of questions about why is ESPN offering these options and Penn Entertainment behind the ESPN Bet logo. Why have they moved and offered a Ravens 10.5 number that is super juicy at the price? Why is it boosted as much as it is? Why has it moved the way it has? I’m going to stop there and let you get into this a little bit more because there are a lot of questions out there about what the strategy was here, and I’m still not 100% convinced there was a strategy, but I’m going to leave that to you first.
Matt Brown (02:03):
Yeah. I don’t want to speculate either on it all. I’m sure you’ve read all of the rumors and stuff that I have and all of the people guessing that, “OK, was this a promotional stunt? Was this whatever? Was this them trying to get off of a position?” There’s all kinds of different stuff. None of it being confirmed, so I don’t know. I don’t really get it. But at the very least, odds boost, as we know, we talked about in a ton here on the podcast, so nothing new. There’s odds boosts all the time, but typically, these odds boosts, even the most juicy of odds boosts, maybe they’ll let you get down a couple of hundred bucks. Most of them are capped at 100 or 50 bucks. And if they’re super, super odds boosts, they might let you get down to $25, and it’s more of just a fun type deal because they’re giving you a massive, massive edge on what the actual bet should be.
So they’re like, “OK, whatever. We’ll let you put 25 bucks down.” If we’re to believe what the reporting is … And again, you and I don’t live in an ESPN Bet state, so we were not able to check this out ourselves and all. It’s like, that seven figures were able to have been bet on these bets. And again, this is all reporting. I do not have anyone that, firsthand, was able to take advantage of this. I don’t know. But the reporting seems as if there were seven figures that were able to be put on these bets. And what was happening is the odds boosts were so high that you were able to create an arbitrage situation. And if you’re not quite sure what that is, it’s basically you can bet both sides of a bet and guarantee a profit. There’s no way to lose money on a bet because of the way that the odds are set up.
And so that was the case in this. And so there were a lot of people who were going out. They were betting this, and then heading to other sportsbooks and heading to betting exchanges and heading to all of that and making sure that they got down a bunch of money on the other side of the bet, and basically locking in lots of profiting given the number that ESPN apparently was allowing you to bet. Adam, I know arbors. You’ve heard of arbors before. Look, they’re grinders, and you got to grind. And listen, it can be profitable, but typically, you’re grinding out 100 bucks, 150 bucks, 500 bucks. You can hit 400, 300 here and there. These people were able to make thousands and thousands and thousands of dollars with these arbitrage opportunities, given the amount of bet, given the amount of money that you were able to bet on all these.
So this was a once-in-a-lifetime type situation for these guys that knew what they were doing and going in and taking advantage of all of this. And so it was odd, and as you mentioned, we don’t really know the reason behind it. There’s been nothing said yet officially. No spokesperson has come out and said, “This is why we did this” or anything, but I’m with you. I don’t know if there was a strategy. It seems to me, maybe a decision was made without really fully thinking it through. And then you get what we have here, which is a bunch of people that were able to make a whole bunch of money for free.
Adam Candee (05:00):
And most people have heard it called an arb. It’s been referred to as a scalp. It’s referred to as synthetic hold. There are ways to create these two-sided markets in which you have no way to lose. And, Matt, you just hit the nail on the head. It’s the size of the arb that was available here that is just remarkable if you had the bankroll to be able to accomplish it. And that in particular feeds into one of the most important points when we start doing the detective work as to why this existed. Because those who say it was a promotional play, here’s the problem with that. If it’s a promotional play, you are not trying to bring in the type of bettor who is going to be able to scalp you for 3, 4, or $5,000 at a time.
Matt Brown (05:48):
That’s why I can’t get there, right? It’s like the person who even knows how valuable that bet was is already betting. Yeah. It doesn’t, to me, seem like that resonates to the casual bettor.
Adam Candee (06:05):
No. And so I don’t think you’re doing some sort of galaxy brain thing looking for the coverage that comes out of this two days later. You want people on your app at the time of the bet. That’s why the bet, in theory, is there. And I want to give credit, by the way, fully, I think Adam Levitan from Establish the Run, who laid out a pretty good set of circumstances here on all of the different possibilities. I just think the one possibility that was left out is that someone didn’t fully think through not capping the boost.
