EPISODE 175 | LSR Podcast

Sports Betting Year in Review


27 min
Video preview

Sports Betting Year In Review | LSR 175

We look at the biggest stories from 2022 in the sports betting industry and also look ahead at what’s in store for 2023.

Full transcript

Matt Brown (00:09):

Hello and welcome to episode number 175 of the LSR Podcast. My name is Matt Brown, joined each and every week by the brightest minds in all of the gaming industry. With me, I have Dustin Gouker, I have Adam Candee. You can follow them on the Twitter machine, and you should; it’s free. @DustinGouker, @AdamCandee, two E’s, no Y. If you hate yourself and want to follow me, @MattBrownM2. Listen, we are going to just run through what we feel were the biggest stories here from 2022. We are off next week. This will be the last time you hear from us in 2022. We’ll be seeing you next year as the kids say whenever they like to go, “Ah, see you next year.” Yeah, that’s exactly what we’ll be doing here on the podcast.


As always, guys, if you’re listening to us on the audio side, really do appreciate any sort of rating, any sort of review. Really does help us get a little bit of cred over there in the app stores and things like that, helps people find this thing. And if you’re watching us on YouTube, hey, this is what we look like. Down below, hit that subscribe button. Really do appreciate it. I’m going to crank things up in 2023 here on the YouTube as well. So please do take advantage of all that. So with that being said, Adam, I want to kick things over to you. Give the floor to you and just talk about what you have off the top of your head as one of the biggest stories of 2022, what you thought maybe was one of the most interesting stories of 2022, and what you also are looking forward to here as we get later in the podcast, I’ll be asking you what you’re looking forward to in 2023.

Adam’s biggest story of 2022 / Promotions dying down

Adam Candee (01:32):

So I’ll kind of kick it off with one thing that I looked back on from last year and then one thing that I think really marks this year, and listen, we don’t get it all right on this podcast; sometimes we get half of it right. And that’s a good week if we get half of it right. But I will go back to last year and say we talked about the fact that WynnBET announced it was going to be pulling back from sports betting, and we said, “Is this the canary in the coal mine to the industry?” Maybe kind of right sizing a little bit and starting to get out of the insanity of huge promotional offers and just constant willingness to lose money in service of trying to gain customers when it became clear that only certain sportsbooks were successful in gaining customers and retaining them.


And that did prove to be maybe the biggest story of 2022 in the world of sports betting was that the craziness did die down, with the exception of, or just around a couple of launches like New York in particular where there were some major offers. And even that, even the Caesars $3,300 really was kind of the dividing line between here are the really insane promotional offers and here is when things start to go back the other direction a little bit. And so that to me kind of points to what we’re looking forward to from this year into next year. And as much as I don’t want to point to this as something that I think should have been the biggest story of the year, it’s very difficult not to look at The New York Times series and the fallout that is beginning to come out of it as the story of 2022 because it’s creating real momentum in areas both good and bad.


And I’ll leave it there because we have a lot to discuss about those things in particular. But I don’t think you have to look any farther than what’s going on with Barstool in Massachusetts right now and the level of scrutiny that they’re getting in only receiving a temporary license this week for their in-person sports betting in Massachusetts. Even though the law essentially said they’re clear to get one in the first place, regulators still have enough trouble with them in large part based on what they saw out of that New York Times article that they’re going to have to continue to investigate.

Matt Brown (03:39):

Dustin, as we take a look back here on 2022, what was one of the stories that really stuck out to you?

Dustin’s biggest story of 2022 / California and the state map

Dustin Gouker (03:44):

Yeah, I mean the biggest story for me is the colossal failure of California. We went into it thinking, “Man, this may not have a shot.” And I don’t know, that feels a little like … And I don’t know. That went from anywhere from coin flip to just has a chance, but it was embarrassing. The whole thing is now an embarrassing kind of stain on the sports betting lobbying effort, which was so successful up till now. There’s hardly a misstep to be seen in the lobbying effort for sports betting until we get to California, and we see under 20% approval of the ballot measures in California, which is hard to imagine. And from where I sit, we’ve set back the possibility of legal sports betting in California. And that makes it even worse. It would be one thing just to have lost, but then to have lost in such a way that makes it hard to see a starting point. That’s hard to stomach.


