EPISODE 164 | LSR Podcast

Who Ditches the NFL?

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23 min

Who Ditches The NFL??? | LSR 164

Welcome back to the Legal Sports Report Podcast, Ep. #164! PointsBet steps away from Sunday Night Football, letting in BetMGM and inviting questions from the crew. Plus, the latest on Prop 27 spending in California, good news from Maryland, and no news from Massachusetts.

Full transcript

Matt Brown (00:12):

Hello, and welcome to episode number 164 of the LSR Podcast. My name is Matt Brown. I’m joined each and every week by the brightest minds in all of the gaming industry.

Matt Brown (00:20):

With me, I have Dustin Gouker. I have Adam Candee. You can follow them on the Twitter machine for free, and you should, @DustinGouker, @AdamCandee, two Es, no Y. If you hate yourself, you can follow me @MattBrownM2. We do appreciate all your little subscribes and ratings and reviews, and all the different things like that. If you’re watching us over on the video version, on YouTube, hit that subscribe button.

Matt Brown (00:40):

Hello. Welcome. Thanks for joining us here on the channel. We’re going to talk about what’s going on over in California with all those ads; if you’re living over there, you are seeing a ton of those; what’s going on in Maryland, Massachusetts.

Matt Brown (00:53):

Adam, let’s kick things off here with some Sunday Night Football news.

BetMGM replaces PointsBet as SNF Football Night In America sponsor

Adam Candee (00:59):

Every week, we have one of those stories that I say to you guys, “I’m kind of surprised this didn’t get more attention” That’s the one that we’re talking about right now, with PointsBet stepping back, MGM stepping in as the odds presenter and sponsor for Sunday Night Football. We can boil it down to something very simple. Who leaves the NFL? This doesn’t make a lot of sense to me in terms of what’s going on.

Adam Candee (01:24):

PointsBet has said officially that it’s scaling back on its national presence, and that it’s going to advertise more regionally. BetMGM obviously already in a place to step in with the NFL, and gets now one of the most popular programs every single week in all of, not just sports, but in all of live programming, period.

Adam Candee (01:46):

This brings up a number of questions. Of course, we’ve talked about PointsBet ad nauseum, I’m sure, for some, in terms of will people see this as an acquisition target, will they see it as a company that … What is the future there?

Adam Candee (02:01):

Well, this is not something that, to me, speaks very highly of the long term potential for PointsBet. Because to go back to the point I made earlier, who leaves the NFL, especially when you’re trying to make a name for yourself in the US sports betting market?

Matt Brown (02:18):

Yeah. Dustin, if we take a look at this, it’s one of those deals where … We talk about island games just from a content perspective. We know that everybody is far more in-tuned with the island games, the island games being Thursday Night Football, Sunday Night Football, and Monday Night Football games, where there’s no competition. They’re the only game in town. They’re on national television, so everybody has access to them.

Matt Brown (02:39):

It is one of the places where, if you are a PointsBet, you are guaranteed eyeballs, because it doesn’t matter what the matchup is; it is one of the most viewed games of the week every single week.

Dustin Gouker (02:52):

Yeah. I guess this points to it’s not effective, or PointsBet just doesn’t see the cost. We’ve talked about PointsBet, between 3% and 4%, I believe, of market share nationally. Is this not moving the needle for them? I guess that’s a possibility. But yeah, this is something that you should think, from a branding perspective …

Dustin Gouker (03:13):

To the reverse of that, people were going gaga when DraftKings is on Amazon. I saw five bazillion stories about that, and people talking about it and getting buzz. So there’s a little bit of a disconnect between that and this.

Dustin Gouker (03:30):

BetMGM, as it’s pushing into more relevancy, and trying to not just be a top five operator, and push into DraftKings and FanDuel for that number one, two position, it’s weight on the scale there, for sure.

Matt Brown (03:45):

Adam, as we take a look here, just from a BetMGM perspective, we know they are one of the ones that still … tons of advertising. We still see the Jamie Foxx commercials and whatnot. So we know that there are different initiatives here with them, where they’re going the celebrity route. They’re not really going over-the-top trying-to-be-funny type stuff. They’re just doing the more like, “Hey. Here’s a celebrity. Go bet,” type deal.

