Twitter Is The Place For Sports Betting | LSR 162
Welcome back to the Legal Sports Report Podcast, Ep.#162! We take a look at the big milestone for New York sports betting (1:18), news about Bet365 (6:05) and PointsBet (10:31), and some progress for Maryland sports betting. (18:44) Twitter puts out a ton of data on how much gambling and Twitter are intertwined, and we break down the social media’s place in the ecosystem. (20:44)
Matt Brown (00:12):
Hello, and welcome to episode number 162 of the LSR Podcast. My name is Matt Brown, joined each and every week by the brightest minds in all the gaming industry. With me, I have Dustin Gouker. I have the return of Adam Candee onto the podcast. You can follow those guys on the Twitter machine, and you should. It’s free. Just smash the button @dustingouker, @adamcandee, two E’s, no Y. If you hate yourself, you can follow me @mattbrownm2.
Dustin Gouker (00:39):
Before we get into this, how much caffeine have you had today? I know you’re always excited.
Adam Candee (00:43):
This is like a Red Bull day.
Matt Brown (00:45):
Hey, guys, listen, I don’t know if you guys know or not, there’s something happening on Thursday. It’s the start of a thing that is a big deal for me. It’s a good week. It’s a good week for me. I’m sure we’ll discuss that somewhere along the podcast here. Listen, we’ll talk some 365. We’ll talk some PointsBet. We’ll see what’s going on in Maryland. We’ll even get some gambling Twitter stuff from Dustin, as well. But first, Dustin, kick things off here. It is New York, and New York with a big, big number.
NY exceeds $10 Billion in online sports betting handle since launch
Dustin Gouker (01:18):
Just with last week’s report, we’ve just crossed $10 billion in handle in New York. It wasn’t that long ago that we were tracking the entire nation, and $10 billion would’ve been a huge number, too, in terms of the total handle in the US market. Now, New York is just blowing up our charts in terms of that $10 billion, just since they launched earlier this year, over eight months. Absolutely crazy number that I think we expected because it’s a big state, but just a lot going on in New York.
Again, this is the first full season of the NFL for New York. We expect there’s going to be, despite people saying they’re pulling back on marketing, going to be a push here in New York and the tri-state area up there with how much sports betting is going on. Should be interesting to see where New York goes with its first full NFL season. Again, they were live for the Super Bowl, but this should be a big deal. This $10 billion number also just kind of underlines the opportunity if any other state that’s bigger than New York — California, and Texas on the radar for later this year and early next year — in terms of legalization possibilities, just the sheer amount of money that we’re talking that’s going to change hands, if those happen as well, we’re at this critical mass where sports betting just really comes into its own in the US.
Matt Brown (02:40):
Adam, we’re looking here, I’m going to go ahead and call you a former New Yorker. I mean, I know that New Yorker always at heart, but former New Yorker. Listen, this number here doesn’t surprise me at all. Then as we head into the NFL season, we know the Super Bowl betting favorite is the Buffalo Bills. There is at least some sentiment that the Giants could be better with their new coaching staff and things that are going on there. There is at least some sentiment that they could be actually better. The Jets, we’ll talk about them maybe in a couple years. I think they’re on the right track, but that’s neither here nor there.
We might actually see futures liabilities in New York on the Bills. It’s got to be just insanity. I mean, we should probably ask a bookmaker what the liability is on the Bills from a futures market and all that. I mean, listen, there’s other ways to bet, the Giants or the Jets and things and whatnot. As we head into the season, not only we’re getting big numbers from New York, but with the way that the teams and the outlook looks right now, it could be really, really crazy.
Adam Candee (03:46):
The Flacco disrespect is palpable, and it disgusts me, sir. How dare you write off the New York Jets like that? But clearly the Jets and the Giants, not on the same level as the Buffalo Bills, and now we get the first full season of NFL betting, right? We don’t have apples and apples to compare in New York right now. We started NFL betting essentially in the middle of the playoffs last year in New York. That got to be something that kind of existed in its own vacuum. Now we’ll see what it looks like with a full season.
