First Banning College Player Props, Then What? | Sports Betting News | LSR Podcast 226
Ohio reverses course and grants an NCAA request to ban college player prop betting. Is that where the push for more restriction starts or where it ends? Plus, the latest on pick’em game bans around the country, a legislative roundup from a number of states, and what a DFS deal in Texas means for the future there.
Full transcript
Matt Brown (00:08):
Hello, and welcome to episode number 226 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 got Adam Candee. You can find him over on the Twitter machine, Adam Candee, two E’s, no Y. If you hate yourself, you can follow me @MattBrownM2. We’ll give you a big state roundup. We’ve got a little bit of something going on in multiple states out there, so we’ll get you up to date on what’s going there. We’ll talk some more about some DFS stuff that has happened here over the last couple of weeks. But Adam, let’s kick things off here in Ohio.
Adam Candee (00:39):
So as we know, right nearby in Indiana is where the NFL Draft Combine with all the top college football prospects is going on this week, and the news is related to college football and also college basketball because we start with Ohio where the Casino Control Commission has granted the NCAA’s request to ban player props for collegiate athletes.
Ohio reverses course and grants an NCAA request
(01:06):
Now, in case you’re not clear about what we’re talking about, we’re essentially saying, you can bet on individual college athletes and their performance. Will a college basketball player have over or under a certain amount of points? Will a college football player have over/under a certain amount of yards? There’s always been in the last six years question and concern around prop betting with college athletes because of the potential for there to be nefarious actors and someone getting to a college athlete and saying, “Hey, it might be worth it for you to go down a little quickly, go out of bounds a little quickly, be a little short on a jump shot,” et cetera, et cetera, when it comes to your individual performance. And they might be in some way either compensated or scared into performing in a way that would benefit someone betting on them with college props.
(02:01):
Now, we understand as people who have been inside this space for a while, Matt, that generally the limits on college props are not the sort of limits that would lead to major money moving through a market. That being said-
Matt Brown (02:16):
And honestly the NIL stuff helps too, right? Because like any star athlete that might be able to actually control an outcome of a game or whatever, or even like you’re saying from a player prop perspective, it doesn’t behoove Caleb Williams to not go throw for 300 because the guy’s making $8 million from his NIL deals. So NIL helps a little bit too.
Adam Candee (02:37):
… It does, and when you look at the way certain NIL deals work, it’s not just about the top athletes and that’s not where the concern would be. There’s no one out there worried that Caitlyn Clark is going to stop shooting from the logo and do something that would go against what is in her best interest.
(02:54):
We’re talking about people who are the fifth, the sixth, the seventh players on those teams who, in a lot of these situations with NIL are being taken care of. If a program gets a deal with a car dealership, well, we’ve seen college basketball teams, all of them get a car, right? And so they’re covered. You don’t have to worry about a $1,000 or $2,000 influencing a lot of them. But what’s interesting about this story, Matt, is that it is about the NCAA having a request granted at the state level and what sort of momentum that could build.
(03:29):
Now, every one of these state gaming regulators has some mechanism built in for a sports organization or another governing body to come to them and say, “We would like you to consider banning this market.” It doesn’t happen a lot, but this is the one that has always felt like it is ripe with possibility to do. And make your own decision as to whether you think it’s a good idea or a bad idea, that’s not really what I’m here to talk to you about.
(03:57):
I’m here to talk to you about the idea that it could lead to more, right? The NCAA could see the ways in which it was successful doing this sort of thing and be able to make more headway in terms of banning other markets. We’ve seen in-state college bans in some states, we’ve seen some states that don’t allow betting on college tournaments in certain states. It’s something that goes a little bit, I don’t want to say far and wide, but it is definitely different strokes for different folks in different places. And the next frontier here, Matt, and it’s getting a little more attention this year than it did last, is betting on the draft combine, betting on what someone’s vertical leap will be, what someone’s 40 time will be, what someone’s bench press reps will be.
(04:42):
Now this is one that’s getting different treatment from different regulators. We’ve seen the regulators that are in tighter states. I would include New Jersey, I would include Michigan, I would include New York. Those who pay pretty close attention to these things are not allowing betting on the combine. Those whose rules are a little bit more permissive? Those states have had markets offered by DraftKings, by FanDuel, by some others on the combine, which kind of gets into the same area that we’re talking about here, Matt, even though we know that at the combine, many of these guys feel like they have their draft prospects on the line based on how they perform in this situation. But again, it’s still the same thing about betting on the individual performance of a college athlete.
