We break down Atlanta wide receiver Calvin Ridley betting on Falcons games and the NFL’s discipline. We also talk about DraftKings’ fine for facilitating proxy betting, and developments in Illinois and Ontario.
Adam Candee: Hello, and welcome in to episode number 139 of the LSR podcast. We have all of the sports betting and daily fantasy news for you this week. I’m Adam Candee sitting in the host chair for Matt Brown. Joined as always by the great LSR team, Dustin Gouker and Matthew Waters joining us this week to talk about some of his great work. He has a good story up right now that’s going to make Dustin very happy because we’re going back to talking about DFS. In Connecticut, Matt’s also been tracking the earnings calls throughout the last few weeks. We have plenty of discussion coming out of those.
Of course, there are two major stories for us to get to this week. Neither of which will surprise you because you’ve probably already read about them at LSR or if not, you’ve been trapped under a rock, if you haven’t heard about Calvin Ridley and the Atlanta Falcons and the NFL. But you should find all of our news @lspreport on Twitter, @DustinGouker, @ByMatthewWaters. I’m @AdamCandee, two E’s, no Y.
1:30: DraftKings fined for proxy betting
Adam Candee: Gentlemen, let’s start with what I think is still the biggest story of the week. Largely because I don’t think it’s gotten enough attention overall and I guess maybe I’m just going to keep trying to push this until it does. Dustin, we got news from the New Jersey Division of Gaming Enforcement that they had reached a settlement for a $150,000 fine against DraftKings for allowing a VIP customer to proxy bet from Florida. Which on the surface and I’ve had people say this to me, “Well, what’s the big deal with proxy betting? It’s allowed in Nevada.” Well, sure. That’s not the entirety of this story though. Some of this proxy betting was happening from the DraftKings Super Bowl suite, at the Super Bowl in Florida in Miami. It also includes the fact that after the first time some of this was discovered, it appears DraftKings tried to work around the rules in some interesting ways. And I don’t know, I’m curious your thoughts on this. You’ve obviously followed the DGE and DraftKings for a very long time. What was your impression when you first saw this story?
Dustin Gouker: Yeah, I think it’s a big deal. Let’s start, there’s apparently a lot of shenanigans in Florida going on because that’s going to be the second story too, I just realized. But yeah, so proxy betting is illegal under New Jersey rules. And yeah, you can say it’s not a big deal because yes, we’re all here like you should be able to bet on any regulated sports pick everywhere you want. Sure, that’s the baseline. But that is not the reality we live in. That is not the laws, that is not the regulations. So we have DraftKings taking proxy bets knowingly, not even not knowingly. Obviously, they were actively involved, it seems like from the settlement and what we know about it. And taking proxy bets in Florida on a New Jersey app. Obviously, Florida, when this happened in 2020 was not a legal sports betting state, nor would DraftKings be able to operate there even in the legal environment that was open for a little while late last year.
So I think it’s a big deal because you’re violating state law. You’re also theoretically violating the wire act, which I realized after this story that maybe we just shouldn’t care about the wire act anymore. Because you can do whatever and nobody gives a crap anymore about like the wire act and its intersection with sports gambling. Like this is clearly a violation of some sort of interstate gambling law too, but nobody cares. So he paid a fine of $150,000, which you know, for what it is, I mean maybe right size, maybe not. But I do agree with you, it seems like a bigger deal than it is because if we’re going to have laws and regulations, should probably be following those. And you shouldn’t be able to bet in Florida, for sure. Especially if the state that you’re trying to be in has a law prohibiting it.
Now you could have done this some other way too. Right? Like you, would’ve probably done a proxy bet on an app in another state and then you wouldn’t have had a problem. But we’re using the New Jersey app where it’s specifically illegal. So yeah, people are kind of like, it’s kind of landed with a thud. But I do think it bigger deal, that we should be talking about in terms of the overall landscape of legalization here in the US.