What I think is interesting, not just in New York, but elsewhere, is that we’ve had multiple books, Caesars notably, talk about pulling back on marketing spend, and New York does not feel like a great place to pull back on marketing spend. However, the question is, how do you make money there if you continue to spend money there with the 51% tax rate? New York is a really complicated web to untangle in understanding, OK, FanDuel has huge market share. They’ve made clear that they’re going to continue to spend because they have the heft of Flutter behind them to be able to keep spending and acquire customers who might go to another sportsbook for a bonus, and then come back to FanDuel based on the fact that they have demonstrated a superior user experience.
At the same time, you have eight other sportsbooks in New York that are competing for share, and some of them, this is a major opportunity for them like Bally’s, who doesn’t really have much to speak of elsewhere, right?
Matt Brown (05:18):
Adam Candee (05:19):
When I look at New York, I feel like we’re really in the first full sample size that we’re going to get from New York. I almost can’t compare it to what we saw in January.
Matt Brown (05:31):
It’s going to be super interesting for me. Again, I mean, it helps, too, when the teams are good and certainly the interest is high and it would take, I think, a miracle for the Bills not to be in it throughout the course of the season and to at least, as we head into the playoffs, be one of the teams that are one of the favorites to take it all down. You would think with that being the case, that New York is probably going to continue to just pound these markets and certainly get a ton of handle flying in each and every week on the squad. I am super, super interested in how that all plays out.
Bet365 finally live in second state with Colorado sports betting launch
Adam, let’s talk about … We’ve called it a sleeping giant. We’ve called it a, “Hey, are they ever going to actually take the next step?” We’ve also kind wondered, “Hey, look, is this one of those guys that if they decide to really splash around, could they be in contention for one of those kind of top three spots?” We’re talking about Bet365.
Adam Candee (06:29):
The question really, Matt, when we talk about Bet365, is how long are they’re content to just be Scrooge McDucks swimming around in coins in the UK and the rest of the world before they start throwing piles of those coins into the US? What we have this week is Bet365 finally launching in Colorado. They had initially said this was going to be a Q2 launch, but look, if you’re Bet365 and you’ve been doing this for as long as they have, you’re not a book that needs to necessarily get out there and work out the kinks during the slow season. You can launch right before NFL and not really have a whole lot of concern as to what your product’s going to be able to do. We see now a second state, they’re in New Jersey, they’re in Colorado. I had heard within the industry, they could have 10 states this year. That’s obviously not going to happen at this point.
Look, we wrote an article on this back in February with the dear departed Brad Allen talking to folks in the UK and elsewhere about will Bet365 ever make a big splash in the US? It seems like the consensus is yes, eventually, and we’re in an interesting time in the market right now. We’ve seen M&A come to almost a complete stop. We’ve seen valuations, let’s say, hold at best and sink in other places. Overall, maybe Bet365, much like ESPN, is going to sit on its piles of cash and wait for the best opportunity to get in and wait for some of the initial churn here to work its way out.
Matt Brown (07:57):
Yeah. It is super interesting, Dustin, because, I mean, listen, we’ve said, is there anything that some of these people could come in and offer that maybe everybody else doesn’t? I mean, listen, with Bet365, one, I mean, we know is just experienced. They’ve been around forever. They’ve been around since you and I have even been in this industry, whether it be through the poker side of things, through the sports betting side of things, through the casino side of things as well. I mean, the experience of being there. Honestly, if you mess around on their app and people that are listening to us in New Jersey already know this, their menu is at least a little bit more robust, just from an alternate betting standpoint. There’s different ways to bet the various sports on there. It’s the only place in the states that offers each-way betting on golf and different things like that.
I mean, can you differentiate yourself? Can you come in and make a splash because maybe you offer a couple of different markets? Maybe there’s something you got up your sleeve from doing this for as long as they have. I mean, listen, I know we keep saying this over and over and over again, but I mean, I really do believe that there is somewhat of a crack somewhat in the door there for Bet365 to kind of sneak in.
Dustin Gouker (09:08):
Yeah. I mean they have some secret sauce, that’s pretty clear, that they’ve leveraged into the position they have. We talked about Ontario. We believe that Bet365 is probably the largest operator, at least in sportsbook, in Canada, now that they’ve regulated and converted from the gray market. Yeah, I’m with you, I’m with everyone. Bet365, when they choose to do this, they will be a player. They will be a major player in all of this.