So we have basically taken the largest state on the map off the map for any reasonable time. Now there’s a possibility things get worked out, and we have a real shot maybe at 2024 with another ballot measure, but I’m not seeing it right now. And two years is a lot of time, but also it belies that. And that also belies, it also dovetails with what we’re looking at the whole year. Part of it is just the sports betting map. We didn’t see as many states legalize and come into this. Now the map of states that could possibly legalize online sports betting, obviously much smaller than it was four years ago. But the pace has slowed down. I don’t know. We have somebody recording these and telling us how we did on our projections. I think we’re about right on what we thought.


I think three to four states, and we had a little bit of momentum. We had Kansas launch, we have Ohio is going to launch on January 1st. We have Massachusetts legalized, but still we have all of this. And then that also dovetails with what Adam was talking about. Is this going to create headwinds for either changing laws or creating new laws in 2023? I think the answer is almost certainly yes, we’re going to see more of this. We’ve already seen legislation. We’ve seen regulators taking a fresh look at all of this and that’s that. And then as part of that, we’re looking ahead to 2023. Texas is the one. That’s the one we’re going to be watching. It is the biggest possibility of a state to launch sports betting next year or to legalize and then launch after that. So it’ll be interesting to see what happens there.


And we’ll have this basically three-month sprint early, the legislature meets for three months, then doesn’t do it again for two years. There is going to be a lot of eyeballs, a lot of money spent on this. The Jerry Joneses, the Mark Cubans of the world want this, it appears. It’ll be interesting to see. And then we’re a sports site, but I will say casino will have a chance. In several states next year. We’re going to see it come up in New York. We’re going to see it come up in Indiana for sure. So we’ll see if these companies that have been very focused on changing the map for sports betting, how much do they need to change to online casino to make a value proposition for them moving forward because they’re running out of states to grow in, and we’ll see what happens. So those were the things. The state map is really one of the big things as always that we’re watching both looking back and looking forward.

Matt’s biggest story of 2022 / Lack of major mistakes in the industry

Matt Brown (06:57):

Yeah. On my end, I think with the states, kind of the new states that have come online, and with this year also being the first full year for some of the states that got legalized in the previous year in 2021. I think for me, the thing that really stood out, and I’m not a shill, I’m not shilling, and I’m not sitting here looking at everything through rose-colored glasses. Everything was not perfect. But I think the lack of gigantic drops of the ball, which I just assumed would naturally happen in a new industry with no … There’s no uniform regulation, everything’s different state to state to state, all the different experience of the people that are running these things within the states and all the different stuff and stuff like that. Look, again, everything was not perfect. And then when it wasn’t perfect, we covered it on the site and here on the podcast.


But as far as just major drops of the ball where we’re sitting here going like, “Oh my God, if this happens again, this is going to be the death of the industry,” stuff like that. I assumed there was just going to be, I don’t know, major mistakes. Just huge, huge major things that came out somewhere along the way to where we were going like, “Oh my God, I cannot believe that. What are we even doing here?” And honestly, there wasn’t a lot of that, and that was actually pretty surprising to me. I thought that we would get to a point where we were coming on here almost weekly going, “Guys, what are you doing?” Like screaming at the microphone and banging our fists against the table.


And Adam, that’s not to say that we didn’t do that from time to time on here, but I think that does say a lot about, one, the regulation process, the vetting process. These guys that are running these companies, you don’t have to agree with the way that DraftKings and FanDuel and MGM and PointsBet and all that stuff runs their business and the different things like that. We can frown on some of the commercials and some of the advertisers, things like that. But again, as far as really, really screwing things up, I think we’ve gotten a pretty good year out of all of that.