Matt Brown (05:24):
It is, and listen, I’m actually, people are going to be shocked to hear me say this, but look, books want to put up as many markets as humanly possible. We know that, right? That’s why when you go in and you click on any given tab, there are literally hundreds if not thousands of different bets that you can make for a slate of games that day. That being said, the handle you get on college props is literally a fraction of a fraction of a fraction of a fraction. And if that becomes a thing that is a somewhat sticking point, I’d be fine if they went away with it.
(05:55):
On the flip side, it’s like the deal we’re saying with, but the in-state college ban, I think that that is ridiculous, right? Because now we are encouraging people who want to, the most likely casual bettor, Adam, as you well know, wants to bet on the home team and the most casual bettor, then you’re actually forcing them either to a bookie or offshore or whatever it is or something like that.
(06:15):
So I think that one should be looked at reversed. And this one, if it came a thing where college props got axed, I mean would the books love it? Not really, but it’s not really going to hurt the bottom line. There’s not really any handle that’s bet into these things, and so I don’t really care one way or the other with all of it. From the combine stuff, the thing that you point out is the biggest one here, which is it’s not even necessarily that these guys aren’t going to try to get to a certain number. It’s just there is a finite number that a lot of these guys can reach, right? And so that will be known by a trainer, a coach, an agent, a whatever, and all that heading into this deal, which does make this a slippery slope. They’re not going to do less bench reps because again, like you said, that can affect them millions of dollars down the line.
(07:05):
But a strength coach knows how many bench reps a dude can do, right? I mean, so there is a number that is just known beforehand where if they set the over/under at whatever 24-and-a-half reps of the 225, a strength coach knows whether that dude can do 25 reps or not. I mean that’s just all there is to it. I mean this is honed in; these guys trained for this for months leading into it. And so that’s where the slippery slope comes in to me, which is like, “No, I don’t think any of them are going to do worse.” Because again, it doesn’t behoove them to do worse. It’s just some of the stuff is known, there’s just a finite number. They know how many bench reps they can do. They know how high they can jump. They know within a 10th or two of a second of what their 40 time is going to be. So all this stuff is just known beforehand.
Adam Candee (07:49):
And let’s go really in the weeds with this, Matt. All right, if someone’s 40 time is set on a market at 4.35, right? There’s a major difference if you clock 4.4 versus 4.3 when it comes to your draft status, right? But when we talk about other things like bench press, let’s say like you said, it’s set at 24 and a half. No NFL team is choosing to draft a guy or not draft a guy based on whether it’s 24 or 25 on the bench press reps.
(08:20):
However, when the market is set at a certain place and you’ve got a strength coach, you’ve got the athlete themselves, whoever it is, who knows what they are able to do. If someone could get to that person, if there were a legitimate way for them to get that information and be, say, “If you landed 24 instead of 25, we could make it worth your while.” And again, is it always like that? Is it ever like that? No, but to the point you made, Matt, the handle on these things is so small that you have to ask risk versus reward.
Matt Brown (08:54):
Yeah.
Adam Candee (08:55):
Right? And even if the risk is super low that someone could be influenced in the way that I just mentioned, which sounds like it’s out of a movie? The reward of having the market available is still lower than that risk.
Matt Brown (09:09):
And I’m going to use the L word that sports betters absolutely hate, but I’m going to use it, or just put limits. It’s very easy on all of this, right? If you want to look at it as a market that you’re throwing out there just to have it available so people have some sort of little sweat if they’re going to watch it on television, make the limit a 100 bucks. And it’s, you know what? For pros, if it’s not worth your time, it’s not worth your time. You don’t have to bitch about it being a hundred-dollar limit or whatever. It’s only that if it’s not worth your time, it’s not worth your time, but you just put a limit on it so low that no influence would matter anyway. Even if you got down a $100 at 10 different books, you’re still only maximizing it a $1,000, right? So I mean I know the L word is so taboo and everyone hates it so much in sports betting, but just put limits. If you put limits, then it’s not a big deal.
Adam Candee (09:58):
If you talk to anybody who does this at the level that you’re talking about, they’re going to have 10, 20 beards that can get a $100, that can get $500 down on something for them at any given time, right? They’re going to turn through these people fairly quickly. If they get banned, “OK, we’ll move on to the next,” right? Guys who do this for a living know how to get outs. It’s not a complicated thing for them. It’s challenging, but it’s not complicated. And so if the market isn’t offered legally, chances are somewhere it will be offered offshore somewhere else where the people you’re talking about who would complain about limits are going to be able to find this one way or the other.
(10:36):
The idea, of course, for legal operators like a DraftKings or a FanDuel is that this is a time in the calendar in which there’s really not much else to bet on. And if they’re going to find a way to have something that says NFL under that tab that someone can bet on, then that marketing value is really worth a whole lot more to them than whatever money trades hands through betting on it.
