Puig pleads guilty | Maryland gets legal sports betting | LSR 171
MaximBet is ending its US operation(01:18), and if you didn’t even know it was a thing, we wouldn’t blame you. We also talk about former Major League Baseball player Yasiel Puig’s guilty plea in relation to a case about an illegal gambling operation (06:39) and the upcoming launch of Maryland online sports betting (11:31).
Adam Candee (00:16):
Hello and welcome to episode number 171 of the LSR Podcast. Thank you so much for being here with us this week. I’m Adam Candee, sitting in the host chair for Matt Brown. Dustin Gouker joining me as always. You can find him on Twitter @DustinGouker. Find me @AdamCandee, two E’s no Y. And if you love yourself, if you think you’re a wonderful person, if you believe in everything that you are doing right now, you should follow our friend, Matt Brown, @MattBrownM2.
Maryland is about to launch mobile sports betting. A famous athlete, again, has been involved in sports betting when he shouldn’t be. Dustin, we’re going to talk about some action in terms of sports betting that was happening that is no longer going to be happening, and it will start with MaximBet and the announcement that came out today, that as of December 15, MaximBet is going to completely cease operations and shut down.
MaximBet closes their doors
Dustin Gouker (01:18):
Adam Candee (02:44):
Bro, you had sportsbetting.com and you turned it into MaximBet. I can’t imagine having essentially the McDonald’s brand and turning it into Clown Burger. That’s essentially what they did. And a couple things I think this points out, Dustin, in particular, one, the two sportsbooks that we’ve seen call it quits recently, Fubo and MaximBet, both tried to come at this from a completely sideways angle, right? Fubo, understandably, wanted to be able to do integration with its broadcasts. That makes a lot of sense. It’s just that the technology is nowhere near ready to be able to do that. The latency issues alone make it next to impossible. Then you talk about what’s going on with MaximBet, and all the communications that we got from Maxim were always about the lavish parties that it was going to throw and the lifestyle brand that it was going to build. Right, where’s the sportsbook? Where’s the core product that is going to keep people there? People are not showing up to a sportsbook for the party at the Super Bowl.
Now, I’ll admit, when I was in my early twenties, I was a Maxim magazine subscriber, and I had a number of issues stacked up, looking like a library, in my house. And the very first time I had a girlfriend come over and look and go, “What exactly is that?” was about the last time I was a Maxim magazine subscriber, at the time. And I say that all to make the point that, I think you’re talking about a very narrow demographic that you’re trying to appeal to in the first place and a narrow demographic that doesn’t have a lot of money. And so there were just many different ways where this deal never made a whole lot of sense to me. And, again, as of December 15, essentially what they’re going to be doing is telling everybody, “Hey, you’ve got until then to get your money out and this thing’s going to be over.” Otherwise, they didn’t even sell what was there to someone else, which we thought was going to be the way a lot of these things went. I don’t know what’s there to sell.
Dustin Gouker (04:45):
Yeah, I mean, we have the numbers. They were only operational in Colorado. $18.7 million in a handle. They spent almost $4 million, made just a little under $2 million. Obviously, those numbers are not great. And if you’re not committed to it or have a lot of money to spend, we’ve said this a number of times on this podcast, if you’re not committed, and clearly, they were not committed to growing this because they weren’t launching in other states. They did spend a lot of money on marketing, I guess — $4 million to get $18 million just in wagers is a lot. So they actually did spend a lot of money. But it just underlines how hard it is, that you’re competing against giant war chests, well-known brands, and if you don’t have anything different, if you’re just … Again, basically they said Maxim is a good brand. We had Nicki Minaj, had a baseball player, Charlie Blackmon was endorsing them. It’s just not enough. You have to have either a lot of money or something really differentiating you. And, obviously, really, neither was in play here for MaximBet.
Adam Candee (05:51):
Right. And what you bring up I think is a great point about having something different. Well it was different. It was just different in the wrong way. You can look at even a PointsBet and say they came in with the points betting product. When’s the last time you heard about the points betting product? They don’t pitch that. They don’t talk about that. You’re still really in a stage of the US market where you’re trying to educate the average person about what a spread is, what a moneyline is, what a total is. And I guess, more importantly, what a same-game parlay is, as we see a lot of results coming out here and earnings calls talking about those. Now, people placing a number of bets, not a problem for Yasiel Puig. In fact, Dustin, he placed a lot of bets. What exactly happened with the former Dodger in terms of his involvement in betting when he shouldn’t be?