And I don’t think it’s impossible. I’m not saying anybody was stupid or dumb or didn’t do their job, but it seems pretty egregious that we’re talking about a boost on either a moneyline or a boost on a point spread because that’s typically not where we’ve seen a lot of these. Modern odds boosts that we see tend to be … this three-leg parlay is boosted from +500 to +600. That’s more of what tends to be out there, not these interesting synthetic hold markets. And what I’m talking about, like Ravens 10.5, +140.
That’s not so far off market that you need to offer +140 to come get it. And I think Jeff Benson from Circa laid out that case essentially and said, “Look, it’s not crazy, but the price is.” And you don’t need to necessarily do that. And I think when we talk about the regulated market in particular, Matt, there is a real question about whether this is signal or noise because what has been the biggest criticism of the regulated market from the sports betting Twitterati? “No one will take a bet. We can’t get any money down.” Well, you sure could this weekend.
Matt Brown (08:01):
And listen, just present all sides here. That is another side of this that I’ve heard, which is if it was some sort of promotional thing, and like we just said, it certainly wasn’t geared towards the casual bettor, that it was some sort of basically promotional deal that was actually geared towards the high-volume bettors and the bigger bettors because they had been run out of what was formerly Barstool. We heard about all the limits, and we heard about all of the stuff that was going on over there. And then maybe this was like, “Hey, look. Now that we’re not this anymore, we’re taking bigger bets.” I don’t necessarily get there either. Again, I don’t really get there either. I heard that as being floated around. And I’m like, “You know, that’s something that can be done with a simple email. I don’t think you really have to do that.” It’s like, if you’re catering to big bettors, be like, “Hey, by the way-”
Adam Candee (08:53):
That’s a VIP-host thing.
Matt Brown (08:54):
Yeah. It’s like, “Hey, we’re taking six-figure bets again.” Whatever. It’s like, “Sorry that things went south the first time. We’d like to welcome you back. Hey, we’re taking six-figure bets again.” So yeah, that’s a more personal type thing than this. So I get it. Everyone’s trying to figure things out, and so I’m not faulting anybody for floating theories or whatever because, the hell, that’s what we do. And until we actually figure out what the true logic and reasoning behind it is, there’s going to be more of them. But yeah, that was one that went around where I was like, “Yeah, I see where you’re going with all that, but that also doesn’t really add up at the end of the day.”
Adam Candee (09:32):
No, I feel like we’re at the point where we’re talking about Drew Brees getting hit by lightning here in terms of how deep down the hole we are trying to figure out what actually is going on. We don’t know. To your point, Matt, I think a VIP host is probably a better way to communicate, “We’re taking limits than we used to be, different than we used to be.”
And I think also, you could probably get that done if you want that kind of publicity, you could probably get one of your casino whales and let them get that kind of money down and get that kind of publicity if that’s what you want, and not get this type of action from very sharp bettors. Because the flip side to what you just said is, if you throw the doors open and say, “We’re going to take these kind of bets,” and next week you don’t, and next week the limits come back down, you have lost all the value of this in the first place. If you then come back and someone gets cut to being able to bet 500 a side, then what was the point?
Matt Brown (10:31):
Yeah, it’s super interesting. I’m assuming, at some point, we’ll figure it out. I figure somebody will say something about whatever. But until that happens, it is interesting. Certainly, some stuff that a lot of people in the bubble, and this is one of those in-the-bubble things, which is also why I don’t look at it as more of a promotional type of deal because no casual bettor even knew about it. It’s more of everybody who would notice, “Oh, what an advantage that is.” And those aren’t the guys that you’re getting signed up on your side over there.
Latest California sports betting effort quietly dies
So I can’t wait to get the actual, real story when it’s all said and done. All right, guys. So it’s going to be a topic here on this pod until something ever does get done. But what is going to happen over in California? We know that this is an ongoing saga over there, which we think will eventually end with somebody caving to every single demand that the tribes put out there. But until that day comes, Adam, we’re going to have to continue to report on things like what’s over to LSR right now.
Adam Candee (11:35):
Remember the old Saturday Night Live skit, Bad Idea Jeans?
Matt Brown (11:39):
Yes. Oh, yes, yes, yes, yes.