Matt Brown (04:09):

But you now come in with this Sunday Night Football partnership, and you just start to wonder, “Okay. What does this mean for MGM?” We had heard maybe all these books were going to start pulling back on spending. We thought that maybe this was like, “Okay. We’ll go into more retention than acquisition mode,” whatever it might be. But it does make you wonder if maybe there was even a shift in philosophy, right?

Adam Candee (04:29):

It does, to some degree, but I think it also speaks to what the Sunday Night Football opportunity is, Matt. It’s what you mentioned already. Island NFL equals dollars, one way or the other, for someone. If you’re MGM, and you have that opportunity, you have to step into that space, no matter what you’ve decided your overall spending plan is.

Adam Candee (04:49):

Keep in mind, for PointsBet, this is part of a larger deal they had with NBC. PointsBet and NBC have a big tie-up. You would think Sunday Night Football is about the most attractive piece of that tie-up for PointsBet. But now BetMGM comes in and takes that place.

Adam Candee (05:03):

In terms of operators pulling back, BetMGM’s played the middle a little bit. Caesars has been the one that’s been very loud about how they accomplished what they wanted to in New York, how they’ve pulled back on national ad spend. Whereas FanDuel has basically said, “Yum, yum. Give me some. If you’re going to back off, we’re going to take those customers from you, and we will continue to push.” They’ll continue to push in a different way, talking about payout and ease of getting that payout, and talking to a more mature, sophisticated customer. So in the end, I think for BetMGM, it just presented too good an opportunity not to jump in.

Prop 27 campaign switching tactics in CA sports betting push: Report

Matt Brown (05:38):

Dustin, let’s head over to California. I actually, just anecdotally, got a taste of this, because as I have the California feeds coming in for the different baseball games that I watch during the day, I actually started to see all of the California ads about sports betting and things like that. I didn’t really even know what was happening over there until I got a taste of it for myself. But it looks like maybe we’re going to see some of that backing off just a little bit over in California.

Dustin Gouker (06:09):

Yeah. Dare I say, and Adam can correct me, I say this is probably a bad sign for the prospects of California’s online sports betting in the short term.

Dustin Gouker (06:20):

What we’re seeing is Yes On Prop 27, which is the prop that would widely legalize online sports betting in California, they are pulling back on their advertising push with just basically a month and a half left to go before the ballot is in front of California voters. So we’re seeing … They’re going to pull back from major media markets, targeting LA still and then not doing as much across California.

Dustin Gouker (06:46):

You can maybe read tea leaves and think they’re giving up. Well, we’ve seen some polling in California that made it look bad for Prop 27 as well. So good news, you don’t see as many ads, but bad news, if you want online sports betting, might not be a good omen for California.

Matt Brown (07:05):

Adam, we look at the California stuff. I know you watch all our baseball as well. You’ve probably seen it on the various feeds and things like that. It actually was. There was a ton of different commercials, certainly on all sides and things like that. Then stuff that you and I probably look for, like at the end of the commercial, seeing, “Paid for,” and who it was paid for by, and then you see all the sportsbooks listed, and all the different things like that.

Matt Brown (07:28):

I’m sure you have actually had a firsthand experience of what all was going over in California as well.

Adam Candee (07:34):

Well, the most interesting part for me, Matt, was doing a hit with the public radio station in LA this past week, and talking to not only the host, but to some of the callers as well.

Adam Candee (07:47):

I can’t believe how many people didn’t know this has anything to do with sports betting, because the Yes On 27 ads are all about homelessness, and funding for that and mental health, and the No On 27 ads are a lot more about tribal sovereignty, and about out-of-state companies coming in and making money off Californians.

Adam Candee (08:08):

There were people who called into that show and said, “Until your program today, I had no idea this had anything to do with sports betting.” You know what? That is clearly a deliberate strategy on the parts of the Yes On 27 folks, the sportsbooks who are trying to get online sports betting passed.

Adam Candee (08:25):

Now, this news that came out, first reported the San Francisco Chronicle, that they’re going to pull back outside of LA, you can look at it a number of ways from a political perspective. One is that they’re kind of saturated at this point. They spent a lot of money throughout August and September to get awareness of this issue up to where they wanted it.

