Happy Monday, everyone. Last week’s mix of sports betting news had one major component in common: cash flowing into the US sports betting market.
As always, the LSR team tackled the biggest stories of last week on the LSR Podcast. Make sure you’re following @LSPReport on Twitter as well for coverage of the latest stories and hot topics in the gaming industry.
For instance, if you weren’t following us last week you may have missed commentary on this absolute trainwreck of a sports betting segment involving children from Thursday:
They deleted it. We didn’t miss it. Isn’t it about time we talk about how gambling is advertised in the U.S.? pic.twitter.com/3I76UnRkfn
— Oregon Council on Problem Gambling (@OregonCouncil) October 2, 2020
Top sports betting news: 5Dimes pays up in massive fed settlement
There are segments of sports betting Twitter that love to defend the gray area of offshore sportsbooks.
The US Department of Justice made sure those gray areas got a bit darker last week, though, when it agreed to a $46.8 million settlement with offshore operator 5Dimes.
Owner Laura Varela, the widow of founder Sean “Tony” Creighton, settled with the US government after the company acknowledged the funds came from “various unlawful gambling-related offenses.” Those include wire fraud and money laundering.
The settlement means the brand can now try to enter the legal US sports betting market, but that could prove a tall task with state regulators.
And don’t expect other offshore operators to try the same. The DOJ found Varela was never involved with the sportsbook’s daily operations, making the settlement possible.
Varela and 5Dimes reportedly will first try for a license to offer sports betting in New Jersey.
Caesars buys William Hill for $3.7 billion
Another instance of big bucks floating into the US sports betting market is the news of Caesars‘ successful bid for William Hill.
The total cost is $3.7 billion, but it’s unclear how much of that will eventually come back to Caesars. The company is only interested in William Hill’s US side and plans to sell the rest of the business.
That rest-of-world business accounted for 93% of William Hill’s revenue in the first half of 2020.
Caesars raised close to $2 billion through newly-issued shares to help with the purchase. The company can be added to the ever-growing list of companies that tapped public markets for sports betting cash.
Barstool Sportsbook, PointsBet get public cash, too
Two more sports betting operators have increased cash this week after finalizing share placements as well.
Penn National raised $982.1 million in gross proceeds after selling 16.1 million new shares. The cash will help Penn accelerate its plans for Barstool Sportsbook.
That includes launching the app beyond Pennsylvania and converting its retail books to Barstool-branded ones by the end of 2021.
PointsBet, meanwhile, raised nearly $250 million in Australia from institutional and retail stock placements. That cash will go toward multiple areas, including the $393.1 million in ad spending committed to NBCUniversal over five years.
Did FanDuel miss Barstool for cheaper?
Penn reported a decent first two weeks for Barstool Sportsbook in Pennsylvania. According to Barstool founder Dave Portnoy, it should be FanDuel parent Flutter reporting those stats.
Portnoy told the Pomp Podcast FanDuel could have bought Barstool for far cheaper than Penn National. Penn paid $163 million for a 36% stake earlier this year.
Portnoy called FanDuel “f***ing idiots” for not making an offer on Barstool. FanDuel probably has spent more on talent than if they just bought Barstool, he added.
Nevada takes US past $25B in sports betting handle
September’s Nevada sports betting results helped bring the overall US market beyond $25 billion in handle since the fall of PASPA.
Nevada is responsible for the largest chunk of that with more than $10 billion in handle. New Jersey sports betting is second with $7.7 billion while sports betting in PA ranked third with $2.7 billion.
Nevada also took first place for sports betting revenue with more than $600 million over the two-plus years.