Adam Candee (08:51):

I’ll push back a little bit on the idea that it’s been a great year because overall I don’t know that this was a terrible year, but I think it was the year that kind of marks where you’ve got to watch out. And I’ll point to Calvin Ridley as part of that. I’ll point to the DraftKings and BetMGM hacks as part of that. I’ll point to Barstool’s troubles as part of that. It feels to me like all of those things are what could create the headwinds. Was it this year that was the problem? No, there was no death knell kind of moment this year. But there were multiple moments this year that make me look to 2023 and say, if I expect one thing to happen in 2023, I expect that there is going to be rumbling at the federal level of some type of regulation.


And I think it’s going to be pointed at college, and I think it’s going to be pointed at being very, very clear as to what ages are allowed to be marketed to and allowed to be targeted. Because I think that’s the one place that everybody can come together is on the idea that college campuses are not the right place for sportsbook marketing, and if it doesn’t get handled at the state level or at the self-regulation level from the industry, I think you’re going to see at least some rumblings of this coming from the Congress level.

Dustin Gouker (10:10):

And while this podcast is not current events, I am looking at a press release right now from BetMGM with the CEO of BetMGM saying that some of their data was obtained in an unauthorized manner. This goes back to what’s been going on at MGM and DraftKings and some of the problems that users have had. Is this the scandal that’s like, yeah, that it’s so bad? But we now are to the point where MGM had to put out a press release about this. We’ve been calling for this, we’ve been doing this podcast and other forums. We’ve been saying we need some transparency on the issue. At least we have that MGM has firmly put out a full statement about what has happened and what was learned. But yeah, this is the kind of stuff, none of it is bad maybe on its own. This thing in a vacuum, yes, it’s not good, but it’s also all of it.


The New York Times piece is … Everything that’s come out of this, the scrutiny, it all feels like we’re coming toward a pullback, and that should be worrisome for everyone and hopefully it gets everybody also on the same page. And we always talk about the advertising stuff. It feels like there’s a critical mass where people don’t like that advertising. Ontario has been on and on about this since it launched earlier this year, as well. So it’s hard to put a finger on one thing. No, we haven’t had this giant scandal that has rocked the industry, but all of it adds up to it hasn’t been the best year for regulated sports betting rights.

Matt Brown (11:31):

Well, I guess my pushback to you guys would be, I was talking about from an operational level. I mean, the hack stuff’s a third-party vendor, the Calvin Ridley stuff, you could argue actually say that regulation was how we found out about all this and how he got caught. So, I mean, again, I was talking about just from the actual operators themselves where we’re sitting here going like, “Dude, guys, what are you doing?” And I guess we could argue the semantics of the Barstool stuff, which again, I think we’ve crapped on them enough on this podcast, and people know where we kind of stand from them, but they’re not a market leader in my eyes anyway. So it’s like I’m talking about basically from the market leaders where we’re looking and saying, “Man, you guys really freaking dropped the ball on this and this, et cetera, et cetera, et cetera.”

Dustin Gouker (12:12):

Adam might punch me through the camera if I bring up the fake death of a certain former New Orleans-

Adam Candee (12:16):

I’m not going there.

Dustin Gouker (12:17):

New Orleans quarterback.

Adam Candee (12:17):

I’m not. Yeah.

Dustin Gouker (12:20):

But it’s also not that bad, but it’s also awful. Again, all of it adds up, and I’m like, “Let’s all be better.”

Adam Candee (12:27):

And that’s what I mean when you talk about it on an operational level, “This is third party; this is regulation.” People don’t make those distinctions right outside of our bubble. And that’s what I’m kind of getting at in the end. I think if you are listening to this podcast and you’re someone within the industry and you’re saying, “Right, Adam, but Calvin Ridley shows that that’s what was snuffed out by regulated sports betting, showing up and being able to find it out.” Yeah, I absolutely agree with you. And when you look at what went on with the third-party stuff, with the credential stuffing, et cetera, et cetera, yeah, it’s all of these things that you can say, “Well, it wasn’t our fault. Well, it wasn’t necessarily someone at the operator level,” but those are not the things that ultimately lead to ending up with regulatory headwinds, and that’s kind of what I’m getting at.

Matt Brown (13:14):

Sure. Optics.

Adam Candee (13:14):

Yeah. That’s it.