Adam Candee: Dustin, some of the details here, I think are important to remember. How was this first discovered? Well, this was first found out when the VIP logged into both his DFS account in Florida and his sports betting account in New Jersey, essentially within a minute of each other. That’s a bit of a problem, unless he has some ability to teleport. Now, when it comes to how things were eventually dealt with when this was first found out, I think that’s a bigger part of the story. And it makes me really wonder about the level of $150,000 fine. And why it wasn’t more? Because once this was discovered the workaround, according to the settlement that DraftKings and the customer came up with was that, well, wait a couple of hours between when you log into the two accounts. And as was pointed out, it just happens to be the length of a flight between Florida and New Jersey. It looks like you’re looking for plausible deniability here. So Matt, I’m just still trying to understand ultimately the level of this fine and the message that it sends for future situations.
Matthew Waters: I don’t think you’re making too much of it at all.
Adam Candee: Am I making too much of this?
Matthew Waters: I think not enough is being made of this. The $150,000 fine really surprised me, right? I mean, this is a big deal for New Jersey. This was not a one-time issue. And the DGE, you just know them for being a little tough on operators. So this surprised me. And it especially surprised me when I think back to Tennessee and how hard DraftKings lobbied not to have a $25,000 fine and a formal violation for not holding 10% of their adjusted gross income over a 12 month period. They fought really hard for that. How does this look in comparison to something like that? I think this is something that DraftKings is going to have to explain to a couple people for time to come, because it’s a bigger deal than people are saying right now.
Adam Candee: I agree. And I think this is a question that regulators will bring up as we get down on the line here. Obviously DraftKings in the news for a number of things lately. But this one in particular jumped out at me as something that just requires a little bit more attention.
6:50: Calvin Ridley suspended by the NFL for betting on games
Adam Candee: Because as we’re going to talk about here with a second story, the industry is getting attention that it does not want right now. And attention that is already being mentioned in other places like in a hearing in Minnesota, the day after Dustin, we found out that Calvin Ridley star receiver for the Atlanta Falcons had been suspended by the NFL for a year. Not just for sports betting, not just for betting on NFL games, but for betting on Atlanta Falcons games.
Now, the details of this continue to be a bit murky. We know that the bets were placed from Florida, while Calvin Ridley was away from the team in theory, because now we’re starting to hear the bets might have been placed from outside state lines. That’s a geolocation problem. We’re starting to hear that the bets might have been placed from his girlfriend’s account even though, maybe his credit card was used to fund the account. That’s another level of problem, but what if it was his account? How did this not get flagged in the first place by Hardrock who has the account for that couple of week period that we had legal sports betting in Florida. So, I mean, look every take has and had on social at some point when it comes to Calvin Ridley, Dustin. But we have a podcast, and this is where we get to talk about it. So take the floor.
Dustin Gouker:
I mean… You’re an NFL player, you should just be able to bet on games, right? That’s the take. That’s my take, right? That’s what everybody else is telling me. Or at least the
Adam Candee:
Hashtag, let him play.
Dustin Gouker:
The hot takes, right? Or, you bet on your team to win, but it’s not okay if you bet on them to lose. That’s the real nonsense one, right?
Adam Candee: There it is.
Dustin Gouker: Just… Okay. Here’s the thing. Don’t bet on your own team’s games. Don’t bet on your own sport. I mean, these seem like very easy things to communicate and that players should know. Calvin Ridley is losing a year salary because he wanted to bet some parlays on the Falcons. How dumb is that? That is absolutely insane to me.
People are chalking this up to a win for regulated gambling. Sure. He got caught. If it was offshore, probably would never know about it. Great. I mean, that part is, I guess, sort of good. But I don’t… My take is not that this is some huge win for regulated gambling. This is the NFL cutting lots of deals with sportsbooks.
Apparently, they are so bad at communicating the policy that a very high profile of player is willing to risk his career and a lot of money so that he can bet on a regulated sportsbook. The amount of… I mean, I assume there’s been a decent amount of training going on at teams and at the NFL level.
And if it’s just memos and people are ignoring it… The NFL should be… Especially as they get in bed with sportsbooks and regulated sportsbooks, you got to be better than this. The other part of this is, if Calvin Ridley is dumb enough to bet at a regulated sportsbook, how many people are betting offshore? How many NFL players? We know this has to be happening. It’s not like it’s not happening. They’re just not getting caught. So that part of it is… The regulated market is helping because a wide receiver was dumb enough to go place at a regulated sportsbook.
So, I don’t know. This is the logical outcome of the quick ramp up of the NFL and other leagues getting into sports betting. That this is going to happen. You knew it was going to happen. How much more of it? And I think it’s a failure of education on the NFL’s part. And I don’t think this is going to be the last time we see this, certainly. But it is what it is.
