EPISODE 227 | LSR Podcast

Alabama Shows Why Passing Sports Betting Legislation Is Hard


17 min
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Alabama Shows Why Passing Sports Betting Legislation Is Hard | Sports Betting News | LSR Podcast 227

Alabama appeared to be one of the most promising states for legalizing sports betting in 2024, but political wrangling led to unexpected roadblocks. Also, why 888 might be on its way out of the US market, the latest twist in the case against Iowa State student-athletes, and the North Carolina launch you’ve all been hearing about.

Full transcript

Matt Brown (00:11):

Hello, and welcome to episode number 227 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 my friend and yours, Adam Candee. You can find him on the Twitter machine @AdamCandee. Two E’s, no Y. If you hate yourself, you can follow me @MattBrownM2. We’ll talk about a new state going live here in a couple of days. One of those stories we talked about in the collegiate world a little bit earlier on in one of the podcasts, may have an ending coming towards it. Are we in consolidation? Are we into just deciding to maybe move on from some of the spend here in the United States? We’ll talk about that a little bit. But, Adam, let’s kick things off in Alabama.

Adam Candee (00:58):

So the movement in Alabama right now appears to be away from sports betting in a comprehensive gaming bill where it was moving along pretty well at the beginning of the session with all three pieces — three pieces being a lottery, Alabama is one of the few states that didn’t have one — sports betting, and casino gaming. Now that passed quickly through the Senate, got to the House and has met opposition, and it appears that whatever version of this bill passes the House, assuming it does, is going to end up in a conference committee because you’re going to see a different version of the bill come out of the House. The intelligence out there suggests that the lottery is going to be the only piece of it that is going to survive this initial cut, that sports betting and casino gaming will go away. And for a state like Alabama that has a naturally conservative bent toward gambling and that has had no form of real gambling, it’s not surprising to see some lawmakers want to take an incremental approach as opposed to going for the whole thing at one time.


Frankly, we’ve seen very few states try to do everything at once. We saw Michigan do it fairly successfully, but again, that was after a failed attempt that passed the legislature and was vetoed by the outgoing governor. And we’ve seen Pennsylvania do something somewhat similar even though there were casinos in place in Pennsylvania prior to that. So it’s not dead for sports betting in Alabama at this point, but from everything that our Pat Evans, who has been covering this from top to bottom, has been hearing, it appears that sports betting in Alabama is a long shot for this year after it appeared to be maybe a 50/50 shot coming out of the Senate.

Matt Brown (02:43):

Brutal for our friends down there in the south. Adam, this was one of those things where we were looking and we were looking at a map and we were saying like, “Oh, OK. Well Alabama…” Whenever you look at the fact that Mississippi doesn’t have statewide mobile yet, there’s nothing going on in Georgia as well. We’re like, “Oh, OK, Alabama. That’s an interesting little spot for them.” But unfortunately, as you mentioned, looks like maybe we are going to have to wait on them at least for another session.

Adam Candee (03:10):

And not surprising really. Just because of the fact that sports betting didn’t exist at all, right? There was nothing in person like Mississippi, as you mentioned, where they’re trying to expand to mobile. And if you look at Mississippi as an example, it’s taken yearly tries to even get to the point of a maybe on mobile in Mississippi after starting frankly as one of the first states to launch any form of sports betting through a loophole at a previous law that hadn’t passed. So I don’t think it’s dead in Alabama by any stretch for the long haul. However, I do think it’s a matter of the lottery getting passed this year. It could be added back in a later version of the bill. But again, considering the reticence that’s been in the House, I would be surprised if 2024 is the year that we see it pass.

Matt Brown (03:57):

So we have seen some of these partnerships come and go as we are looking at, we’re not quite in version two of US sports betting quite yet. Obviously we still need Texas. We still need to figure out what’s going to happen in California. Will there be any sort of expansion in Florida? Will it be an…? So we’re still in V1, a more mature V1 here. But as we enter V2, Adam, listen, the questions we’re going to continue to ask is will there be consolidation? Will there be people who just decide this isn’t for them? Are there going to be someone emerge because they have money and they’re going to go crazy with all of that? Well, this story here seems like one of the gaming giants globally might be deciding that the US just isn’t quite for them.