You hear all the news about striving for profitability. Does that mean over the next year that 365 really starts ramping this up, starts spending money? We don’t know. We have no insight into that. But if they see evidence of that, that there is a vacuum eventually in the ecosystem that they come in and start trying to acquire customers a little bit more aggressively, I think that’s definitely a scenario that can happen. Maybe this year, maybe next year, maybe not, but it’s coming someday. They are not going to just sit the US out and just be happy with a small amount of market share.
Matt Brown (10:11):
Listen, again, as an avid bettor, I hope that they continue to expand. Listen, the more options, the better for everybody. Honestly, more than anything, the more types of markets available, it’s better for everybody. I mean, that’s the one thing here is they do offer some markets that you just can’t find anywhere else, and I think that’s good for everybody out there.
PointsBet spent $118M on marketing in past year, holds 4% of US sports betting market
Dustin, one of the other sportsbooks that we often talk about here on the podcast, let’s just call them lurkers. I mean, they’re just lurkers. We always say, “Is someone going to buy them? Are they going to make a move? Are they going to buy someone else? What’s going to go on there?” What are we looking at here and what do we see in PointsBet?
Dustin Gouker (10:50):
Matt, you triggered a memory for me. My freshman year dorm, there was people down the hall, there was two guys, we called them the lurkers. They were just lurking around. I don’t know. You just triggered a wash of college memories for me. But PointsBet, earnings call last week, we got a lot of information about where they sit and maybe it’s not the most exciting story in the world, but they have a blended average of almost 4% in the US. Now, that’s obviously second tier by a lot. It’s not anywhere near the top four to five operators in the US. Also said they spent $118 million on marketing spend in the fiscal year, which, again, sounds like a lot of money, but not a lot of money in the grand scheme of things. But that amount of spend got them to 4% to 5% of the market, which as they say, as the CEO points out, they went from nothing. They had no brand recognition in the US, and they have carved out at least this. This is now their starting point.
What is the path to more of that? They believe in product. We’ve talked about that I think in the past. They believe in the live betting product, that that’s the future. We have lots of evidence that that’s where the US sports betting market is headed, that pregame match bets are … That’s where we started, but that’s not where all the action is. PointsBet, if they can provide a differentiated product, maybe they don’t have to spend a zillion dollars acquiring customers. That’s a narrative. There’s a lot of space between that narrative becoming reality and getting them more meaningful market share. Right now, I guess 5%, 4% is not the worst thing in the world. It’s a better starting place than a lot of other sportsbooks. It was interesting seeing all of that, again, more interesting data from our writers at LSR, Mike Mazzeo on the PointsBet call last week.
Matt Brown (12:47):
Adam, this is me just getting you to speculate here, but look, you’re a bettor as well, and I think I have a theory of my own, but one of the things we did have with PointsBet when they came in was they offered PointsBetting, which was a different type of betting, a different way to bet. We were like, “Huh, I wonder if this could maybe be something that kind of carves them out a place in the industry?” I anecdotally, and I’m sure you the same, anecdotally, I haven’t heard anyone that’s kind of fallen in love with it. I haven’t heard anyone that’s really into it. Why do you think that is? I mean, because it is at least intriguing if you have conviction on a game and how a game might go, there is a way to make more money by doing that. But I guess the flip side of that is if you’re wrong, you could lose more money as well.
Adam Candee (13:35):
You read my mind, Matt, because I was wondering, as we talked about PointsBet, when we would get back to talking about what was the core product that they spent the first six months in this market pitching. They talked to us all about it. In fact, I remember 2018, they were talking about the fact that they had someone win big. I think it was a Dolphins game, if I’m not mistaken, where they had someone do very well with the PointsBetting product and they were pushing that story out there.
My read on it is this. First of all, I think it’s hard enough for the average recreational bettor to understand the basics of betting in the first place. I think the PointsBetting product is something that takes a little extra effort to understand, and it’s hard enough to get customers in the door in the first place, and then you’re trying to get them in the door and getting them to understand a product that is much more difficult than what you have elsewhere. I think there’s a secondary piece to it as well because there are a lot of smart people at PointsBet, and former PointsBet people as well. They know that losing in PointsBetting and losing massive amounts in PointsBetting, and especially if someone didn’t totally understand what they were doing with PointsBetting, is a massive, massive RG concern, responsible gambling, and potentially a PR nightmare for them.
