EPISODE 225 | LSR Podcast

An Apple A Day, But First A Parlay? | Sports Betting News


28 min
Video preview

An Apple A Day, But First A Parlay? | Sports Betting News | LSR Podcast 225

Apple launches a native sports app on its devices featuring odds integration from DraftKings, so what does it mean for the global sports betting industry? Also, Florida and New York take major action on fantasy sports pick’em games and Nevada does better than you think it did on Super Bowl betting with the big game played in Las Vegas.

Full transcript

Matt Brown (00:09):

Hello and welcome to episode number 225 of the LSR podcast. My name is Matt Brown. I’m 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 on the Twitter machine @AdamCandee. That is two E’s, no Y. If you hate yourself, you can follow me @MattBrownM2. Of course, everything we do, absolutely free. So go ahead, hit that subscribe button, give us a little thumbs up, do a little rate/review. All the different ways that you go about doing all that, I do appreciate the support a ton.


Adam, we are post Super Bowl, so we will talk a little bit about some numbers that came out of Nevada and some of the opinions that are going on out there, some new DFS news happening, too. But let’s go to something that is fairly interesting because a lot of people have iPhones.

Adam Candee (00:57):

They do. In fact, you and I are two of them.

Matt Brown (01:00):


Apple launches a native sports app

Adam Candee (01:01):

We know that the Apple integrations tend to be the first touch points for a lot of people with various things, whether it be weather, whether it be news, and now sports. Apple Sports app launches today. Live scores, the ability to stream certain games if you have the appropriate subscriptions, which of course is natural for Apple considering it has rights to Major League Soccer and a little bit of Major League Baseball as well. For our purposes, the most interesting part of this is that there are betting odds integrated into this Apple Sports app, widely reported as DraftKings, that has this deal with Apple.


Now, important to note that Apple has right in the press release a footnote that says, “Betting odds can be turned off in your settings at any time.” I think that that gets to the first greater point that I want to talk about with this, which is that I’ve seen some rush to judgment to say, “Oh my God, that’s it. DraftKings has it cornered. They’re on everybody’s iPhone.” And yes, obviously. Having touchpoint number one is no small deal. It’s also important to keep in mind that the universe of people who are interested in betting is a fraction, and a tiny one therein, of the people who are going to be using iPhones and the people who are going to be using the Apple Sports app. So just slow the roll slightly on the idea of what it ultimately means for the broader sports betting market when we talk about this.


That being said, it’s clearly a very interesting deal, Matt. Because Apple, Yahoo — in the day, I guess — but Amazon and Google, these major, major companies that are a lot of people’s first stops when it comes to places on the internet, that is something that has been a bit of a holy grail for these sports betting companies to be able to access directly. And so DraftKings we know has been interested in finding ways to acquire customers that requires less spend. Now, we don’t know exactly how much they’re spending on this Apple sports deal, but we do know that they also just recently acquired Jackpocket, an online lottery retailer, for $750 million, and that appears to be a customer acquisition play for being able to get some iGaming customers down the line, especially with the entry point that Jackpocket has in New York if iGaming ever happens there.


So really interesting if you take the macro view here of what one sportsbook in particular is doing in terms of ways that it goes about acquiring customers, because we’re seeing a bit of a shift in how things have been done traditionally.

Matt Brown (03:50):

Yeah, like you said, I think it’s easy for all of us in the bubble to sit and look and see something and just be like, “Oh my God,” make it way bigger than it actually is. Like I said, it’s a big deal. There’s no doubt about it. Because like you mentioned, most people, you and I are probably a little bit different than a lot of people. I still will go to the tried and trues of what I grew up on, and that’s not the majority of people out there. And yes, they will just take their iPhone, flip it on, and if it’s sports, they’ll just hit the sports tab. Certainly, getting that exposure regardless, right? I mean, you and I talk about this a ton, as to what is that next wave of how do they either retain customers or basically get customers reengaged or anything like that.


Listen, there’s a reason why we still see McDonald’s commercials and the reason why we still see Coca-Cola commercials. You don’t have to tell people that McDonald’s and Coke, it’s just beating people over the head with it over and over and over again, which they understand actually works. It can be the same thing here with this Apple thing, where is that a huge coup for today? Who knows? We’ll see, we’ll see how it goes. But beating people over the head with something over and over and over again for a long period of time, as we know — again, you can see it with a legacy brands that are out there — it’s obviously a strategy that works. We don’t need to see McDonald’s commercials, we don’t need to see Coke commercials, we don’t need to see whatever. But they understand that it’s the more you see it, the more you see it, the more you see it, the more you see it, the better it is for them.