Latest on pick’em game bans around the country
Matt Brown (10:57):
Absolutely. It’s again, something that we will continue to monitor because this is not the end of this story for sure, there will be more to this one. Let’s head over into the DFS market. Listen, it is basically a weekly update here with all of this, but that is again, this is … Actually Adam, this kind dovetails into this too, right? If they ban college props from sportsbooks, what about the DFS+ operators? They’re going to still put up the over/under stuff or whatever. So I mean, again, this all kind of ties together too, but what’s the latest over in the DFS landscape?
Legislative roundup from a number of states
Adam Candee (11:30):
So we’ll just give you the state-by-state rundown of what we’ve seen recently. The most notable of the stories came yesterday when we learned that Massachusetts sent cease-and-desist letters to 10 fantasy sports operators who were offering some form of pick’em. Now PrizePicks and Underdog were not part of that because according to a spokesperson with the commission, there had been discussions between both of those companies and regulators to say that they would voluntarily make changes that would satisfy what the regulators want. And it looks like in Massachusetts that it’s one of the states where they want it to be peer-to-peer versus player-versus-house.
(12:07):
Now, some states have looked at it that way. Some states have said, “No, anything that is pick’em is too close to a parlay, and you’re not allowed to do that.” So it’s important that we draw a distinction as to what each state is doing with regard to that. Now, I think it’s notable for a couple of reasons here in Massachusetts in particular, Matt, and let’s talk about the 10 operators, right? You can go to the story that Mike Mazzeo has at Legal Sports Report, to find out who they are.
(12:33):
But this is something that our old friend Dustin Gouker used to talk about all the time on the podcast. It’s not just the big boys doing this. It’s not just PrizePicks and Underdog. If anyone out there has thought … Man, they talk a lot about these two companies. Well, they are the biggest in the space right now, but Sleeper and Betr. And back in the day, Yahoo, who is on this list, PS, there are many operators who are doing some form of pick’em, and Massachusetts has called out a number of them in this case.
(13:02):
We also see in Mississippi that Underdog has pulled out, and both of these states — Massachusetts and Mississippi — had telegraphed that there was some level of regulatory action potentially coming over the last few weeks. So neither was a particular surprise to see. Now it’s not just regulators cracking down.
(13:20):
We are seeing some movement in terms of lawmakers in Georgia trying to codify some rules and maybe even some protections for the fantasy sports operators. There is a bill that was heard in committee that just yesterday we saw that the representative pushing it was trying to get into the game of skill definition. And for those of us who’ve been listening to this a long time, you don’t need us to go into skill versus chance and all of the things that get involved there.
(13:51):
But I thought it was interesting that we see in Georgia that there is this bill, there are bills filed in Florida to this end as well. Kind of the natural next step, but I wonder if that next step is coming a little bit too soon because we haven’t really even figured out what the issue is in every state. Can we agree on what the issue is before legislators try to codify what the issue is and is not?
(14:17):
And I know that sounds like a little bit of word salad, but essentially what I said at the beginning here, different state regulators are taking issue with different parts of the pick’em offering. I think we all probably need to get on the same page about like, “OK, in general, what is going to be something that is going to meet the definition state-by-state that is close to uniform for the sake of this thing not being a constant game of whack-a-mole for the next few years in terms of trying to figure out the legality of the product in different states?”
(14:49):
And Matt, as we talked about last week, this comes at the end of football season. No big surprise that that’s the timing, right? That was the time for these companies to make money. But of course we saw it was before last football season that DraftKings, FanDuel, et al. began the pushup in Wyoming where they said to regulators, “Hey, you might want to take a closer look at this.” And then the regulators of their own volition said, “Yeah, this doesn’t work.” And it started the cascade that we’ve talked about for the last six months here. You know we’re not going to get to next football season and still be in the situation we’re in right now. But again, as for now, we are still seeing state-by-state a lot of action coming down against the pick’em products.
Matt Brown (15:27):
Yeah, I wonder if we see some stuff like we saw with DraftKings and FanDuel back in the day, despite the fact that they were the biggest of competitors when they were trying to get these DFS laws done in all these states. They worked together to put together a framework and go in and have a unified front like you’re talking about. I do wonder if we don’t see PrizePicks and Underdog kind of working together behind the scenes here, right? To put together some sort of framework that they think is passable and presentable to all of these states that are again, questioning the validity of the product that they’re putting out. Where despite the fact them being the two biggest players in the market and despite the fact of them being competitors, “Hey, it’s in our best interest for us to come at this from a unified front.”