Former dodger betting when he shouldn’t be
Dustin Gouker (06:39):
Yeah, so dropped early this week. Yasiel Puig, best known for his time with the Los Angeles Dodgers, pleaded guilty to a count of making false statements to federal authorities around a case that we’ve reported on previously about an illegal bookmaker operation. This is a case going back awhile now with a company promoting illegal gambling through websites and in-person bookmaking, and all of this. And Puig got caught up in this. Now he’s not a material part of this, he doesn’t run the operation. He’s literally pleading guilty to making false statements, for not being honest with authorities who were interviewing him in relation to this case. But yeah, he was making a lot of bets. He ended up owing the company in question that’s under investigation or was indicted, $282,000. Paid off some of that. Made more bets. Was betting on not baseball, but pretty much everything else. Well, we don’t actually know for sure that he wasn’t betting on baseball, but that’s what he said. But yeah, it’s the weird world of sports fan we live in now. Puig was not in Major League Baseball now, but was betting on games while he was a Major League Baseball player. And, as we all know, quite the no-no, especially in the world we live in now. Even though we just talked about the aforementioned Charlie Blackmon endorsing a sportsbook in the US.
So yeah, the latest, also it came out, his agent made a statement today talking to an outlet saying he was confused, he didn’t have a translator, lots going on. So it’s clearly trying to walk back that he was really trying to hide anything. But he’s pled guilty to this. He’s up to five years in prison for all of this, and I don’t know what to make of it. We knew Major League Baseball players, of some sort, were caught up in this. And I know you and I, in the initial reporting about this, were speccing on that. But Puig we did not know was involved until all of this came and dropped this week. So it’s interesting and it also makes you wonder if there are any other baseball players who were betting at this operation, seeing as the person who was running this sportsbook, this bookmaking operation, was involved with Major League Baseball and former Major League players.
Adam Candee (09:05):
Yeah, and I think we actually learned a couple of really interesting pieces to fill in the details of when we covered the initial plea agreements around Wayne Nix and everything else that happened with this ring that was going on for more than 20 years. Some of the most interesting things we saw were that Wayne Nix had former Major League players acting as agents. Basically acting as the go betweens between some of the athletes and the book. We learned the identity of one of those people. Erik Hiljus, a former Major League Baseball player in his late forties, apparently was one of those people. And what you just mentioned with Puig, he’s nearly $300,000 in the hole. He puts $200,000 in, gets the account unfrozen, and then places 900 bets in the next three months. And no, I’m not making that number up. Nine hundred bets. And part of what we heard, in the initial plea agreement, where we said, “Wait a minute. What?” Was that an athlete had had the account frozen and brought in enough money to have it unfrozen and then went back to the well apparently 900 times.
So I think we’re probably … I don’t know, I’m not going to say probably. I think we’re probably … Just said it again. Going to get more about this story coming in here over the next little bit. Puig’s obviously the headline. But this gambling ring that we have covered in the past, it’s quite notable. And I will apologize for the multiple probablies. For those of you who have not been on the Legal Sports Report site today, we relaunched the site today. My brain along with Dustin’s is exceptionally mushy here at the moment as we go through all of the technical side of getting the site redesigned and some new organization and so on. Go check it out if you haven’t yet. We’re proud of what’s up there and looking forward to the next generation of LSR. But, of course, nothing changes here on the podcast. We push forward with everything that’s happening. And one of the things that apparently is going to happen before Thanksgiving, Dustin, is the launch of sports betting in Maryland online. Congratulations to us. If you wanted to coast your way in news coverage through next week on the holiday, ain’t going to happen because they apparently approved the first 10 mobile sportsbooks to launch today.
Launch of sports betting online in Maryland
Dustin Gouker (11:31):
Yeah, so we’re just that one step closer. Yeah, announced licenses have been awarded and that means, after this week of testing, we believe that as soon as this time next week, that online sports betting will be finally live in Maryland. And as dedicated readers and listeners of the podcast will know, this has been going on for a long time. We are 2022 … November 2022, referendum passed in Maryland and here we are after Election Day in November in Maryland and we’re just now launching online sports betting likely next week. So the end of a long road. We’re going to have a lot of major operators. Looks like it’s going to be, should be a pretty exciting launch, right in time for Thanksgiving betting on the Thanksgiving Day games. We’ll see. But we do have, yeah, finally end this long road in Maryland that we’ll have something and we’ll see. We know the ongoing problems in DC around sports betting. Not a very compelling offer there in DC. Virginia already has sports betting. Maryland, really, on all sides, there’s been sports betting all around them. So it’ll be interesting to see how they do. But obviously they’ve had retail sportsbooks at the casinos around the state as well. But full online sports betting with a number of the top operators should be coming online next week.