Adam Candee (05:22):

Ubiquity is not the same as the perception of ubiquity, but you can only create one of the two, and when you do things like what you’re talking about right now, you are creating the perception of the idea that this is the sportsbook when it shows up in front of people as widely and broadly as that. So even if it’s just an exposure play for DraftKings, there’s a lot of value involved in that. So lots of different ways to be able to break down this deal.


Now, we know that there’s not live betting with this directly at the moment. That could come down the line. There could be an integration to where it’s essentially just a one-touch or a two-touch sort of thing to be able to place and should be able to place bets via the odds on the Apple Sports app. That’s not the case right now. That could be the case down the line. But as you mentioned, Matt, there’s something to the idea of brand recognition when it comes to customer retention. Duh, I’m not breaking any news when it comes to that. But we are seeing where we’re at the point now where with the duopoly that we’ve seen with DraftKings and FanDuel, it’s not just about acquisition, it is about retention. And in some cases, it’s going to be about picking off customers from other pieces of the market. Right? From smaller operators who are not maybe making the same impact.


It could be as simple as you want to do something like this at a time when Fanatics and ESPN and 365 have made major pushes to try to acquire customers, and maybe people have played through their bonuses and it’s time to come home. We’ve heard both the CEOs of FanDuel and DraftKings talk about that sort of thing in the past. So the longer game here is fascinating, of course. We talk a lot about market share. We talk a lot about getting people in the door. We talk a lot less about keeping people inside your walls once they’re there. And again, as we enter year six of the legal US sports betting industry, we’re going to be talking more and more about the idea of whether customers are staying loyal versus whether customers are going somewhere else and then staying somewhere else.

Florida and New York take major action on fantasy sports pick’em games

Matt Brown (07:34):

Adam, we talk a lot about the DFS, and I say it with the air quote out there, the kind of “pick’em game DFS” stuff that is going on. I think a lot of people think like, “Dude, you guys are obsessed.” Well, no, news stories continue to pop up. And listen, when the American Gaming Association goes and they say something to the entire industry, which a state of the industry address that happened this past Tuesday, and they actually speak out about this, it is a news story, and so it is incumbent upon us to report on these things. It is not our role to make those determinations, but we continue to encourage regulators to be vigilant, to ensure DFS products don’t cross the line into sports betting. Now, this is the senior vice president of government relations for the AGA. “It’s been encouraging to see regulators in almost a dozen states look at this issue and determine that actions are warranted to protect the integrity of their marketplaces.”


Adam, at the end of the day, some of this stuff like, yeah, you and I are a little bit on the side of, look, just call a spade a spade, and then maybe we can at least come around to your side at least a little bit more and talk to you about these things. But the other thing that is a real issue, we’ve already seen it happen a couple of different times, and anyone that has lived through the internet gaming era, and that’s starting way back in online poker, going into regular DFS and things like that. The reason that we look at this stuff is you go in, you get licensed to become a sportsbook. There’s a barrier to entry. You have to pay a fee upfront, you have to do all that. A lot of that isn’t necessarily even for the fact of like, oh, we’re going to make the state rich or whatever. Some of these fees are $500K, some of these fees are $200K, whatever it might be. It’s to make sure that you have enough money to operate as a company and that you are a legitimate company, and you don’t become insolvent, and you don’t leave players hanging, and all the different stuff like that.


And so it’s not only the AGA saying like, “Ah, let’s look at how these games are structured,” But it’s also, again, they talk about the integrity and all of that of what’s going on. Because as consumers, you and I, if I put my deposit in at a site and I go and hit withdraw, I want to know with some level of certainty that I’m going to be able to withdraw the funds that I put on this. We’ve actually seen a couple of these sites kind of go away, poof in the middle of the night, “Oh, money’s gone,” type stuff. And all of that plays into why we continue to talk about this.

Adam Candee (10:01):

Yeah, I think you laid out a pretty good justification for why we’re so vigilant on this story, because this is probably the biggest talker within the broader sports betting and DFS industry right now. It’s the story that everyone is discussing, not just because we’re somehow pushing the agenda. There’s just a lot of activity when it comes to regulators and when it comes to what people are discussing at industry conferences and so on. When it comes to, and again, you said with the air quotes, I’ll use the word that the AGA used in its address, faux as in F-A-U-X, faux daily fantasy sports was the reference that the AGA made to companies like PrizePicks, Underdog, Betr, and essentially to the pick’em games that mirror player props.