Matt Brown (13:14):

And optics and perception is reality. Yeah, I do definitely understand that. I was just clarifying where I was … My statement of the whole … I was talking about just from an operational level where we were just kind of like, “Oh my God, I can’t believe it.”

Adam Candee (13:25):

You’re a shill. We get it. You’re a shill.

Big stories heading into 2023 / iGaming momentum and Texas

Matt Brown (13:26):

This whole deal is like I can’t even believe that this is going on. Dustin, you kind of hit on the two things I wanted to talk about as we headed into 2023 and really truly, I mean again, you mentioned we typically focus on the sports betting aspect of stuff. But listen, we cover the gaming industry with our sister sites in earnest and the iGaming stuff. Listen, we were over there, I was listening to the guys at G2E, Adam … We understand it’s probably down the road and probably these people talk about it a little bit, probably more rosy than they should because again, it’s all about investors and keeping the stocks up and different things and stuff like that. But I mean, there is momentum building and there is, I think, people are going to start making a bigger push with all of that. I’m not saying anything happens in 2023; I’m just thinking that the swell for that to come through in 2023 really, really starts to grow a little bit more as they feel more comfortable where they sit in the sports betting landscape and everything.


And then obviously Texas is just so incredibly huge. You hear of the massive names that are behind all of this. You guys have mentioned ad nauseum on here about the incredibly short window that they have to actually try to pull this off. But we can only assume that if you are only meeting every two years and it’s a state the size of Texas, Adam, they’re probably doing a lot of backroom dealings in the off year as it is anyway. So I assume stuff is kind of already getting done in the shadows here. But yes, all eyes certainly on Texas for me because that really is a true game changer. I mean, that is a true, true game changer. Massive amounts of sports, not only pro sports teams, but college sports teams. And of course as we know, I mean, just tons and tons of money in Dallas, tons of money in Houston, tons of money in San Antonio. I mean just a massive, massive state for all of this.

Adam Candee (15:14):

So I think you can take the four biggest states in the country and make a very clear distinction. In New York, there were some tribal concerns, but the tribal lobby does not have the power that it does in Florida and California, and Texas falls more to the New York side than it does to the Florida or California side. So when you look at the prospects for Texas this year, yeah, you can look at Jerry Jones and Mark Cuban and Tilman Fertitta and say, “You have three very powerful businessmen, very rich sports owners who want this to happen.” Now you also have conservative religious headwinds that are going to be pushing against legalizing, but our Mike Mazzeo just reported earlier this week that Lieutenant Governor Dan Patrick, who has been one of the prime opponents of sports betting, and obviously he is the overseer of the Senate, he might be softening on it.


We did not get a response from his office, but we got a multiple-source confirmation that Patrick’s office is going to be more open to this, and that at least could get it through the Legislature. And look, Texas is one of those states that is obviously a holy grail for the size and the interest and all the things you just mentioned, Matt, but this is a real litmus test because California, as Dustin mentioned, was a massive failure. I would add in that Florida was also a massive failure because of the fact that they couldn’t even get it on the ballot in California and the tribes were able to successfully essentially buy up all the signature gatherers so that nobody was out there to be able to get signatures to get it on the ballot. New York, we ended up having the leagues who were there to help make a huge push. So in the end, yes, Texas is the big one that is out there this year. California, Dustin mentioned 2024. I don’t think it’s getting done in 2023; I don’t think it’s getting done in 2024. I think last year probably set California back five years. And I will be absolutely stunned if we have anything inside of that timeframe.

Matt Brown (17:09):

Adam, I don’t want to steal the floor from you here on that. So outside of the gaming side of things, outside of Texas, is there anything in 2023 that you’re really kind of looking forward to as far as seeing either development, see if anything even starts to develop, whatever it might be?