But these takes about it not being… “Oh, it’s okay just because he’s betting on his own team,” please stop it. And people are using… And I’m sure you’ve seen this one. Okay, fighters bet on themselves in Vegas all the time. Does that mean that was a good idea? That’s not… I don’t think that’s a good idea either at this point, right?
Adam Candee: No, it’s not a good idea. And you and I… And we’ll find out for Matt here in a minute. But Dustin, at the moment I only know that you and I might be the only two people somewhere within this industry saying, “It is not a win for the regulated industry that an NFL player was caught betting on NFL games by the system.” I don’t care if Hard Rock caught him. I don’t care if Genius caught him. I don’t care if the NFL caught him.
When we have these discussions about the regulated industry and why it is better to have a regulated, legal sportsbook industry, we always go back to talking about situations like point shaving. Right? Like the Arizona State situation. That is why you want illegal regulated industry. Want to be able to suss out irregularities in betting.
The fact that you caught an NFL player is the base entry level of what should be expected in this situation. Because first of all, you should have stopped him from betting in the first place. The fact that you caught him is not a win. The fact that you caught him is, thank God you did the absolute basics of your job before this became way worse.
Adam Candee: So Matt, here’s the part that is a little bit weird to me. I guess one of the parts it’s a little bit weird to me. We’re talking about this only having been about a two week period in Florida, right? Where we only had the Hard Rock app available for a little while in the state of Florida. Now, there could have been a geolocation problem. There could have been a KYC problem.This is something that seems to me to have tentacles that could stretch out very far when we talk about not only legal regulated sports betting in Florida, but also this is something that is going to potentially have an effect on tribal off-reservation when it comes to IGRA as well, because this has to do with the Seminole tribe. I think we haven’t even seen the beginning of where this could go.
Matthew Waters: It’s pretty crazy, right? It’s super interesting when you start to break it down, looking at it the way that we’re looking at it. Where it should have been caught. Who should have found out. When it should have been stopped. I don’t think it’s a win. I do think that some of these companies are going spin it as a win, that they caught this. And they’re going to PR the hell out of it, and make it look great for them. And that’s fine.
But yeah, like you said, there were multiple points where this should have been caught. This should have been found. And there’s going to… A lot of people have to look into this and just figure out what we’re doing. Because like you said… Star wide receiver, everybody should see that name and it should pop up. But we don’t know…
Dustin Gouker: Yeah. It sounds… Right? This is not like this is a practice squad player that can slip through the cracks. This is a starting wide reciever.
Adam Candee: No, it’s not Josh Shaw. It’s not the first one we had.
Dustin Gouker: Yeah. Right. This is a person who… And it’s not some common name either. Like, “Calvin Ridley?” You shouldn’t… If you’re following sports, you know who Calvin Ridley is, right? This is not-
Adam Candee: Yeah.
Dustin Gouker: That’s the wild part. It’s like, okay… One, prevention, like you said. We should not be having… You should be very clear, do not bet at regular sportsbook. Don’t bet at any sportsbook. Then you actually catch him before he places a bet too.
Again, Calvin Ridley… Again, you said that the details are murky, but you should be able to catch Calvin Ridley before he places a bet. Not afterwards, right?
Adam Candee: Yeah. And look, it’s not just… Again, on one side it’s not like Mike Smith, the goaltender from the Oilers, that we couldn’t catch him because we didn’t know which Mike Smith it was. It’s Calvin Ridley. The only way this is worse is if it’s, we don’t find T.J. Houshmandzadeh placing a bet. Like, “Oh no, we thought it was the other T.J. Houshmandzadeh.
Here’s the other piece of this that I think we need to acknowledge. Because the other part of the takes that we’re seeing guys, is that, “Well, Calvin Ridley is betting on the NFL, and the NFL is in bed with legal sportsbooks. What did you expect?” Both things can be true. That there is hypocrisy in the NFL stance on gambling, and an NFL player should not be betting on the NFL. Both of those things can be true at the same time. And that’s the situation we’re in.