The point in all of this is that when we discuss these stories, what we are discussing is a factual recitation of what state regulators are discussing. That’s it. We are talking about the letters that are going out from state regulators — which happened very recently, by the way, since we last talked to you over the last couple of weeks — in Kansas, in Arkansas, in Florida, and now we are seeing further action being prepared in Massachusetts. In New York, we saw PrizePicks fined $15 million and ultimately ceasing operations in the state.


This is a broad, broad issue at the moment. What we are seeing quite interestingly is that the week after the Super Bowl is when we saw a lot of these enforcement actions come around. Matt, it’s not a coincidence by any stretch of the imagination that that’s when it happened and that we have not seen the same level of pushback from the fantasy sports operators the week after football season that we saw during football season, because that is obviously the number one acquisition and revenue opportunity for them is during football season.


So you talk about the importance of the story. It is February 21st when we record this. By the time next February 21st gets here, I guarantee you we’re going to be having more discussion about bans, about rule changes, about court cases, et cetera, et cetera. Because the way we’ve seen this trend, the online sports betting operators — and again DraftKings, FanDuel, some others — are part of the American Gaming Association. It’s been clear that they see this as competition that is not on the same footing, as you mentioned, as what they are dealing with; that these companies are either operating in states where sports betting is not available and not under any regulation, or they’re offering what appear to be competing products in certain states that do have sports betting legalized. Those regulators are now taking a much closer look at what the competing products looks like and saying, “You are offering, in some cases, illegal gambling; in some cases, things that mirror gambling.” Whatever the case might be, we’ve seen a great number of state regulators say that the pick’em product too closely mirrors sports betting and needs to be adjusted.


Now, some states have done that, right? To go back, Colorado came to an agreement with the fantasy sports operators and said, “Fine, we can do pick’em, but it can’t be two or more, it has to be four or more. If it’s going to be four or more, it has to be based only on the fantasy points that these players score versus the traditional stats that are used in props.”


So we are not saying that there’s not a place. Clearly, there can be a place. If the rules change, there can be a place within those rules. Even under current rules like in Colorado, there can be a place, but what is happening right now is that we are seeing more and more of state regulators having questions about the viability of these products under current laws and regulations.

Matt Brown (14:07):

This isn’t to say … Look, the market leaders, I am fairly confident in the fact that … And that’s from the legal standpoint. From the consumer standpoint, the stuff that I mentioned earlier. Look, the market leaders, there’s no reason for me to believe that PrizePicks and Underdog don’t have a ton of money. I imagine that they do, and there’s nothing that you and I would be materially concerned about from a consumer perspective of like, “Oh, I put in my 500 bucks, I’m trying to withdraw my 500 bucks, and it’s not there anymore.”


But we have seen some of these sites be fly by night, come and go. And the thing is, is when there’s not proper vetting in place for all of these, when they’re operating in this weird area. Is it sports betting? Is it DFS? Are they in gray markets where there’s no DFS laws? It is anyway, and all of that. That’s when we really opened the door for bad things to happen. We’ve had a couple of stories about those already, of sites having to fold and go under and what’s going on? How did this happen in the first place? It’s just because it’s easy. I don’t want to call them scams or a scheme or whatever.


But, Adam, it’s easy to get something started and realize you don’t know how to run it, and the next thing you know, you don’t have any money left. Sometimes these things aren’t necessarily real businesses; they’re just ideas that get thrown together by people who are good at building an app and can put some ads on Facebook and Instagram and TikTok and this, that and the other. You get enough mass to have a little run at it for a little while, and then the next thing you know look up and you’re like, “Oh, darn, all the money in the account is gone.” And so there’s not only the legal aspect to all this, but there is a consumer aspect to all this as well, which is why there just needs to be some clarification. All we’re asking for, literally, is just clarification in all of this.

Adam Candee (15:56):

If you’re wondering to the point of what Matt is talking about, go check out Mike Mazzeo’s reporting on No House Advantage at Legal Sports Report. One of these smaller operators that disappeared sort of in the middle of the night, and people were not able to get their money back. They’re not the only ones; they just happen to be the ones that we’ve reported on most extensively at LSR.


