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PlayUSA’s ‘On The Record:’ Don’t Jinx NY Mobile Sports Betting Or The Mets

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You would think New York, one of the country’s most liberal states, would embrace a new progressive movement like mobile sports betting. The Empire State does a lot of talking on other progressive issues such as pushing ‘tax the rich’ initiatives, so one would think allowing gamblers to place sports bets on their phones would be a no brainer.

However, it appears there are more lucrative issues to deal with for New York Gov. Andrew Cuomo and his legion of Democrats.

So, unfortunately, for those who live in Queens looking to place a bet, the odds of New York mobile wagering happening anytime soon are, by my estimate, 4 to 1. Or about as good as the Mets winning the division in 2020 season.

Keeping New York mobile wagering at bay

The NY state senate has been on board with mobile wagering for quite some time. Even Assemblyman Gary Pretlow, a Democrat and chairman of the NY Racing & Wagering Committee, is in favor of legislation to permit mobile wagering. Pretlow has also publicly stated that he “has the votes” on both sides of the aisle.

So what gives?

When you look closely, there has been one man, one constant, that has held mobile sports betting at bay. And it’s not the governor but rather his gatekeeper, Assembly Speaker Carl Heastie.

Heastie told reporters in December, the only way to fix the $6 billion budget deficit is to cut spending or raise revenue.

“Unless money is going to fall from the sky, you’re always going to have to try to do things. And so when there’s a concern about having enough money, the two options always are, do you cut spending or do you raise revenue, and for us, in the Assembly, we always believe in raising revenue.”

Looking for free money?

Clearly, the money traveling across the border into New Jersey–where bettors can easily place a mobile wager on if the Mets will win more than 86 games this upcoming season–is of zero importance.

According to figures from the NJ Division of Gaming Enforcement, roughly 88% of sports wagers came via mobile or online platforms. To put that in terms of money, that’s over $557 million in sports betting handle and revenue of $29.4 million in December.

To take it a step further, last year, NJ sports betting accounted for more than $4.58 billion in handle, $300 million in revenue, and over $36 million going to state taxes.

“All that revenue [going to New Jersey] some have said, as much as a quarter of NJ sports betting revenue is coming from NY State,” said David O. Klein, a gaming attorney with Klein Moynihan Turco in New York City. “We are just giving that money away. Why not take the proverbial bite of the taxpayer pie and keep it here. That’s a great way to make up the shortfall.”

When asked what is more likely, a Mets winnings season or mobile wagering becoming legal, Klein, a native New Yorker and Mets zealot, was hesitant to answer.

“It’s a toss-up. Don’t want to jinx either,” he said.

What Cuomo says…goes?

When Cuomo called mobile wagering “irresponsible,” his legion of followers backed their king.

In his 2020 budget address, Cuomo said, “this is not the time to come up with creative although irresponsible revenue sources to solve a problem which doesn’t really exist.”

But according to Klein, money from sports betting is a lot more than chump change.

“Cuomo spoke that whatever is done is not going to make up the shortfall, and I respectfully disagree,” Klein said. “It’s more than just a drop in a bucket, it’s a little bit of a stream, and it certainly would help.”

Klein took his theory a bit further and said it’s not unimaginable to think NY sports betting could outdo New Jersey in time.

“I’d be shocked if New York didn’t surpass, very quickly, the annual sports betting revenue that New Jersey is able to realize. But obviously, it takes time and needs to be done correctly and carefully,” he said.

There was one thing Cuomo did do; he made sports betting in New York almost a mirror image of Mississippi sports betting by amending the Sports Wagering Lounge restrictions. It is unknown precisely what the rules will look like, but in theory, bettors might only have to make it on casino grounds to place wagers. This means, much like in Mississippi, customers are not limited to placing bets within the confines of a physical sportsbook, but rather the whole casino grounds.

It’s only January, but mobile sports betting is already looking like the Mets did during the first half of the 2019 season — lifeless.

“[Cuomo] has indicated in the past that to expand into mobile betting it may require a constitutional amendment to the state constitution, some agree, some disagree — I don’t want to say one way or the other,” Klein said.

With the clout Heastie wields as Assembly Speaker, and a Governor not willing to think outside the box, I’d say 4 to 1 odds are better than expected. But with a former Cy Young winner and a homerun champion on the roster, maybe the Mets have a shot. And maybe there’s a chance for a bill to make it to the governor’s desk — but probably not.

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PlayUSA’s ‘On The Record:’ A Cinema Expert On Why Oscar Betting Is Fun But Often Tricky

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I’ve always had a fascination with movies. Growing up in a small West Texas town, you spent Saturday night at a movie complex with only six screens. You arrived early to claim the best seat, grabbed some popcorn, a drink, and enjoyed the next two hours.

Now, with the legalization of sports betting across the US, you could say my film obsession is becoming more entwined with the daily fabric of my other vice — sports. In 2019, gaming regulators in New Jersey gave sportsbooks the go-ahead to accept wagers on the Oscars. The closest sportsbook to the south side of Chicago was 820 miles away in Atlantic City. However, since the rapid spread of legal betting, things have changed.

This year, Indiana has been granted permission to allow wagering on the 92nd Academy Awards, which arrives Sunday, Feb. 9.

My curiosity sent me on the hunt down for a film expert. Someone who could provide their perspective on this new type of betting. What better place to begin my search than my own backyard?