Adam Candee (11:41):
Yeah, yeah. I feel like the idea of doing a ballot initiative in 2024, after the ballot initiatives in 2022 got less than 18%, was cooked up on the basketball court wearing Bad Idea Jeans with Kevin Nealon and David Spade. This did not ever seem like an idea that had serious legs, and the news out this week is that Kasey Thompson, Reeve Collins, the ones who were behind what was to be a multimillion-dollar signature-gathering effort to get sports betting on the ballot in California this year, have dropped it. And their quote to our Mike Mazzeo from Kasey Thompson was to say, “We said all along that if the tribes weren’t going to be behind this, that we weren’t going to go forward with it.” Well, we saw the main tribal gaming group vote next to unanimously against it.
They were only able to get, who are the proponents, a handful of small tribes on their side and none of the major gaming tribes. And I feel like the last big blow is something we talked about on this podcast, which is when FanDuel, DraftKings, et al, came out and said, “Yeah, we’re not behind this either.” We’re like, “We don’t want this. We’re lined up with the tribes.” And at that point, it seemed like the game was pretty much over. So the quotes to me about, “We feel like we advanced some good ideas, and we were never going to do this without the tribes,” well, they just don’t square up with, “Why didn’t you talk to them about this in the first place?”
And so in the end, it feels like a lot of sound and fury signifying nothing. What it means is that 2026 again becomes the first time that you might see something, anything happen. And if you believe what you’re hearing out of tribal interests, it’s going to start with some sort of in-person sports betting, and that might not be ’26. That might be ’28, but what the tribes have made clear in both defeating the ballot measure in ’22, in keeping this one from ever getting in ’24, frankly going back to 2020 and defeating it at the Legislature, is that it’s going to get done their way one way or the other if it ever truly gets done.
Matt Brown (13:48):
It is, listen, of utmost importance for the industry, though, that eventually something would get done. Adam, we talk about it’s a low-margin business is sports betting. However, in enough volume, there’s money to be made, and we know there’s a lot of people in California. There’s a lot of people in Texas. The reason why we continue to talk about these states, it seems like, ad nauseum here on this podcast is because, at this point, it’s just volume that’s needed. You need the liquidity, you need more people in the market for this to continue to uptick, and for these companies to realize any sort of potential ceiling down the line. And so this is why we continue to beat everyone over the head with every single California news, every single bit of Texas news, will it ever open up in Florida, all these different things like that because, again, these are three of the most populous states in this country, and it actually does matter to the bottom line quite a bit.
Adam Candee (14:47):
And I think that’s why it’s also vital that we keep a very close eye on the pending attorney general opinion on daily fantasy sports and pick’em games that is pending in California right now, because that is the other major angle that comes out of this whole discussion is that as long as the controversial pick’em games are allowed in California and Texas … in particular, Florida, they have received cease-and-desist orders but have not gone along with those yet. But we are now seeing that those markets are going to become even more vital when it comes to that pick’em question, as long as it’s going to take minimum ’26, if not ’28, in California, and at the very earliest, ’25 in Texas.
Wild story about the Iowa sports betting investigation
Matt Brown (15:32):
If you head on over to legalsportsreport.com, hopefully you’ve read this a little bit already, and then Adam can just give you his thoughts on this. But if you have not dug into what went on in Iowa, I highly recommend going in and reading the words on this one. But Adam, let’s go ahead and give them the story of what went on there in Iowa.
Adam Candee (15:49):
I’m going to not get too deep into the weeds on this because I guarantee I will screw up a detail because it is so in depth, but it is also so insane, this entire story about what happened with the investigation into some Iowa State student athletes. And let me be very clear, what allegedly happened according to not only the attorney for a couple of these student athletes, but, and this is the wild part, according to one of the agents from the state regulator that is charged with investigating these issues, who testified that one of his fellow agents, in particular, was doing some things wrong, and then also a number of others kind of tricked him into doing something that he did not believe was right. The long and short is, that there’s an allegation of illegal warrantless search being done on these student athletes, that essentially a state agent from the gambling regulator was setting up these geo-perimeters in areas where the student athletes were to try to catch them without a warrant.
I’m not going to get deeper into it than that. The long and short of this is that we have had questions about this Iowa situation from the jump where we’ve said, “Why in particular are we getting all of these stories about Iowa and Iowa State student athletes who have been busted for illegal gambling, who’ve pleaded down to lesser charges, et cetera, et cetera? Why is it Iowa in particular where we’re getting all of this?” Well, if most of this is true, that’s why we’re getting more out of Iowa than in other places because the depth to which this search was happening, potentially illegally so, is patently nuts. The idea that there would be a rogue state-level agent who decided that he was going to become the ultimate spy in exposing what was going on with sports betting with certain Iowa and Iowa State student athletes just blows my mind.