And, Matt, it goes back to the same thing we’ve talked about. Whether we’re talking about online sports betting, whether we’re talking about fantasy sports, if we’re going to talk about consumer protections, I can tell you about a podcast that I listen to regularly where you’ve got a couple of guys who bet not only in the legal market but still bet offshore, and they’re talking extensively about how they have to think about how and when they bet offshore based on the timing of the price of Bitcoin. That is not a consumer-protected element. We know the volatility of Bitcoin as a currency. If you’re going to go and bet offshore, not only are you risking the fact that, like you said, Matt, it is the laws and regulations of another country that you are not protected under here in the United States, but most of the offshores are now paying you out in a currency that is not stable like the US dollar. So you have other concerns to think about as well, no matter what kind of gambling or game of skill, chance, whatever you choose to engage in online.

Nevada does better than you think on Super Bowl betting

Matt Brown (17:26):

Adam, the Super Bowl has come and gone. We’ll put a bow on this episode talking about the great state of Nevada where the Super Bowl was held for the first time in Las Vegas. The handle did set an all-time record, $185.6 million in bets, and that broke the 179.8 that was set in 2022. So you see about a $6 million difference in handle from 2022 to 2024.


I’d like to get your opinion on this, because some of the commentary I saw coming out on all of this was, I thought, pretty off base; where people were kind of disappointed in the fact that it was only a $6 million increase, and that if the game was going to be in Nevada, specifically in Las Vegas, that it should have just demolished all of the numbers and whatever.


OK. I mean, first and foremost, I think that any uptick is a win in all of this. We have talked ad nauseum here on this podcast, Adam, about what a pain in the ass it is to sign up and fund and withdraw at sportsbooks in Nevada. And then if you’re not doing that, then it’s having to do it over the counter, which as we know on a weekend like Super Bowl, can be a pretty big deal as well because the lines are so ridiculous and all the stuff that goes on with all of that. I’m just curious as to your thought here that, “Oh, it was underwhelming that they only set the record by $6 million,” because I have my own thoughts here.

Adam Candee (18:58):

Matt, has Las Vegas ever had trouble filling its rooms for the Super Bowl?

Matt Brown (19:04):

Yes, thank you. I’m glad this is where you’re going with this, because me and you, me and you, Adam, see, we’re right here. We’re right here on this.

Adam Candee (19:11):

Simpatico, my friend. Simpatico. Las Vegas has never had trouble filling its rooms for the Super Bowl. Las Vegas has always been a major destination for the Super Bowl. We’ve had a lot of discussion both on and off this podcast about who comes to Las Vegas for the Super Bowl, depending upon whether the game is there or not. We have the first example this year of people showing up for the Super Bowl when it’s in Las Vegas. As you mentioned, there are many, many friction points to being able to wager in Las Vegas. You sent me one article in which one reporter was contending that certain whales who have shown up in the past didn’t want to show up for the Super Bowl. You want to go with that one? Do you want to go with that one?

Matt Brown (19:59):

I know. It’s like, what are we doing here?

Adam Candee (20:04):

What are we doing here?

Matt Brown (20:05):

Yeah, I know. I’m glad you brought this up. This is the point that I was trying to explain to people, and I think that there’s a lot of people who just assume that, “Oh, the game’s in town. It should shoot up your sports betting handle.” I don’t think the game being in town materially affects the betting environment in Nevada, and if anything, I think we could make a pretty compelling argument on here that it might negatively affect the betting environment in Nevada. Because now, there are thousands of hotel rooms that are now being taken up by people who are coming to town, not for fun, not to play, not to take in the games and gamble and eat and whatever else that is, because they’re here to work, right? It’s like they work for the NFL, they work for CBS, they work for all the other media outlets, they work for all the sponsors, all the company. All of those people have to come into town, and they have to be here and they’re taking up room.


But Adam, that doesn’t necessarily mean that they’re gambling. That doesn’t mean that they’re betting on the game. They’re literally going to work every single day that they’re here in town. And so they’re taking up space, but they’re not necessarily here for the reasons that the people who typically come into town are here. And so that’s why I think any uptick with the game being in town should be looked at as success, and I don’t care if it is only $6 million.

Adam Candee (21:19):

I’ll take it a step farther than you. Not only are some of those people here to work, some of those people literally cannot bet. They would lose their job if they were to bet. We just heard Roger Goodell in his state of the league address talk about more than two dozen employees ultimately having lost their jobs over gambling since the NFL became a partner of seven different sportsbooks. We’re talking about people being in Las Vegas who are taking up strip hotel rooms who cannot bet on the game. Pretty straightforward.


So I think we could also talk about what we expect for the rest of the country based on what we’ve seen out of Nevada, because we saw that the hold was around 3.6%. Now, Nevada’s historic hold over time, 5.4%. I think we can continue to talk about Nevada’s hold in a more stable environment because of how archaic the market truly is. Right? We haven’t seen a huge shift to mobile. By Nevada standards, we have, but we have not seen the kind of shift to mobile that we’ve seen elsewhere in the country. We haven’t seen the shift in customer that we’ve seen elsewhere in the country when it comes to Nevada.