Why 888 might be on its way out of the US market

Adam Candee (04:46):

Basically what we’ve seen, Matt, in the first almost six years of this, is that success in other markets does not dictate success in the US sports betting market. And a number of international operators who’ve come over and tried to make a go of it have not been either willing to spend at the levels that FanDuel, DraftKings, MGM, Caesars have been or when they have spent, it just has not resulted in any sort of real acquisition. They’ve come over here with products that were more geared to the European market. They’ve come over here and just not been willing to play in the same way that has been required to succeed so far. Does that mean that they couldn’t succeed in the long run? No. But the cash burn at this point for a lot of these either larger European operators who have a smaller presence in the US or other upstarts just really has not been something that is viable.


So now we see that 888, which of course has had some leadership changes and challenges going on with that company ending that SI Sportsbook deal. And I think it’s important for us to talk about, Matt, Sports Illustrated in particular and then the greater media brand landscape because what we’ve seen through almost six years of legal market in the US is that a media brand means nothing, absolutely nothing without product and execution and marketing behind it. Because granted the Sports Illustrated brand for guys like you and me who grew up with Sports Illustrated being a paragon of journalism, being something that you waited for in the mail every week to get that paper magazine, well, that brand is basically nothing now. It has been stripped and it is basically on the side of the road on life support.


So now you evaluate, OK, Barstool did not work out. Frankly, it might be the closest to success that we saw. TheScore did not work out in the US market in any way. And it remains to be seen with ESPN, but the early returns that we’ve witnessed from the Penn ESPN deal are middling. So we don’t really know where that’s going to take off in the end. So I think the thought that we had that these big media partnerships and the reach and the access they provide would be something that was important, something that would be leading to success is not necessarily the case without something more behind it.

Matt Brown (07:05):

Yeah. It’s interesting because 888, if you guys aren’t in tune with what’s going on in Europe, they have William Hill over in Europe; William Hill, you walk down the street, there’s William Hills all over the place. William Hill, a wildly successful brand over in Europe. 888, was always very curious as to what they were going to do here in the United States. Obviously a company that knows what they’re doing when it comes to gambling, obviously a company that has been in the space as long as anybody and has as much experience as anybody, but they came over here, Adam, and it’s like, so I’ll read from this press release that I got from them that just says they’re also entering a strategic review of their American operations. And it says “The strategic review of our US B2C operations will continue at pace, and I look forward to updating shareholders on our plans for the wider group in late March,” and that’s per their CEO.


In this release it continues on where there can be no assurance regarding the results or outcome of the review. So it’s pretty interesting that this is almost laying the groundwork, it seems like to me, Adam, of them saying, OK, we tried this US thing, we kind of stuck our toe in because they didn’t really go full bore. They just stuck their toe in. It didn’t get the results they were hoping for, and it seems like now they’re like, look, we do well in Europe. What are we doing over here trying to fight against these guys that, again, you and I say, it’s not like DraftKings and FanDuel have this thing on an absolute choke hold, but in the near future, and I would even say into the near to medium future, really people’s aspirations is only to be number three. I mean, I don’t think you can really look at this and say like, “Hey, we want to be number one, number two”. Maybe you say that from a decade down the road, whatever, our 10-year goal is to be number one. But you’re really just trying to fight to be number three right now. And maybe 888 just looks at it and says, hey, the juice isn’t worth the squeeze.

Adam Candee (09:08):

They’re not alone in that. There are a lot of smaller operators, and I say smaller not in any disrespect to 888, but smaller in terms of US presence, who have looked at this and say, yeah, the yeehaw cowboys and their same-game parlays are not the way that we’re going to be able to succeed, right? We’re just not able to keep up with what DraftKings and FanDuel had done, tech-wise in DFS to prepare for this, and then the heft of MGM, Caesars and so on, 365 you could even throw in there, who have endless resources to be able to push into this thing. Now, that doesn’t mean that MGM and Caesars are pushing endless resources into this thing at the level of DraftKings and FanDuel, and that’s part of why those latter two are the two in the lead. I agree with you that the duopoly doesn’t necessarily mean that it’s a duopoly forever because who’s to say that the spending rate that has established those two as the leaders will keep up for them and that others won’t try to spend at a more prodigious rate to chase them.


But the question really when it comes to what we’re talking about right now is if you are an 888 level operator in the US, if you’re less than 1% share, how long do you really want to hold on here? We’ve seen some operators say, “Well, we want to see what happens with iGaming.” Newsflash, that’s not happening anytime soon, right? If you think it’s hard to pass sports betting, good luck passing iGaming in the timeframe that’s going to allow you to sort of limp along until you can bring an iGaming product into the US market. And by the way, it’s not as though FanDuel, DraftKings et al. are sitting around on their butts waiting for iGaming legislation to pass. They’re pushing their product hard in the markets where it’s already legal and they’re refining their product to have it ready for future state launches as well.