If you have somebody go out there and they don’t understand how to set the stop loss on that, they don’t understand how to say, “OK, I can only win X amount and I can only lose X amount,” which is available within that PointsBetting product. You can set the error bars on the ends of it. But what you can’t necessarily do is get back the credibility that you lose if someone comes back and says, “I didn’t understand how to do that, and I lost 50 grand,” blah, blah, blah. Now, I’m not saying that’s what PointsBet would be pushing. They were very clear from the beginning of all of this when I talked to Johnny Aitken I remember at G2E in 2018, he was saying, “Look, every person we sign up, we’re going to have someone talking to them about what the PointsBetting product is. We physically have someone call every person who signs up to talk about this.” They’re taking the steps they need to take.
I think they’ve made a very smart move here to pivot toward in-game and trying to eliminate downtime in in-game, to eliminate rejection in in-game, because much as FanDuel was the first one to pivot its marketing to, “We’re the ones who give you hassle-free payout and the quickest payout,” I think PointsBet similarly looked at the market and said, “OK, where’s another thing that maybe we can improve upon?” And we know that people complain all the time about how difficult it is to get a live bet down at the odds they want at the amount of money that they want without being limited, et cetera, and they hope that maybe that’s their path to either making a name for themselves or making a name that gets them acquired.
Matt Brown (16:19):
Yeah, I’m with you. Dustin, I think that it’s a pretty good point, right? I mean, at the end of the day, we always talk about, we are still, I guess, in the infancy of sports betting where people don’t even know what a moneyline is and what a spread is and what everything is. Trying to get them to grasp PointsBetting where it’s like, “Oh, no, it’s a variable payout and actually, it’s a variable loss as well,” it’s probably a little bit early in the adoption phase for that to really be hitting with the general masses.
Dustin Gouker (16:49):
Yeah. Differentiated products, but like you said, at the cost of you have to explain it to people. It’s hard. The other part of it, we talk about this a lot, people want to risk small amounts of money to win a lot of money. They don’t want to risk a lot of money to win a lot of money. That’s why we see parlay, it’s why people invest in lotteries. They don’t want that risk. They would like to lose a little bit of money for this chance of this huge payout. It’s anecdotal, and we don’t have a whole lot of data on this, but that’s the problem with the product from that standpoint and pushing into live game, again, that’s where they see their future, and that makes sense.
Matt Brown (17:27):
Yeah. I still think it’s interesting and intriguing. Adam, I don’t want to speak for you here, but I think if it was available, we would probably do it, right? I mean, at least dabble in it for games that we were fairly certain as to what we think is the outcome, we were super convinced in the way that this was going to go or something. I would probably use it if it was there, but would it become a staple, even for me who is a very avid better? I don’t know. Probably not.
Adam Candee (17:58):
I’ll give you an example, Matt. Go back to that Bills/Patriots game they played in the flood up in Buffalo last year with the biblical winds and all of that. If you’d opened it up and seen 42 as the total initially before that thing got bet down about a touchdown, if you were someone involved in PointsBetting, you might be willing to play that total as a PointsBetting setup where you’re saying, “Yeah, I think we’re going to go way under 42 right now,” as opposed to just risking the average minus 110, which by the way, we did hear that PointsBet’s going back to similar to something they did in the first year. You can correct me if I’m wrong on this, Matt. I believe they went all sides even money back in year one. I think they’re doing -107 this year on all sides.
Glacial online Maryland sports betting application process open at last
Matt Brown (18:44):
There we go. Listen, do what you can do, trying to carve out stuff in the space here. Adam, what’s going on over in Maryland?
Adam Candee (18:52):
Well, something, which is actually the notable part.
Matt Brown (18:54):
Which is good. Always good.
Adam Candee (18:57):
Yeah. It’s good. It’s like crabs speeding along the beach instead of just kind of slowly moving their pincers and threatening us. What we have is the application period for mobile sports betting in Maryland opening, which felt like it was never going to happen. We had early 2023, maybe even Q2 2023 pegged for Maryland. But then in the last couple of weeks, everything started moving, and it started moving for kind of a strange reason because this disparity study that had been ordered by the state legislature of regulators to see, “OK, how do we make sure that that minority- and women-owned businesses are represented and included in the industry?”