What Adam’s looking forward to in 2023 / 4 clear market share leaders

Adam Candee (17:29):

The state level wise? No, because I think it’s pretty clear what we’re looking at in terms of the landscape. And obviously we have two-thirds of states that have some form of legal sports betting at this point. So it’s certainly diminishing returns now at the amount of investment that goes into that. Now, from the industry side of things, there are a couple things that I think are very interesting, and I’ll try not to take anything that Dustin would say off the table here. So I’ll just mention the fact that we now have four very clear market share leaders throughout the country. So what is the next step if you are one of those five, six, seven, eight level operators? Because something interesting happened this year in that we saw Fubo shut down. We saw Maxim shut down, and I thought these would at least be operators that were bought up for their database, for their tech stack, for something, and they didn’t. They just shut the doors.


And so what happens if you are PointsBet, if you’re Barstool, if you are with these second-tier operators that really have not been able to deliver a whole lot and who have shareholders to try to appease in some way, shape or form. So I think that’s one thing that’s extremely interesting to me is to see how established is this big four of DraftKings, FanDuel, BetMGM and Caesars, and will someone else be able to step into that? And I think the other thing that goes part and parcel to that, and I cannot believe it is the end of 2022 and we’re sitting here saying it again, but what’s ESPN going to do if anything, right? We talk about it and we talk about it and we talk about it. And I’m wondering if we’re starting to get to the point where we need to read the inaction as a lack of interest. I don’t know what else to say at this point. They can’t be moving this slowly thinking there is no opportunity. There’s obviously an opportunity, but I guess I’m just not understanding what the strategy is. And maybe that’s more of what it is that there isn’t a strategy versus me trying to infer what the strategy is or isn’t.

What Matt’s looking forward to in 2023 / Nevada

Matt Brown (19:22):

Yeah. One other thing here, and this is more just a personal kind of selfish thing because I know it’s a small blip on the radar as far as population, everything like that, but I am very, very curious to see if we just continue to see Nevada sit on their hands. I mean, because at this point-

Adam Candee (19:36):

Here we go.

Matt Brown (19:39):

But Adam, it’s one of those things where we were sitting here talking about this two years ago where we were going, “It seems like eventually they’re just going to have to do something because you look at all this and blah, blah, blah and all this stuff.” Well, it’s two years later and they have done absolutely nothing. And so I do wonder if we are just going to get to the point where they just don’t see a need, they don’t care to compete, and then finally something happens somewhere along the way and then one of these other operators gets able to come within the state and absolutely take over because it’s just … I mean, if you guys are in any of the rest of country states and you have never tried the online experience, and I say online, I only mean app experience because you can’t bet through a browser window I might add.


So there’s only an app experience in Nevada. It is absolutely atrocious compared to what you guys get. And I mean, it is light years behind. The technology is years dated, years behind of all of those things. And I just wonder if they’re just kind of like, “Eh, to hell with it, whatever. I mean, we’re Nevada, it is what it is. So long as California doesn’t get legal sports betting, we’re always going to get those guys coming over. So eh, whatever.” So I’ll be interested to see if nobody has any inkling at all about trying to innovate and try and keep up with the times here. Dustin, any closing thoughts from you?

What Dustin’s looking forward to in 2023 / online casino growth

Dustin Gouker (20:54):

I mean, you trying to wish it into existence is not going to give you the apps that you want, Nevada. I mean it feels just done now. It’s like, yeah, if Nevada was going to be embarrassed by being behind on the times, that time’s passed. You’re obviously behind the times on online betting. It’s not even close. Everybody’s realized that or they’re still OK with that. Plus we have the casinos that just don’t want it, like stations don’t want it. The only caveat I have is that, and this will dovetail into my final thoughts, what Adam was saying, but MGM and Caesars are now also digital companies. Like, yes, they make most of their money, but I will tell you, earnings calls had nothing to do with online gambling four or five years ago, and now they spent a lot of time. This is their growth path.


Yes, do they care? Are they willing to do that fight in Nevada? But at some point, this is where they have a lot of business there. They have brand awareness. Maybe again, Adam will also tell you, I feel like it’s never going to happen in Nevada. I feel like we should just stop talking about Nevada as a possibility unless something changes because it’s the micro lobbying efforts there. But the big thing, again, it goes into this, these companies are now digital companies, those big four, DraftKings, FanDuel, then MGM and Caesars are different. They’re casino companies that have built on a digital arm. They need to find other ways to grow. And that is going to be online casino. I believe that. I think they’re pushing … Indiana, I can tell you, there’s a real lobbying effort going into Indiana because they think that is the best chance. There will be a real lobbying effort in New York.