Adam Candee (12:48):
Yeah and you mentioned the DMV area, in general. Obviously we know how disappointing DC has been. We know there are a lot of Maryland based commuters who go into DC for work. And beyond that, keep in mind that as we talk through the election results from last week, Councilwoman Elissa Silverman, who was proposing the bill to open up sports betting to a competitive bid and keep Intralot from getting another extension, lost her reelection bid. And so we’ll have to see what happens with that bill moving forward. It did have co-sponsors, so it wasn’t her alone pushing that, but she was obviously one of the most vocal advocates for opening up the DC market. And that makes this Maryland launch, I think, that much more important as we look forward to the future in the mid-Atlantic and what sports betting looks like there.
What is happening in Texas?
All right, we have to talk about Texas, Dustin. We’ve, once again, had a bill pre-filed. Carol Alvarado has tried this multiple times, but, after what happened in California and considering that Florida is still caught up in the legal process with the compact between the Seminoles and the state, I think Texas is going to get even more attention, probably even more money, lobbying dollars, et cetera. Setting up to be the battleground of 2023.
Dustin Gouker (14:07):
Yeah, I mean, it’s the one that’s, we’re going to follow the closest and it’s going to happen quick. It happens right away. We’ve already seen a constitutional amendment proposed that would require two-thirds majority for both houses and then voter approval. What else is out there? We’ll see. But yeah, this is the highest stakes battle. California, over. And, as we’ve said on this call, maybe for years, I mean they’ll try, but I’m not sure how they do it. Florida, stuck in legal limbo. I think, yeah, we’re going to be looking at Texas as this is the big opportunity and I know sportsbooks and the online gambling companies outside of online casino, this is their growth. This is the biggest state on the map that is realistic in the very short term. So you’re going to see a lot of lobbying. You’ve already seen, we’ve heard sportsbook folks … Jerry Jones, Mark Cuban, they’re invested in this. They want to be part of sports betting in Texas. And those are obviously some very important people if you’re looking at it to help push this, move the needle, get lawmakers to say, “Yes, we want to do this.”
So, as you and I know, though, three months, that’s short. That’s a really short time to get anything done. Texas only meets every two years, only has this three-month period in which they can get something done. So we’ll see. I think there’s a lot of people who are optimistic about it, but it may or may not be the time for Texas. If they can coalesce people around this, leadership and everything in the Legislature, you got a shot. But certainly we’re going to be covering this more than anything else because it’s the biggest prize on the map, in terms of population.
Adam Candee (15:47):
And I think the biggest difference from what we saw in California and what we saw in Florida is that you do not have the same tribal interests involved in Texas that you do in California and Florida, where they have sovereignty over tribal gaming. Or I should say, over gaming in tribal casinos. And so Texas presents a very different challenge now. It’s still a challenge. You look at the election and see that Greg Abbott was reelected as governor. Beto O’Rourke had come out and said if he were to have been elected governor, he would have endorsed sports betting. And we’re not really sure if Greg Abbott will come out on the side of it or not. You’re talking about having to get two-thirds majority in the Legislature and then go to the ballot and get a majority at the ballot. So it’s a heavy, heavy lift when we talk about getting sports betting accomplished in Texas. That said, one of the major obstacles that was faced elsewhere when it came to the tribal opposition, not quite the same in Texas as it is in the other two major states that are still hanging out there here at the moment.
Another player gets suspended for betting
Dustin, it’s been a wild week when it comes to sports betting in the US and around the world. I want to go back for a second to the Yasiel Puig situation and just flesh this out for a moment because we also saw Ivan Toney, forward from Brentford FC in English football, be suspended today for placing bets. And I just kind of wanted to get your thoughts, in general, as it goes to when we take Puig, when we take the Toney situation, and then we put Calvin Ridley in there as well. And do you think that this is a matter of leagues needing to do better education? Do you think we are just catching more of this because there’s more regulated sports betting now? What do you think is going on here and what should be done moving forward?