So I think it is a good apples to apples to talk about the fact that the game was ultimately not a favorable result for the sportsbooks. With the Chiefs winning the game and the Chiefs having anywhere between 60%, 70%, in some cases, closer to 75% of tickets and cash at sportsbooks, then it wasn’t a great result for them in the long run. But you still saw a win on the game in Nevada, which that’s not a bad thing when you think about it. Because in another environment with more potential 49ers betters, if the Super Bowl truly were something that just drew people who were close to come down to the game, you might’ve seen this work out differently for the sportsbooks.


So anyway, we’re kind of in the weeds. I’m definitely getting too far into the weeds on this. The point of what you’re saying, Matt, is that Nevada did fairly well overall, given what the environment was. Our Eric Ramsey projected $1.3 billion throughout the country. As we look at the early returns that have come in from New Jersey, from New York and some other states, we see that that’s tracking pretty well. Eric believes that it could come in $1.35, even as good as $1.4 billion in terms of handle on the Super Bowl. By the time all is said and done, we’ll have more of those reports over the course of the next few weeks at Legal Sports Report.

Matt Brown (23:51):

As more things get released, we’ll certainly keep you guys up to date on all of that. But just again, to wrap it up, it’s just to me, if you’re looking at that as a bad thing that it was an uptick with the game in town, I think you need to look at it more from a holistic standpoint than it is of just the like, “Oh, the game’s in town. That automatically means more people are going to bet.” You got to think about the type of people that come in town for that and the rooms that they’re taking up from the people who would normally be coming here.


And Adam, the final kind of thought on this, too, is you’re also bringing in thousands of people from San Francisco and thousands of people from Kansas City who are coming to town who, again, they’re coming in town for the game. They’re coming in town to root for their team. It didn’t matter where the Super Bowl was played, they wanted to go see the Super Bowl because they’re super fans of their team. So they also are not coming to Nevada to party it up and go crazy. Yeah, sure, they’ll do a little bit of that, but their primary focus was to come to the game, their primary focus and probably their primary expenditure was the tickets to the game, and all the things like that.


And so it’s not the same type of person that was coming to Nevada, and so it’s just one of those deals where I think it’s a little bit narrow of a view to just look at that number and think that that’s disappointing. I actually look at it and go, “Oh, that’s better than I thought.” I actually thought that we would be neutral. I thought it’d be stagnant, if anything else. And so yeah, $6 million is $6 million. It’s not like the biggest eye-popping crazy jump from the record before, but I think it’s a pretty decent jump.

Adam Candee (25:17):

You can go online and watch the same video I did of one media outlet going to people in the stands at Allegiant Stadium and asking them how much they paid for their Super Bowl ticket. I’m not exaggerating when I heard people say $9,000, $10,000 for a Super Bowl ticket. I’m not talking about the people who were sitting in Taylor Swift’s box. I am talking about the people who are wearing jerseys to the game. They might not have a whole lot of money left to go spend at the sportsbook by the time they paid to get into the game.

Matt Brown (25:49):

No, absolutely. I had a buddy who is a 49ers fan who was doing the whole, “I’ll wait until a couple hours before the game. I’m just going to be out there and then whatever. They’ll drop, I’ll get in.” Yeah, the get-in price for the absolute nosebleeds minutes before the game was still $6,100. It didn’t happen. It didn’t manifest, Adam. It never came to fruition. It was the first Super Bowl in Las Vegas. It was just going to be that. And like you said, like you mentioned, that’s probably the bulk of their expenditure when they came. It’s the tickets, it’s the hotel, it’s whatever. There’s not a lot of money to go gamble and do and all this stuff like that. So I thought it was a win. A lot of people. Maybe I’m in the minority.

Adam Candee (26:33):

I mean, you generally are. You generally are. You’re not the everyman. You’re every man for me, but you’re not the everyman.

Matt Brown (26:43):

I agree. I agree. Hey guys, everything we talk about here on this podcast, you can find over at legalsportsreport.com. So please go in, take in all of the words that Adam and company are putting on the page over there. Again, if you are listening to us on your podcast app of choice, go ahead, subscribe, rate, review. We do appreciate all of that, and if we’re on the YouTube side, hello, how are you doing? Hit that subscribe button as well. For Adam, I’m Matt. Talk to you guys next week.

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