And for me then in that and beyond even that big four, it is still a big two. We have been talking about sports betting isn’t over in the United States. The industry still has a lot to suss out, but we’re now into the four years. FanDuel, clearly number one, DraftKings, clearly number two. And MGM has carved out a nice business for it. Caesars, pretty good, but once they’ve pulled back advertising, I think we’ve already seen that they’re struggling as a number four. Who is going to come and compete with DraftKings and FanDuel? I don’t know the answer to that. Now, Fanatics will tell you that’s them. They are hiring a zillion people every day apparently. We haven’t seen the sportsbook yet, but they are. Washington Post did a big story about Michael Rubin and what they have planned. Can they come and change the game?


I’m not buying that until I see more out of them. So the story remains, people keep saying, “Oh, it’s not solved. Like DraftKings and FanDuel aren’t number one and two forever.” Who’s going to come and take it away from them? Because MGM and Caesars again have carved out good business for themselves but are not coming right now for DraftKings and FanDuel. Barstool is still around the air, a little more than around the air in the larger sports betting industry. PointsBet, almost a rounding error. It’s still a very small part of the business. I don’t see where these companies come and take it from DraftKings and FanDuel because those two companies still are willing to spend way more money to acquire and retain customers than everyone else. So that’s the story. I think we probably have the story every year, but who’s coming for FanDuel and DraftKings and can it be Fanatics or someone else?

Wrap up and appreciation

Matt Brown (24:06):

Guys, we’ve done 175 episodes of the podcast. It seems crazy that we’ve done that many of the podcast. Awesome time watching everything grow, watching things launch, watching new guys come in and out at the staff over there, Adam with you, and really starting to … We get the new site over there now, all the relaunch, all the things like that. Dustin, you making time each week to come in here and do this despite the fact that you’re running all the operations on the content side at this point, keeping up with all the news and everything going on. True testament to you as well.


Adam, I’ll let you kind of close things out. You and your guys over there at LSR, week in, week out, day in, day out, grinding all of this stuff like that. It really does serve a purpose here for the greater good of the industry because a lot of people don’t have time to listen to these things and read these things and do all this stuff and do the digging that it takes to come up with even just a few hundred word article. That’s the thing that people don’t really even understand sometimes, that even though the length of the article might not be forever and you’re not scrolling forever, it’s hours and hours of work that go into digging in and calling and trying to get return calls and getting quotes and things like that. And it really is, it’s service to the entire industry as a whole.

Adam Candee (25:19):

Well, that’s very kind of you, Matt, and I’m not going to add a whole lot to that other than to say we have a growing team that is doing a fantastic job of keeping up with all of these things. They get the credit because they’re the ones who are in the arena every day. Dustin and I just had a conversation offline about the fact that with all of these meetings happening in Massachusetts, we finally have a big enough team that we can all pass it around and everybody can take a turn listening in. It’s great because sometimes we get different perspectives from people who have different knowledge sets, different things they remember and so on. So we’re thrilled that we have the opportunity to do it for you for another year. And I know it’s cliche that you listen to an end-of-the-year podcast and you’re like, “We’re so thankful you’re at …” No, we really are. We really are. We’re not talking about the most exciting things in the world here. Maybe they are for you in the industry. They are for us inside the bubble. We like to get into the weeds on all these things, but hopefully you get a little something out of the 20 minutes you spend with us every week.

Matt Brown (26:13):

Yeah, I really do appreciate each and every one of you guys that listen week in and week out. Julian obviously our fan that has listened to every single 175 episodes out there.

Adam Candee (26:22):

Multiple times.

Matt Brown (26:23):

Yes, special shout out to Julian and really do honestly appreciate the kind words each week, him letting us know that we’re putting out some good stuff as well. So for the final time here in 2022, for Adam, for Dustin, I’m Matt. See you guys in 2023.

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