Yes, the lines are blurry. Because Roger Goodell, the commissioner of the NFL, once said that legal sports betting would be an existential threat to the league. And now they have seven partnerships with sportsbooks. That is hypocritical. But also at the same time, it in no way absolves an NFL player who from the time he first stepped foot on an NCAA campus has been told, don’t wager on games. There is nothing that says that it’s okay, because of that level of hypocrisy that’s there. It doesn’t work that way.We interviewed on a different program that I do, and interviewed a reporter from ProFootballTalk who worked for the LA Rams for six years. And he was saying, “Guys, you can’t walk anywhere around an NFL facility and miss the messaging on gambling. It is as clear as day. They tell us at the beginning of every season what you can and can’t do.”
So the fact that Calvin Ridley thought that he could go place bets on an NFL game is a massive, massive failure on so many levels. That I can’t believe anyone is standing out here trying to say, “Good for the industry” Or, “Oh, well the NFL set this up to happen.” No. It is a base level problem of, an NFL player bet on NFL games. Why are we not Pete Rose-ing the hell out of this thing? I don’t understand why someone is trying to make some level of nuance here. There’s no level of nuance to be had. Hashtag end rant, because we only have so much time on this podcast.
Dustin Gouker: That’s about the angriest we’ve ever been on this thing so far. It’s pretty angry.
16:15: Illinois ends in-person registration for sports betting
Adam Candee: Speaking of things that I get angry about, in-person registration is number one of those, Matt, and Illinois has finally fixed this situation many, many months and months after it should have. But finally, as of Saturday, you no longer need to drive three hours to sign up.
Matthew Waters: My goodness. Yeah. What a headache Illinois was. For anybody that doesn’t really remember, Illinois launched March, 2020, right before the pandemic started shutting everything down, and it just so happened that Illinois had an in-person registration requirement for sportsbook accounts. Governor Pritzker, I don’t think he really knew what he wanted to do at first. He allowed it, then didn’t allow it, then allowed it, then didn’t allow it. As of August, 2020 it was allowed for a bunch of consecutive months until April 2021, and then it was back to in-person registration.
‘Now a bill last year set the March 5th date. Originally it wasn’t supposed to go away until somebody paid $20 million for a mobile-only license and that just doesn’t seem like it’s going to happen. So March 5th was the date. Remote registration is now open in Illinois again, and brands care about Illinois again, isn’t that funny? BetMGM launched the day that remote registration was allowed. Caesars pushed its Liberty platform, which is the best version of its app and allows for remote registration. And just one note to point out to you guys, Illinois’s numbers for January came out today, 867.5 Million in handle for January. That’s a record. I don’t know what Illinois is going to do now that remote registration is back. Barstool only had a couple weeks of remote registration.:
It’s going to be interesting to see what these brands can do and push and when Illinois is going to break that 1 billion mark.
Adam Candee: Yeah, Dustin, I think that’s the real question we have is we had a few months of remote registration available, but it was happening in such a way that no one was prepared for it. The sports books were having to essentially ramp right up immediately because they didn’t know that Governor Pritzker was going to lift the in person mandate during COVID. Now it’s a logical solution to the issue, but of course he then took it away again. So what do you think? Illinois is already one of the top markets in the country. How high do you think it can go?
Dustin Gouker: Could be number two, could surpass New Jersey with reopening. And remember, like it was this registration thing was happening during the pandemic when there wasn’t a whole lot of sports when it first opened, obviously later in the year, there was some, there was more sports going on. So we don’t know what a mature or fully functioning Illinois market is because of all of the weirdness and all of the twists and turns and off and ons. But yeah, I think the ceiling is definitely number two behind New York. It could surpass, I’m not going to sit here and say it surpasses in March or April, but it could be New Jersey size at that point. It could be, again, we also have new operators like Matt said, so it’s definitely interesting. This is the first time that the throttle will be off entirely on Illinois. And I’m saying it’s probably the number two market in short order because of what we’ve seen with all of this weirdness. It’s already one of the biggest sports betting markets in the country.
Adam Candee:
And one of the things we also should factor in is assuming, fingers crossed, that we have a Major League Baseball season, remember that Chicago allowed for in-person sportsbooks at stadiums. So we’re going to have a number of these being open, including at Wrigley Field. And this is a city that loves its baseball. We could see this being driven by getting those signups at the stadiums as well. Could be very interesting in Illinois as we relaunch there.