Matt Brown (10:54):

Yeah. It’s super interesting. I mean, it’s one of those deals where as you read this along, and Authentic Brands by the way, is the company that owns Sports Illustrated. So it’s talking about the actual press release is the breaking of the relationship with Authentic Brands and stuff. How about this one, Adam? “The partnership had granted exclusive use of the Sports Illustrated brand for online betting and gaming. As part of the termination agreement, 888 has agreed to pay a fee of $25 million that will be paid in cash from available resources. Additionally, 888 will pay an extra $25 million between 2027 and 2029 to break the agreement.” So it’s worth $50 million to them to break this agreement. If you’re wondering how little they have reaped any rewards from this partnership over in the United States, it’s worth 25 upfront and 25 down the line to go ahead and say, hey, thanks, but no thanks.

Adam Candee (11:59):

Yeah. Amazing how Authentic Brands, when they decide, you know what? We’re just going to let go of all of our reporters and find a way to monetize a website, how desperate 888 might be to be like, yeah, you know what? We need away from you sooner than later.

Latest twist in case against Iowa State student-athletes

Matt Brown (12:15):

Yeah. It’s just interesting stuff there in that one. Of course, anything that comes down further, like we said, he said he hopes to have an update for the shareholders by late March. So I mean obviously we’re only a few weeks away from that, so there will be more to that story for sure. Adam, we talked a while about charges against Iowa State athletes, and we do get some news coming out of that story.

Adam Candee (12:38):

So the charges against Iowa State student athletes, four of them are dismissed. And what’s important to note about this story is the reason why the charges are dismissed, because our reporting along with that of a number of local outlets has shown that what went on was illegal search. The way this was being done was being done essentially by one rogue agent doing things that he was not allowed to do and bringing some others into his world as well to help him do that unwittingly. Now, does that mean the charges are gone? Not necessarily because we saw that a couple of the government bodies in Iowa put out a statement expressing that they were pretty disappointed to see that the charges were dropped. What it means in the long term is that it could be refiled based on legally obtained evidence, if they have enough legally obtained evidence to be able to bring new charges. Will they want to go through that? We’ll find out in the long term, but remember there were a number of student athletes at Iowa and Iowa State who got caught up in all of this. So what we see in terms of these four athletes whose charges were dismissed, we’ll have to see what happens in terms of the rest of the student athletes who had penalties either lobbied, I shouldn’t say lobbied, levied against them or otherwise, were disciplined.

Matt Brown (14:05):

And while we are not going to get Alabama joining the fold here, it seems like anytime soon, Adam, we are here only days away from getting a new player in the market.

The North Carolina launch you’ve all been hearing about

Adam Candee (14:18):

Do you have a computer? Do you have a smartphone? Do you have any apps on that smartphone related to sports? Do you ever go on Twitter? Then you know that North Carolina is launching sports betting next Monday in the online form, March 11th start for North Carolina online sports betting. We have all the coverage of that at Legal Sports Report. This started years ago in North Carolina with two tribal casinos where there was in-person wagering available via Caesars. But it wasn’t until this past year in 2023 that legislation was passed to make it available widely online, and now you see that there are going to be eight sportsbooks at the starting line for online North Carolina sports betting. What’s interesting about the market, it’s another one of these where we have a clean start right from the beginning for a number of sportsbooks who are new, like a Fanatics and a 365, and then you also are going to see the first product of Underdog when it comes to sports betting.


Now we’ve seen that they’ve had a pick’em product that some say, including a number of regulators, looks a little too close to prop betting for their liking, but it also means that they have had the opportunity to at least find some customers in the North Carolina market over time. Now they did shut down their pick’em products recently in the process of applying for a license in North Carolina. That does not of course mean that those customers have vanished and gone away. There are still customers that they can come and try to activate in North Carolina, so that might be the most interesting part for this launch is to see Underdog, this company that has had a lot of hype around it for the last couple of years, this is the first time that they’re letting anyone see their actual sports betting products in the wild.

Matt Brown (16:13):

It is going to, as you mentioned, it is going to be a thing. This has been talked about for quite a while now. Lots of hype built up around this one. Pre-launches and all of the things that you can do possibly to get ready for North Carolina, finally coming to us here in less than a week. As Adam mentioned, all of that and the other stuff, if you want to go in and get a little deeper look on all this, legalsportsreport.com; everything we do, absolutely free. So if you haven’t subscribed already, please go in and do that. We do appreciate that too. For Adam, I am Matt. Talk to you guys next week.

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