Adam Candee (16:07):
And good thinking there because there is the Coalition for Fantasy Sports where the couple of these companies have gotten together and are trying to present a unified front. But as we’ve talked about different ambitions lead to different wants and Underdog pulled its pick’em from North Carolina this past week. Why? They’re in the process of applying for a sports betting license. They want to be there at launch. And for the first time we would see what their sports betting product is like.
(16:40):
And we’ve talked about on this podcast that they have ambitions in sports betting. So they had a different motivation in North Carolina to pull their product as part of the licensing process for sports betting. PrizePicks doesn’t have that same motivation, so they’re going to have to decide for themselves where they see the commonalities that they can push for because there are going to be some states where they’re not looking for the same thing.
Matt Brown (17:03):
Do you live in Alabama, Georgia, Illinois, Minnesota, or Missouri? Well, guess what? You are in luck because we have little updates for you on each and every one of those states.
Adam Candee (17:13):
Oh, it’s old school LSR pod with the state level whip around. Here I go. We’ll start in Alabama where again there is more legislative movement than we expected. We’ve already seen one chamber of passage and what we’re hoping for is to see the House get a move on it as well. We did have some folks talking in the Alabama House yesterday about how they think if the bill can get to the floor that it will have a very good chance of passage. Now can it get to the floor?
(17:47):
We’re going to find out, but Alabama is farther along in this than it has been in the past. Now again, this is a larger project here because this would require a constitutional amendment, so it’s going to need more votes. It also is a package that could include casino, that could include lottery. So we’re waiting to see if it gets through with all three, if it somehow gets scaled back, if sports betting maybe gets pulled out and is treated differently. Wait and see when it comes to that in Alabama. But there was at least some discussion yesterday of what the prospects look like in the House.
(18:20):
Now in Georgia, just talked a little bit about the DFS bill and its consideration there. Same thing where we’ve seen one chamber of passage and we are waiting for the House again in Georgia to make a move on sports betting. Is that going to happen? I don’t know if it’s going to happen because we are again talking about larger issues in Georgia that are stalling out that sports betting bill. It is interesting to see DFS move a little bit because we had been told that DFS might get caught up in the discussion over sports betting. What could be interesting there is that PrizePicks is based in Georgia, and there is at least a little bit of home state consideration there when it comes to one of the biggest operators in the DFS space. They of course gave their testimony in that committee hearing about why they think their product should be legalized and codified. And we’re watching what happens there in Georgia.
(19:15):
Illinois is a really interesting one, Matt. Governor Pritzker, who has been at times a help to the sports betting industry and at times a hindrance to the sports betting industry, in his budget is proposing more than doubling the tax rate on sports betting in Illinois, which would go up over 30%. And this is a state that of course got off to a weird start because of having the required in-person registration that was there to benefit Rush Street and Rivers, and the Covid pandemic put a wrench in that and Pritzker had to put a temporary restriction on the registration in person and allow them to be able to register online. And once that genie was out of the bottle, you really couldn’t go back even though the registration requirement went back into place for a certain amount of time.
(20:02):
But Illinois has become a top five sports betting state in terms of revenue, and if they are able to pass some sort of change in the tax rate, don’t be surprised if others try to follow suit down the line. Now, states that are still trying to get something done include Minnesota and Missouri as we mentioned. A committee hearing in Minnesota, we saw one of the preferred sports betting bills from the Democratic-Farmer-Labor Party move forward. That’s still procedural at this point, not a real big progress moment, but we did want to mention that one of those bills is on the move. We’re only two weeks into that session right now. The same issue is going to be there whether the tribes and the tracks can get on the same page. Tracks want licenses. Tribes have offered them a revenue cut and not licenses. We’ll see what happens ultimately there.
(20:51):
Missouri, interesting that the ballot measure that DraftKings and FanDuel have put a couple million dollars behind did hit a milestone this week, that is notable. The petition gatherers say they have 100,000 signatures to put sports betting on the ballot in Missouri this November. The numbers you need to know, 170,000 valid signatures need to be turned in by May. Now, when you talk about valid signatures, if you’ve ever been involved in the political game, you know that if you need 170,000 valid signatures, you do not turn in 170,000 signatures. They are aiming for 300,000 because when all of these are random sampled and you go back and say, “OK, how many of these are actual people who are registered voters who are able to sign the petition and be counted?” You know that every time that happens, there’s going to be a certain percentage that is thrown out.
(21:46):
So you always try to turn in well more than you actually need. They get that done by May. They qualified for the ballot in November. Missouri might finally be able to get around the legislative roadblock that Senator Denny Hoskins has put up for the last couple of years and appears ready to do again this year.