20:00: NHL partners with sportsbook in Ontario
Adam Candee: Dustin, we’re just about three weeks away from the scheduled launch of the Ontario sports betting market in Canada. And we’re seeing the usual ramp up as partnerships get signed.
Dustin Gouker: Yeah, another major one here, NHL is partnering with the Official Lottery app Proline Plus there in Ontario. They’re already offering parlay cards before all of this, now offering full legal online sports betting. Obviously went live before any of the commercial operators get to go live here later this month, or sorry, early next month. But yeah, it’s another big partnership. NFL also partnered with Ontario lottery and gaming with Proline Plus. So it kind of this is an interesting dynamic because this is not what’s been going on, obviously depends on what you’re seeing in the market, but this is going with a lottery going with a different product, not the official provider with a DraftKings or a FanDuels or things like that. Of course, those companies don’t even have licenses as we sit here, at least not that we know of.
So I feel like we say this every week, but man, we don’t know a whole lot about Ontario going live in less than a month. We have PointsBet, theScore 888, but there’s all of the big US brands, a lot of the big European brands that have already served Canada in the gray market, like we don’t know what they are or what’s going to happen. We assume a lot of them are going to be live April 4th or soon thereafter, but we just don’t know. But yeah, it’s definitely interesting for the lottery product ProLine is giving a leg up here with these partnerships and getting some good feedback from the NHL and the NFL.
Adam Candee: Yeah, it’s really difficult to estimate the gray market impact. We don’t know who’s going to choose to regulate. We don’t know how that’s going to be measured into what we already know is a handful of products like you said, that in the US have been second- or third-tier operators in terms of their market share, but especially with PointsBet and theScore have made a pretty big noise about what they expect to be their presence in Canada.
22:05: Bet365 to Colorado
Adam Candee: One of those gray market operators, Matt, is bet365 and we’ve been talking and talking on this podcast about when is bet365 going to make a bigger splash in the US and you sussed out from their partners earnings call,
Matthew Waters: Yeah, earnings calls are super fun to listen to when you don’t have to pay attention to the numbers. When you’re just looking for little nuggets, they can be a lot of fun. And that’s what the Century Casinos call gave us. The co CEO, Peter Hoetzinger said that they anticipate bet365 to launch next quarter, which is at some point between April and June of this year, bet365 has been quiet in the US until now. They’re available in New Jersey. They had a deal in New York that just didn’t pan out for them because tethered licenses isn’t the way that New York went.
Matt:
Colorado seems like a great market for them to enter into. Whether this is the first step of many for them or not, we’ll have to see. It’s clear that bet365 is obviously they are a huge international brand and they know what they’re doing, so are they just waiting for the promotional activity to die down? Nobody really knows because bet365 won’t tell anybody. They didn’t even respond to our request for a confirmation on this window of launch. So still a lot of questions around bet365. I personally believe that whenever they want to enter the US and they want to have an impact in the US, they will. And maybe that’ll be you as soon as a couple months from now.
Adam Candee: It certainly could be. And Colorado, Dustin, makes a lot of sense for 365. It’s been one of the states that we’ve held up as a regulatory model. Fairly open, decent tax structure, et cetera. Then now they can go into this Colorado market and it seems to me like it’s a low stakes test for 365 going into Colorado. Right? You don’t expect them to go in and be a major player in terms of market share or anything like that right now. They can go in with that product, work out any bugs that you might have, see what the appetite for in-game betting is in the US, and get ready for what one well-placed source told me a couple of months ago, could be as many as 10 states for them this year.
Dustin Gouker:
Yeah. It’s the state with the most sports betting apps, I think, as we sit here right now. But yeah, it is a state that is, I think, over-indexed in terms of sports betting activity, in terms of versus population. It is, yeah. I mean, we’re still toe-dipping for Bet365. It is the question of how quickly this gets more serious in terms of them pushing for marketshare and pushing their weight around.
Adam Candee: Good article on LSR right now from Brad Allen, talking about the prospects for 365 written a little bit ago, but still stands up very well here today.
25:00: Daily fantasy sports in Connecticut
Obviously, Matthew few produces a lot of the content that we have at Legal Sports Report, and one of his most recent pieces speaks directly to Dustin’s heart. We’re back to talking about DFS. What’s going on in Connecticut?