Matt Brown (17:58):
Yeah. You got to go in and read the article guide to the point where one of the people working on the case asked to be moved off of the case because he felt uncomfortable with the way that things were going. So it is a really, really wild story in that. And again, the full details, everything over at legalsportsreport.com. Let’s leave here on a happy note, Adam. Listen, we’ve been talking about North Carolina for quite a hot minute here on the old podcast. So let’s give some people over there in the Tar Heel State something to be happy about.
Official launch date arrives in North Carolina
Adam Candee (18:28):
We’ve been telling you and telling you and telling you and telling you that online sports betting was coming to the state of North Carolina. We had the vague assurance that even though they were not able to get it launched by NFL season, that it would be before March Madness that legal online sports betting apps would be available in California. We got the date today. And we’re recording this on Wednesday. The date will be March 11th. Preregistration can begin as soon as March 1st, and we now have all of the seven applicants for legal sports betting who wanted to be on the starting line for day one. They all have partnerships now. So those partnerships were necessitated by a change in the law that came about in September. The weird change that we say nobody has been able to claim ownership of from changing a settled law to require these partnerships with professional sports organizations.
Regardless, those are now done. And so those applicants are now going through the background check process. It is mostly de rigueur when it comes to these sorts of things. It should be taken care of. Those should be ready to go on March 11th. If you’re not going to get in by the beginning of NFL season, if you’re then not going to be able to get in before the NFL playoffs and the Super Bowl, the next biggest acquisition opportunity on the calendar is March Madness. You and I know from Las Vegas, it is the single most bet event in all of the entire world sports calendar in non-World Cup years. You will hear all about how, over the first weekend all the way to the Final Four, draws well more than the Super Bowl.
Matt Brown (20:07):
Yes, absolutely. The article over … does reveal it is Bet365, BetMGM, DraftKings, ESPN Bet, Fanatics, FanDuel, and, Adam, Underdog, who has secured … And we knew this all along. This was always the difference between Underdog and PrizePicks. The difference between Underdog and PrizePicks is Underdog never made their intentions ambiguous at all. It was like, “No, we want to be a sportsbook. We want to be a sportsbook operator.”
You and I have traded texts over the last year or so because headhunters will send me, “Hey, here’s a job opportunity,” whatever, all the time. And it’s like, I’ve gotten several for Underdog. So we knew for a long time on the back end that they were building out a sportsbook and that that was the ultimate goal for the brand. And so we see here, at least in North Carolina, Bet365, they continue their expansion and push here in the states. MGM, as you would imagine, DraftKings, FanDuel, as you would imagine, ESPN Bet, Fanatics, but Underdog’s securing that partnership in North Carolina.
Adam Candee (21:13):
And important to note that Caesars already had its partnership established through the Harrah’s casinos. There’s been in-person tribal sports betting at a couple of remote locations for a couple of years now. About Underdog, what’s interesting is that, remember that North Carolina, initially, about a month ago, said that it was going to ban the controversial pick’em games from PrizePicks and Underdog. These are of course separate from the sports betting license and got some pushback from those companies, and ultimately decided, “You know what? We’ve got enough to figure out before we get this thing launched. We’re just going to remove the prohibition for now, and we will come back to this later.” And so what’s really interesting to me about Underdog being at the starting line when it comes to sports betting is we’re now going to get a real look at what the Underdog sports betting product looks like.
And I think the question that everybody who has been involved with this industry through the course of 2023 is going to say is, “How different does it look than the pick’em game?” Right?
Matt Brown (22:11):
Adam Candee (22:12):
When they’re offering props, are they distinguishing what is what? There are a lot of very smart people involved with this company. I’m sure that there’s going to be clear lines that can be drawn when it comes to the two products. I just feel like when we talk about this state in particular, you’ve got multiple things to watch for when it comes to that particular company that I think will give you clues about what is to come in 2024 for PrizePicks, Underdog, and similar DFS companies trying to make it in the pick’em space.