Adam Candee (08:45):

Now, you also could look at it and say they’re running short on money, but that doesn’t seem to be the case. What we’ve seen … Matt Waters had a story the other day that said, “We’re over $400 million on both sides for funding the most expensive statewide prop in state history for California and beyond, actually.”

Adam Candee (09:02):

So I look at it and say to myself, “Okay. I can buy a little bit of the fact that you’re redistributing your spend, but I’ll tell you from the perspective of someone having been in politics, right before early votes starts is not really the time to be pulling back on your TV spend, because you want to be present with people right before they go out and begin their early voting.”

Adam Candee (09:25):

So maybe there is more coming here. Maybe it’s not going to be a full pullback. Maybe they’re just looking at this time of year and saying, “Okay. We’re going to take three, four weeks off here and really ramp back up closer to the election.” But referencing the polling Dustin talked about, yeah, right now it’s feeling like it’s going to be no on both, in terms of what we’ve heard and seen from polling and anecdotally.

Dustin Gouker (09:46):

Yeah. To follow up Matt’s reporting, like Adam said … They’re going to do more into digital advertising, direct mail. Again, I agree. Adam and I have both been in politics or studied politics, at least on my side. Yeah. Giving the share of voice on TV to No On 27 feels like, yeah, maybe you’ve been saturated, but you’re now just ceding voice to that. So it’s fraught with peril.

Dustin Gouker (10:14):

Maybe pivoting will change their fate. Yeah. If direct mail is getting a totally different audience than the people who watch sports and who are … If it’s not really focused on online sports betting, then maybe that makes sense, I will say. I’ve gotten more direct mail, I think, in recent days on politics than I have in the past, for whatever reason, even in a world that’s more and more digital.

Dustin Gouker (10:37):

So we’ll see. But the people who are behind these propositions, and the lobby, and trying to get these passed, they make a lot of money to do that. So they’re on the hook for the decisions here, in terms of them being the right ones to get their prop, the yes or no on both 26 and 27, through.

Top regulator says Maryland online sports betting could launch this year

Matt Brown (10:55):

Adam, we were looking at Maryland, and we were trying to figure out what’s it looking like. Is it looking good? Is it looking bad? How are things happening over there in Maryland? Everybody, and I say this, all of the two people that I know that live there, are really wondering what’s going on over in Maryland. So what are we looking at here? Are things actually looking up?

Adam Candee (11:19):

I want to say yes, and the top regulator in Maryland says yes. Yet, I’ve watched Maryland for two years now, and so I’m hesitant to say yes, because it has been such a struggle to get any progress in Maryland.

Adam Candee (11:32):

Basically, let’s sum it up with this. Maryland’s top regulator told Pat Evans, from Legal Sports Report, that he believes sports betting will launch before the end of the year for legal mobile operations. He believes December is almost a certainty, that November is a possibility.

Adam Candee (11:48):

Now that being said, this is the same state that took 18 months on a disparity study for minority and women to own businesses, and said, “How do we do a better job of making sure that these businesses are included,” and then basically sent a giant shrug emoji back to the legislature and said, “I don’t know if we’re going to be able to do that, so maybe you should just go ahead with this thing.”

Adam Candee (12:09):

So here we are. The committee met today and said that the timeline that they put out there of later this year is still a distinct possibility. So Maryland went from maybe spring 2023 to probably during this NFL season.

Matt Brown (12:28):

Mm-hmm, yeah. People would also see you shrugging, if you’re watching on video…

Still no MA sports betting timeline after latest commission meeting

Matt Brown (12:36):

Dustin, what’s up in Massachusetts?

Dustin Gouker (12:40):

Yeah. Kind of the reverse in Massachusetts. We’re seeing no good news in terms of when we’re going to see a launch there. We’re getting held up right now by some regulatory issues in terms of how this is going to roll out.

Dustin Gouker (12:59):

Massachusetts, which a lot of people not named us were handicapping to move really quickly, possibly, into legal sports betting, licensing language is really holding this up in terms of there’s … The legislature passed something that allowed for temporary licenses to take place in Massachusetts ahead of full licensure. But the way things stand, almost anybody could get that. But then the regulators are saying, “We could have to come back and turn you off based on there’s not enough full licenses for to go.” So they’re working on possibly a legislative fix, the regulator working with the legislature to figure this out.