Dustin Gouker:
I am so … We never get to talk about Daily Fantasy Sports. This is so exciting for me. Not really, but this is-
Adam Candee: Yeah. What’s the situation here, boys?
Dustin Gouker: Yeah. So Connecticut has one of the states that, in the 2016, 17, 18 range, when everybody was rushing to legalize/regulate DFS at the prodding of DraftKings and FanDuel, so they could continue doing what they did before sports betting happened. Connecticut was one of those states. What has happened, though, is apparently, according to Matt’s reporting, not actually a change in regulations, but how FanDuel has to interact with Connecticut customers.
And there’s apparently this idea that you have to have a 30-minute popup requirement to say, “Hey, log out. Take a break.” Which is interesting because DFS, as we all know, is not gambling. It is totally just-
Adam Candee: No! No!
Dustin Gouker: … a skill-based activity. I don’t know why you need to log out and take a break from DFS. And also, two-factor authentication is required of the app. And there’s been sports betting apps FanDuel and DraftKings have been able to roll out ad hoc and boutique based on what’s going on in the state. But DFS is just a national product, and they’re not really prepared to deal with these requests.
I mean, obviously, FanDuel doesn’t want to say, “Oh, this is a gambling product that you need to log out of all the time.” That’s something I could tell you DraftKings and FanDuel will push back on until the cows come home. So they’re shutting down DFS for the short term while they deal with this. So no app in Connecticut for FanDuel. DraftKings, as we understand it, is still going to be working in Connecticut, but just a weird one out there as we have these weird … just gambling law, in general, is just nonsense for treating DFS. FanDuel is going to be operating sports betting, but not DFS in Connecticut.
Adam Candee: Well, Matt, and this is the part of the story that really got my attention was that FanDuel’s statement said because of a change in state regulation, and the Connecticut regulators said, “I’m sorry, what change in state regulation?”
Matt: Yeah, the Department of Consumer Protection was very clear with me when they said that there was no change in regulation. And obviously, following this, I didn’t believe that there had been a change in regulation. The temporary regulations were approved in August. The permanent regulations were approved at the end of January. The only thing that the DCP didn’t get back to me with was whatever FanDuel and DraftKings originally signed for their provisional temporary DFS license, so it’s not known if this 30-minute window was mentioned in that because the DFS apps are rolled into the same license now as online gaming and sports betting, and so they’re getting the same treatment as a gambling app, even though, much to no avail, the FanDuel and DraftKings representatives just were not heard on that.
Matt:
I personally wonder if FanDuel shutting down until the NFL season … look, technology pipelines are crazy right now. Everybody has stuff they want to do. I think FanDuel would probably make this a little bit more of a priority if we were guaranteed an MLB season, so we will see if this timeline speeds up if those talks go well. I don’t know if Jeff’s Twitter account has been rescued or not yet, so I don’t know what’s going on with baseball. But yeah, as of right now FanDuel’s plan is to keep DFS down in Connecticut until the NFL season. And so, right now, DraftKings is your only choice in Connecticut.
29:00: State sports betting legislative updates
Adam Candee: Well, if you enjoyed getting down into the weeds of Connecticut DFS regulations with us, you’re going to love all of the rest of the content we have at legalsportsreport.com right now. Our Pat Evans has been following a number of state legislative moves, including in Minnesota, where we’ve had a first committee approval, in Missouri, where we had some action last year that appears to have some better support this year with a coalition of teams and companies behind sports betting going online in Missouri this year.
We had Arkansas launched not an app but a site for mobile sports betting, so we’re getting closer, Oklahoma as well. Maine, the bill is still on the table, the appropriations table. I don’t know where you can get an appropriations table. I can’t find it on Ikea or anything like that, but the bill is still on the appropriations table from last year, and now we’re talking about a different bill about tribal sovereignty. Pat has to sit through it so that you don’t.
Go check out all that we have for updates on the latest state news at legalsportsreport.com. Anything you can do for us in terms of ratings and reviews, wherever you get this podcast, we greatly, greatly appreciate it. Dustin Gouker @DustinGouker on Twitter. Matthew Waters @byMatthewWaters. I’m @AdamCandee, that’s too Es and no Y. Matt Brown joins us again next week here on the LSR podcast. Thanks for spending a little bit of your week with us.