Nevada takes another step into the present
Matt Brown (22:43):
And something that only matters to me … Actually, not. It is news, and we talk about the news here in the sports betting world. Adam, I’m going to hold up to the camera, and those are you who are not watching-
Adam Candee (22:56):
Here it comes. I know what’s coming.
Matt Brown (22:56):
… at home.
Adam Candee (22:57):
Haven’t even seen it yet. I know what’s coming there it is.
Matt Brown (23:00):
That right there, that is as of today. Nevada does have the rest-of-country MGM app now. So we saw this happen with Caesars already. So Caesars got rid of their trash app and went with their rest-of-country app for Nevada. And then now, we’ve seen BetMGM get rid of their trash app and have now gone to their rest-of-country app with Nevada as well. And one of the things that you and I have talked about is, one, it offers more stuff, so they’re going to get more action on it as it is anyway, because they just have a much bigger menu. But also now, and this is just from a business aspect, Adam, this is like, “Hey, someone from Arizona can come to Nevada now, and they don’t have to download a separate app and fund a different app and all of the things that are going on there.” It is one app with one wallet wherever you go in the United States. And from a business standpoint, that makes a lot of sense, as opposed to people having to get a different app when they visit Nevada.
Adam Candee (24:00):
Matt, I wonder why, on January 24th, with the Super Bowl being in Las Vegas on February 11th, that might be the case. Why is that do you think, that it dropped right now? Is MGM like everyone else with a legacy casino in Las Vegas expecting a lot of people from other states with sports betting apps to be showing up to their town sometime soon? I think they are. And so we saw what happened with Caesars/William Hill last year with the crash at Super Bowl time, and that obviously could not happen again. So that got migrated over in Nevada and everywhere else. And we’ve been hearing rumors that this BetMGM move was going to happen for months and months now, and deadlines spur action. And with the Super Bowl coming up, you’re going to have people showing up with their Caesars app and with their MGM app from the rest of the country.
And keep in mind, this is a particularly big opportunity for Caesars and MGM with whoever’s going to be in town for the Super Bowl in Las Vegas because you can’t get anything down on DraftKings or FanDuel on the apps when it comes to being in Nevada. There is the in-person FanDuel sportsbook downtown, not the same as what we’re used to seeing with FanDuel rest-of-country. So for those two companies in particular who are going to have such a huge presence on the strip and around the actual Super Bowl game at Allegiant Stadium, this is a major opportunity when it comes to showing themselves off to those who will not be able to bet on DraftKings or FanDuel.
Matt Brown (25:34):
Absolutely. And it’s not only the people, like you said, that typically just use DraftKings or FanDuel that will be able to use Caesars and MGM, but also the people who already use Caesars and MGM will not have to download a separate app, fund a separate account, and they will have the familiarity of using the app that they use whenever they’re at home. It’s a good move all around. And so that now puts Nevada up to three actual rest-of-country functionality apps. Weirdly enough, Stations, new app. Stations Casinos has moved into the next gen stuff, so same deal, same-game parlays, the instant updated live betting, all the different things like that, and it’s crazy.
I know that you rest-of-country people out there listening to this are going, “What are you talking about? That’s like every single app.” No, it is not. Trust me, it has not been. And so finally, the Stone Age is starting to go away here in Nevada. Adam and I know something you lived through for several, several years, something that I beat my head against the wall about, but we do. There is Caesars now. Now there’s MGM. Stations has moved over to that. We’ll see if anybody else steps up to the plate.
Adam Candee (26:42):
Yeah. And I do want to give at least a small bouquet of flowers to Boyd for having a large prop menu-
Matt Brown (26:48):
Adam Candee (26:48):
… long before anybody else did in Las Vegas. The app still, for a lot of the time that I was using it, looked like Atari, but it’s at least available.
Matt Brown (26:59):
True. Very true. So interesting stuff, though, here that MGM did move that over to Nevada as well. Guys, like I said, can’t recommend enough heading over to LSR and just reading that article on Iowa. It really is wild, and it’s something that you really need to read for yourself to go, “Wow, you kidding me? That’s interesting.”
The words are going to be more powerful than what we’re going to be able to do on this podcast, that’s for sure. If you haven’t already, we do appreciate any subscriptions, any reviews, any ratings, all of that. We do love the five-star stuff because it is absolutely free, everything we do here on this pod. So for Adam, I’m Matt. Talk to you guys next week.