Essentially the study, after months, came back and said, “Yeah, I don’t know if there’s a way for us to do this.” The committee of regulators sent a letter to legislators saying truck emoji, “We can use some standards that are previously in place about net worth and how much net worth a person can have and what the amount of ownership they can have,” et cetera, et cetera. I encourage you to read Pat Evans’ article about that before I butcher it all when he’s laid it out so nicely.
But the point for anyone in Maryland looking to bet mobilely is that this application period will last 45 days. It has to be in by October 21st if you want to have mobile sports betting in Maryland. Then I believe they have at least another month to review those. If you game that out, you come to about Thanksgiving and you start to say, “All right, if regulators really have been preparing for this all along, would it be possible by the end of the year to have mobile sports betting in Maryland?” I would call it an underdog, but I would call it at least a better bet than it was two weeks ago when it looked like a 0% chance.
Gambling on Twitter
Matt Brown (20:44):
Everybody listening, rejoice right now over in Maryland that there is at least a chance here. I like that you said just a slight underdog, at least. Just a slight underdog. That’s good for us. All right, Dustin, this is something that I think that we probably know because of the industry we’re in, how we interact, how we gather and not only accumulate our news and opinions and things like that, but you have an interesting little thing here on gambling and gambling specifically on the Twitter machine.
Dustin Gouker (21:20):
We got some data from Twitter today. This is how big gambling Twitter apparently is. Twitter is putting out press about how sports bettors use it, obviously ahead of NFL season, that’s why they’re doing this. But a lot of interesting data. I guess it doesn’t shock me, but it is interesting to see actual numbers behind it. The top line number, seven out of 10 sports bettors are on Twitter according to, again, Twitter putting out some study of the data that it sees from sports bettors.
That’s, again, not shocking. It is the place where people share information about it. They are looking for information to real-time updates, things like that. Everybody’s going to Twitter for that. You’re not necessarily looking for written content. You are looking for a beat writer, a pick, a tip, anything of that sort. Again, not shocking that of all of the social media platforms, that Twitter is the place. We see this every week when a game is going on that people care about. I know when the three of us are watching, using Twitter as a second screen alongside a game, we’d see that. You’d see evidence of that. Again, maybe we over-index, you go out into the world, you can see that as well. That’s the top line, most interesting thing there.
They have a lot of other data that they provided that sports bettors on Twitter spend more on bets annually if they’re on Twitter. Sixty-two percent of bettors on Twitter place wagers weekly. Gives us some insight to, again, if you’re that invested that you’re using social media all the time, that you’re more invested in sports betting. Lots of interesting stuff. You’ll see a lot of ink dumped in this because they put this out there, and I’m sure everything from betting websites to just sports websites and social media sites that cover the industry are going to be picking up on this. But it is interesting to just see data behind how much Twitter and sports betting go hand in hand.
Matt Brown (23:18):
Adam, I was reading through this before we got going here, and honestly, this just makes perfect sense to me. I mean, everything that’s in here, I completely believe, specifically the seven out of 10 people that bet sports are on Twitter. I mean, listen, people ask me, “Matt, what are five things I can do to make myself a better bettor?” One of those five things that I say every single time is get a curated Twitter list of beat writers and things and whatever. One of the five pillars basically of sports betting for me is telling people to get that information where you have that stream flowing for you at all times, and as Dustin mentions, not just information. It’s getting other people’s opinions, it might be getting some tips, getting some fun facts along the way, different things like that.
I totally get it. We make fun of Twitter all the time because it is a cesspool sometimes for horrible opinions and whatnot and horrible people even. But it is, for the industry, a really, really valuable tool and really, really ingrained in the fabric of sports betting.
Adam Candee (24:26):
A little personal story here to illustrate what I’m thinking about what you’re talking about. I took a little time off here as we get ready for football season, and part of my time off is unplugging. I don’t look at anything. There’s no Slack, there’s no email and there’s no Twitter. Let me just tell you what a happier person I was not being involved in anything related to Twitter for the better part of two weeks. I’ve realized the toll it takes on my mental health. However, I also understand its value in the job that we’re talking about here.
I did check back in, by the way, for the first time in a couple of weeks to see that Legal Sports Report had reported that Kay Adams would be going to the new FanDuel TV. Just a quick aside to the spokesperson from that company who tried to put us off the story, telling us we were going to be sorry and telling us that we had bad information, maybe don’t lie to us next time about information that we have solid in running a story and then try to take us off a story that we know we have right. It’s bad business. It’s a bad way to interact with people, and you know who you are, and don’t do it again.