Dustin Gouker (17:41):
Yeah, I don’t know, I mean, it does feel like we had two in a very short space between soccer and baseball being involved here. So maybe, in the moment, it feels like there’s a lot. In the grand scheme of things, there hasn’t been a lot of this. There’s no real excuse that players shouldn’t know this, right? Like why are you getting involved? Especially in baseball where Pete Rose is out of baseball because of betting. I just don’t know how you put your livelihood on the line. Again, Puig now out of Major League Baseball but was certainly in baseball when this was happening. Why do you … It feels like that must mean education, right? Because if you’re willing to put your career on the line … If Puig had continued playing well, he’d still be in Major League Baseball, and then we’d be having an entirely different conversation right now about his future with a Major League team, I think. But why do players not understand it’s not worth the risk? I think the leagues have been very clear at the top level. Is that getting lost in translation? And again, especially as they get involved with sportsbooks, they want nothing to do with this. They want nothing to do with players betting at sportsbook apps.
We also had, in the interim, this player at Virginia Tech who placed $400 in bets at FanDuel. And that one, I don’t know if I care. He’s not betting on college football. The NCAA then suspended him for nine games, taken down to six games. But he also self-reported. But it also just feels like something’s being missed in education if even this handful of people … If this handful of people is happening, that means there’s other ones, I think, that were clearly not being caught either at regulated or illegal books. So I don’t know. I’m curious to think your thoughts too, because I see it as we’re missing it on education, I think, at the league level if these things are still happening, this long into regulated sports betting in the US.
Adam Candee (19:34):
And that’s kind of why I wanted to get into the discussion because I think we can talk about it from the league level and say, “OK, we need to take a closer look at education.” Now, you can educate everybody you want and there can still be a bad actor or two who decides to go their own way. Just because one person placed a bet in one sport and we’re talking about one in baseball, one in football, one in soccer. There’s going to be this, always. There’s been this, always, for a long time, and we talk about having bookies and operating with offshores, like there hasn’t been any consequence to this because a lot of it could be done more in the shadows. And whether it’s because of the Nix case getting busted, whether it’s because of Calvin Ridley placing his wagers through a regulated sportsbook, I think it’s becoming more and more clear that these things are going to come out into the light.
And when we talk about the market for the US, I know you and I often feel like we are old men yelling at clouds, but there is a perception that grows when this happens, that it is a bigger problem. That, oh my God, and we hear this story and we hear that story and we hear that story. And it all adds up to a narrative of, wow, we need to do something about this. That’s when Congress gets involved. That’s when it becomes harder to regulate at the state level, et cetera, et cetera. So I bring the topic up largely because I wanted us to have a chance to say, “This is everyone’s problem.” This is not a problem just at the league level. This is not a problem just at the athlete level. Agents need to be smarter about this when it comes to talking to their players. College programs, obviously, need to be involved in it. But it also comes down to the sportsbook level. It also comes down to the operator level and being able to know who they have betting with them, as we talked about with Calvin Ridley and his girlfriend and so on and so on. So I’m not here proposing solutions, which, of course, makes me a good member of the media. But here I am just saying it’s a much bigger problem, I think, and a much more broad ownership problem than what is often presented.
Dustin Gouker (21:40):
Yeah, and I think you dismiss all of it at your own risk, right? Yeah. And again, I’d even forgotten about the Virginia Tech case being on top of this with everything, but yeah, we have basically a college player, a former Major League Baseball player, and a soccer player overseas, all in the space … This is the kind of stuff that gets people’s attention when you start mashing all that together, right? That’s a lot. And when you’re used to not hearing a whole lot of controversy about sports betting, yeah, I’d say over four years there’s been things that have happened that have not been good in the regulated sports betting industry, but we’ve largely avoided this. And even all this is not even necessarily connected to that. Puig was not betting at a legal site, but he’s clearly betting in the post-legal era and still doing this at a legal site. I don’t know. It does add up. It feels like if you have something else out there come out that’s big, it creates this critical mass of, OK, there’s a lot of players betting on stuff, and maybe we don’t want that.
Adam Candee (22:37):
Yeah. And I guess this is just my way of saying get it together. Everyone involved, let’s get it together.
Dustin Gouker (22:44):
Adam Candee (22:45):
We’ll get it back together next week with our buddy Matt Brown. Catch everything at legalsportsreport.com, on Twitter @LSPReport, with the redesigned site, and lots of cool new things coming at LSR. For Dustin, I’m Adam. See you next week.