Dustin Gouker (13:37):

But the regulators are often beholden to, “This is what the law says,” and they don’t have wiggle room. So they’re trying to figure out what the right thing is to do. Also points to the fact that writing legislation’s not easy all the time, especially when you’re doing gambling, and the fact that we haven’t seen more problems, possibly, as we’ve rolled out gambling legislation across the country, there’s that.

Dustin Gouker (14:01):

I think we expected, by this time in September, to at least know when a launch day was. But as we sit here, we don’t know a whole lot about exactly when Massachusetts is going to launch, until this issue gets freed up to let people know what’s going on with both temporary and full licenses in Massachusetts.

Matt Brown (14:18):

Adam, I want to take things home here, get both of y’all’s opinion on something. I’m going off script here, guys, so forgive me for hitting them with something that they haven’t had a chance to prepare for yet.

How are sportsbooks tackling in-play betting during NFL season?

Matt Brown (14:29):

But I’m very interested, it’ll be a delay for sure, but I’m very interested in September 2022 numbers. Because Adam, here we go with several states getting their first full taste of being able to bet from the very beginning of college football season, the very beginning of NFL season as well. Then as we know …

Matt Brown (14:48):

Now, we are heading into week three, things can be different in the NFL. We are only heading it a week four in college football, so things could be different. However, through the first few weeks of this season, a ton of upsets and a ton of unders on the NFL side of things as well.

Matt Brown (15:04):

One thing we know is Joe Public likes to bet favorites, and Joe Public likes to bet overs. So far, that has not been happening in the NFL and even in college football. We’ve had some really huge major upsets in the first few weeks of the season.

Matt Brown (15:18):

I am very interested as to what kind of numbers we might see come out of September of ’22, because as long as there isn’t something wackadoodle here in week three of the NFL, I think we are going to see some pretty monster numbers come out for this month.

Adam Candee (15:36):

Matt, I think you probably know quite well that we’re here at week three, and all spreads are within seven points, because look what’s happened the first two weeks, with some of the craziness that’s gone on in the National Football League.

Adam Candee (15:49):

For those of you out there on the interwebs who like to scream at us about handle reporting versus revenue reporting, well guess what, you’re going to get some fun revenue reporting numbers this month, because this one’s going to be much more about hold than it is about handle. We’ll look at the handle numbers, but the hold numbers could be nuts.

Adam Candee (16:05):

There was one sportsbook that said … They had one game, I believe it was Cowboys/Bengals, that the swing on Cowboys/Bengals going to the Cowboys was eight figures for them. Eight. Not seven figures, eight figures for them on the Cowboys pulling the upset on the Cincinnati Bengals.

Adam Candee (16:24):

So Matt, I appreciate the fact that you’re going off script, because I actually was going to go off script with a question for you, since you didn’t get to weigh in last week on Pinnacle getting licensed up in Ontario. I know that your history with sports betting goes deep enough to know the significance of an offshore the size of Pinnacle trying to make its way into the North American regulated market.

Matt Brown (16:48):

Yeah. The interesting thing for me is just does that … We’ll find out real quick whether that model transfers over to the casual sports bettor. Do they care? Do people care? That’s the thing.

Matt Brown (17:02):

We’ve seen, I think, with how popular the sportsbooks are here in the States, anecdotally for me, with my friends that have gotten the new taste of being able to sports bet in Louisiana and all that stuff like that. The best number, the best price, the best all the different things that matter to the 1%, and I might even say less than the 1%, the half a percent of people who really take this super, super, super seriously, and that matters to them and matters to their bottom line, I just wonder if it’s going … I wonder if people care.

Matt Brown (17:34):

I would like to think that as we get more sophisticated and the market matures, that people will care about things like that. I just think early on, probably not. I think, honestly, probably not when it all comes down to it.

Adam Candee (17:47):

Yeah. I thought that would be something that would be very curious to talk to someone who … You do a good job of understanding both the pro side and the public side with all of this. I think there’s going to be a decent little divide in there, much the way there is when we talk about Sporttrade launching in New Jersey, and the fact that now we have a legal exchange in the US. I think that’s going to be another big divide as well.