When it comes to Twitter, in particular when it comes to sports betting, here’s what I have to say about the effect on the industry. If you are out there trying to make social betting happen, it’s already happening. It’s just not happening within your company. Twitter already has it, and if you’re trying to recreate that experience within your app, you are going to fail. It’s not going to happen. Stop trying to make it happen because we’ve seen company after company think that they’re going to put functionality into their app that is going to help them build a community of bettors within that app, when we’re already hearing from Twitter that seven of 10 sports betters are using that platform.
Look, it’s the world’s social gathering place when it comes to real-time events. You can try to fight that if you want, but it seems to me that the first company that decides to work directly with Twitter to try to be able to curate something that goes along with them is going to be a lot more successful in the social betting experience than those that are trying to build it from the ground up. People are wanting to talk to a broad swath, not just the other people who happen to be on that app who are betting with them at the same time.
Matt Brown (26:42):
Dustin, look, you’ve run websites for years. I mean, I think what you and I over the course of time has found out, I mean, even when I was in the MMA industry, when I was in the DFS industry, before I was just full on in the sports betting industry, the utility that Twitter brings also is kind of like, “Hey, look, I could post something on my site, but it’s going to be irrelevant in a matter of either minutes, if not hours or something,” whatever. It’s not really worth posting something on the site, especially when people can just go onto Twitter to get that information anyway. It becomes the place where, yes, you can promote your own stuff that does have legs and is more evergreen or whatever it might be. But the fast-moving things in a sports industry, where things can change by the minute, by the hour, whatever, it might be, it’s one of those deals where, hey, look, it’s just better put on Twitter a lot of times.
Dustin Gouker (27:37):
I mean, especially for the gambling information. Although my mantra to Adam when he started was always have a story while we’re doing stuff for Legal Sports Report so that people have something to click on and engage with. I’ll also agree, Twitter is an awful place. I’ve taken breaks from Twitter, and my mental health has improved, but it is the place. Adam is spot on “stop trying to re-create social media for sports betting.” Not going to happen.
Again, this is the proof that you need. If this is your plan, stop. Look at this data, this is where it is. You’re not going to change the fact that sports bettors go to Twitter. For all the faults of Twitter, it is a great second-screen experience for watching a live sporting event. I have my little curated Phillies list where I lament with fans and see all the people who are lamenting what’s going on. Super Bowl, again, you’re just putting things out in real time, interacting with people. It gives you a sense of community and then sports betting adds onto that, for sure. It is the place. Stop trying to create social media for sports betting. It’s already here.
Matt Brown (28:45):
Yeah. Listen, I mean, if this was a shock to you, I mean, get on there. You can kind of find the utility. I mean, yes, again, we bag on Twitter as much as anyone because we do see the worst of the worst sometimes when it all comes out. Hey, here’s the problem, guys, we follow people who have opinions and that ends up being a cesspool for us with all that. But, I mean, you can make a list where basically you’re just following beat reporters or you’re only following whatever and you’re just using it for informational purposes. If you’re doing that, it is a very, very valuable tool. Unfortunately, Adam, I’ve over the years clicked follow on too many people and it’s like a drug, I can’t hit the unfollow button. I’m like, “What stupid thing is this person going to say next?” I just leave it on there. I don’t know what it is. It’s like Twitter has me when it comes to that.
Adam Candee (29:46):
Well, I believe that is what scientists call the Rovell effect.
Dustin Gouker (29:51):
We’re going to need you to name more names, Matt. Who are these people?
Matt Brown (29:54): Well done. That was amazing and a great way to go ahead and end this episode. Guys, everything we talk about here as always, you can find over on legalsportsreport.com, taking all the great words Adam and his crew are putting together over there. If you don’t already, if you’re watching this on the YouTube, go ahead and hit that subscribe button down below. We do appreciate you guys joining us on the video side of things. I know we’re not as handsome as we sound over the audio version, but, hey, it’s still fun. If you’re just taking this in over on the audio side of things, subscribe, rate, review. We really do appreciate that. @dustingouker over on the Twitter machine, @adamcandee, two E’s, no Y. For Adam, for Dustin. I’m Matt. Talk to you guys next week.