What a DFS deal in Texas means for the future there
Matt Brown (22:03):
Yeah, I was looking around just at little state news here and there, and I actually should have brought this up a couple of weeks ago, but there were several articles posted locally around, in Texas as well, Adam, of saying, “No, sports betting is not legal here. It’s still not legal here,” and whatever. And it was basically, look, it was just talking to some local representatives and basically saying like, “Hey, what the hell? What’s going on?” A lot of them saying like, “Yes, we know there’s a push. We obviously won’t have a chance to do this again for another couple of years.”
(22:34):
But there was at least a little bit of work being done internally in Texas, and I don’t know if this was planted by anyone or if these are people just kind of doing it on their own, but basically putting out there like, “No, there is no legal betting in Texas no matter what you might see or what is going on out there.” And I thought that was at least fairly interesting, right? Because all it takes is a quick Google search of Texas sports betting. And while you will find legal sports report at the top of your Google search, by the way, a couple down you find 10 best Texas sportsbooks, a list from some site out there that whatever and all this. So again, it’s just one of those deals where we keep talking about Texas, but it’s like, “Guys, it’s happening regardless. You’re literally just beating your head against the wall here for no reason. You need to get it done.”
Adam Candee (23:22):
So let’s talk a little bit more about Texas because PrizePicks signed a deal with the Dallas Stars of the NHL, and our Mike Mazzeo talked to the president of the Dallas Stars and basically said, “Hey, PrizePicks has had some issues with state regulators of late. How was this deal vetted?” And I thought his answer was very interesting to say, “Yeah, it took us a while for our lawyers to get comfortable with this, and this also went through the lawyers at the league office. This was a process over the course of months for us to consider whether this is something we wanted to do.” They ultimately came away comfortable with where things are in the regulatory structure in Texas right now. And I think what’s important to note is there really isn’t a regulatory structure in Texas when it comes to these things right now.
(24:06):
And as those operators, PrizePicks and Underdog have had to at least temporarily pull out of Florida. And as the California opinion looms in the next few months, and as we’ve seen New York, which fined PrizePicks $15 million for operating without a license, Texas becomes the last jewel when it comes to the large population states, when it comes to both the fantasy sports landscape, and as you mentioned, Matt, the sports betting landscape. Now for sports betting purposes, it is the same song that we have sung in the past. The lieutenant governor has probably the most power of any lieutenant governor I’ve ever seen anywhere in the state of Texas as the president of the Senate. And Dan Patrick is the one-
Matt Brown (24:49):
He’s basically governor number two.
Adam Candee (24:51):
… Yeah.
Matt Brown (24:51):
I mean, he literally just, he slams the hammer down. He’s like, “This is what’s happening in this state.” It’s crazy.
Adam Candee (24:58):
I’ll spare you my bad Dr. Evil number two impression, say it’s pretty much that it’s Robert Wagner. No, it’s actually Dan Patrick in Texas who is the president of the Senate. And as he did in ’23, he’s able to control what legislation makes it down to the floor and gets a vote in the Senate. We saw the House pass sports betting in Texas in ’23, and then it never went anywhere in the Senate. Of course, it will be next year before that has another opportunity to come around. But Matt, as you mentioned, if we’re going to see some beginning of a groundswell when it comes to the discussion of this, we already talked about the Adelson Cuban deal and what that could mean for the future of casino gambling in Texas.
(25:38):
Mark Cuban said he isn’t as interested in sports betting as he is in casino, but there are going to be smart people who try to attach sports betting to casino as a way to get sports betting through when there are these powerful billionaire interests who are interested in casino gaming. So Texas over the next, I’ll look at my calendar here, 12 to 18 months will probably be the most fascinating market in the country to watch.
Matt Brown (26:02):
It really will. And one thing to mention there too, just again, you talk about the interests of people, and it was probably such a small investment that it doesn’t really matter anyway, I don’t know what the valuation of the company would be today as it is? But one of the original investors of Underdog was Mark Cuban. So he was one of the original investors in Underdog. So where does that all fit into play here as well? Again, I don’t know the valuation of the company. I don’t know how much he invested. I don’t have any idea and whether he even cares about that anymore or not? But something else that just muddies the water just a tad, just a little bit more there. Why not we muddy the waters in Texas just a little bit more while we’re at it?
(26:38):
Of course guys, everything we do, absolutely free here. So please go in, subscribe, rate, review. Do appreciate all of your help with all of this. If this is over on the YouTube side, go and hit that like button and subscribe over there as well. For Adam, I’m Matt. Talk to you guys next week.