Matt Brown (18:08):

Yeah.

Matt Brown (18:09):

Dustin, from the exchange standpoint, for me, listen, if there was liquidity … It’s the same thing we talk about with online poker. Online poker’s never really going to thrive here until we have 20 states up and going, and they all have compacts.

Matt Brown (18:24):

The same deal with the trade. I think there is a potential for that to work, certainly. Matchbook over in the UK is actually a fairly popular site that a lot of people that I know, anecdotally, use for sure. But without the liquidity to come in and make it a viable marketplace, I just don’t know how … I don’t know the path to success, honestly.

Dustin Gouker (18:45):

Yeah. There’s a lot to unpack. It still goes to early days. People are still just learning about how to bet at a sportsbook.

Matt Brown (18:51):

Yeah.

Dustin Gouker (18:51):

Introducing another model on top of that … Maybe these exchanges, maybe it caters more, or talks or speaks more to a day trader who understands this. But you’re still having to speak the sports betting parlance. There’s a lot to unpack. On top of that, yes, ring-fence for liquidity, that’s rough. Can that be overcome? Right now, we’re just one market for these new exchange products.

Dustin Gouker (19:14):

But yeah. This is all interesting. The numbers … I’ll go back to the numbers, your initial question. It’ll be interesting to see. Does this move the needle? We’ve seen a lot of ink spilled about props are the way forward, but we also see these large decisions on these spreads. So there’s something a little bit discordant there in terms of that, which one comes out.

Dustin Gouker (19:38):

I saw ESPN published, there are about a bazillion people betting on Aaron Judge props right now, with everything going on around him. I’ll also throw in there DraftKings has been running these promos. You win your bet on the money line. Guess what. There’s been a lot of games where they had to pay out both sides.

Matt Brown (19:58):

Yeah.

Dustin Gouker (19:58):

That’s maybe not great. They got a lot of pub, they got a lot of people betting, so they acquired a lot of customers around this. But it’s going to show up in the revenue here as well, not just the handle.

Matt Brown (20:10):

Adam, just to put a bow on that as well. Listen. With the same-game parlay stuff, typically, people are betting these same-game parlays the same way that they bet these four and five leg other parlays and stuff. They’re not really necessarily trying to correlate these things and whatever.

Matt Brown (20:28):

So with upsets, and things going awry, and all these unders hitting, because of course, in these same-game parlays, it’s over this, over that, over this, over that, I imagine the same-game parlay market as well, as we continue to just talk about from a revenue standpoint, at least in these first couple of weeks, has been absolutely amazing for these sportsbooks. Because again, with all the unders hitting, with all the offenses outside of Miami not really clicking and stuff, it’s got to be one of those deals where they have just been eating those things up as well.

Adam Candee (20:59):

C.R.E.A.M., get the money. Dollar dollar bill, y’all on same-game parlays, without question. Look. We know that historical hold in Nevada, we’ve used this number over and over again, 5.4%. That’s about an average hold in Nevada. We’ve seen that actually grow in some places over time. Look at New York is at about 7.5% in its short lifetime so far.

Adam Candee (21:24):

Then we look at the fact that most parlays end up in double digits every month in terms of the hold. You get a month like this, when it comes to these multi-leg parlays in the NFL, we could be talking about 20, 30% hold just on those particular parlays, if we would get that number broken out. So those operators that are trying to build those in, and copy what FanDuel started, are probably doing pretty well.

Matt Brown (21:48):

Yeah. It’s going to be super, super interesting. I can’t wait till the numbers come out. We’re going to certainly talk about September 2022, so long as things don’t get completely wacky this weekend in the NFL.

Matt Brown (21:59):

Guys, you can follow Adam and Dustin on the Twitter machine, @AdamCandee, two Es, no Y, @DustinGouker. Of course, subscribe, rate, review; Apple, Spotify, Stitch or Google, all the places that you get your podcasts. And of course, if you’re watching us on YouTube, we do appreciate it, and also hit that subscribe button. Certainly going to be doing more with the channel as well.

Matt Brown (22:17):

For Adam, for Dustin, I’m Matt. Talk to you guys next week.

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