A conversation about Oscar betting with a cinema expert

I reached out to Tom Fraterrigo, a Professor of Instruction at Columbia College Chicago in the Department of Cinema and Television Arts. Fraterrigo has a list of credentials a mile long, so I was very fortunate when he called late Wednesday afternoon to provide a few thoughts on the subject.

The following interview has been edited and condensed for clarity.

Broadly speaking, what’s your opinion on wagering on the Academy Awards?
I’m fine with it. I know we don’t do it in this country, but I’m fascinated with the overseas sportsbooks and who they have winning political elections. So if [elections] are up for grabs overseas, I don’t think something as trivial as an awards show shouldn’t be up for wagering as well. So I don’t have a problem with it.

Does something like betting on the Oscars diminish the art form?
No, I don’t think it does. Cinema began early on as cheap entertainment for the masses and then evolved into an art form throughout cinema history. So I think the two can coexist.

Can someone who studies film gain a competitive advantage when it comes to betting?
I know film, I study film, I teach film, so I may have an advantage in terms of historical context, but I can tell you numerous times where perhaps my judgment would have been clouded by my knowledge of the art form. Over the years, there were certain films that I was shocked they didn’t win, and I probably would have wagered on them and lost.

What’s an example of such a situation?
In 1980, Martin Scorsese’s film Raging Bull was up for Best Picture, and it didn’t win. It was Robert Redford’s film, Ordinary People. That year, Redford won Best Picture and Best Director. Now, [Ordinary People] was a really good film and it was one of the best films of 1980. But in my opinion, and if you look at the AFI top-100 or other polls of great American films, Raging Bull is around the 4th greatest film ever made, and it didn’t win Best Picture that year and Scorsese didn’t win Best Director. I would have bet everything on those things at the time. So I don’t know if there would have been an advantage to someone in cinema education.

Is there any advice you can give to someone looking to place a bet on a film this year?
Bettors beware — because the voting that takes place with the academy members, they don’t necessarily screen all the films in their category that they are supposed to vote on. An example, a couple of years ago when Paul Thomas Anderson’s film Phantom Thread came out, that year Jennifer Lawrence, who is a voting member, said she turned off the movie after three minutes. The process itself is somewhat questionable.

Will the award betting trend spread?

DraftKings and FoxBet are the only two sports betting operators providing Oscar odds so far. This week, Indiana, which has two sportsbooks in close proximity to Chicago, became the second state to allow wagering on these prestigious awards.

The driving factor is the clout DraftKings has in the betting industry. Just look at New Jersey, where they dominate the space and over 80% of wagers are placed on a mobile device. Pivot to the midwest where Indiana, Iowa, Michigan, and Illinois (which in my opinion will become the future gambling mecca of the US) are all slowly starting to get sports betting up and running. Oscars betting will go as far as DraftKings’ reach, which in this case appears to be unlimited.

Money aside, if the second year of wagering on the Academy Awards is a hit — meaning people enjoy it and want to do it again — then I expect it to spread. But like Fraterrigo said, overseas books wager on political outcomes, what’s the harm in placing a bet on the film 1917 to win Best Picture?

For more information on this year’s Academy Awards betting, check out PlayUSA’s Oscar Betting Guide 2020.

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PlayUSA’s ‘On The Record:’ DraftKings Co-Founder Talks Sports Betting Domination, Plans

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Welcome to 2020 and a new volume of the PlayUSA series On The Record!

To kick off this new decade, I wanted to explore the explosive way DraftKings ended the year and attempt to understand what this means for the future of sports betting.

Ideally, you too ended 2019 with a merger announcement, a new partnership in New York, and the addition of New Hampshire to the sports betting portfolio — right?

You probably didn’t, but DraftKings sure did. Now, some might say — New Hampshire a state with a population of 1.356 million, what’s so significant about that?

Excellent question.

With the addition of the Granite State, Draftkings firmly establishes itself as one of the top sports betting providers in the Northeast. The company now has operations in New Jersey, Pennsylvania, and West Virginia and is starting its conquest of the Midwest with Indiana.

DraftKings now has five sports betting states, an established network of daily fantasy sports players, and on top of that, a new exclusive partnership with Madison Square Garden that includes the NY Knicks and NY Rangers.

And that’s not all.

The company is merging with sports betting technology provider SBTech, and both are being acquired by Diamond Eagle Acquisition, which is already listed on Nasdaq. Is that too much to process? If so, don’t worry. I found someone to help clarify all this information.

A brief discussion with DraftKings co-founder Matt Kalish

In addition to co-founder, Matt Kalish is also the chief revenue officer for DraftKings. I reached out to him and asked if he could answer a few pressing questions for me.

The following interview has been edited and condensed for clarity.

What does the launch in New Hampshire mean for the company?
As a New England-based company with our HQ in Boston, as well as a good number of employees who either live in New Hampshire or a short drive away, we were excited to win the opportunity to establish a presence in the Granite State. We are excited to have the opportunity to work with the New Hampshire lottery as the exclusive mobile provider in the state.

Are there any retail sportsbook locations you are looking to open in 2020?
As part of the deal with the New Hampshire Lottery, we will be opening some retail locations in the state. We are in the process of identifying appropriate sites for retail sportsbooks. Ultimately, we believe the mobile and retail sports betting experiences are complementary and work well together.

What is the next sports betting frontier? Is DraftKings monitoring any specific states?
We are keeping a close eye on every state that is considering legalizing or has legalized sports betting. We were excited to see bills progress in states like Michigan and Colorado. Our goal is to get a path to market, apply for a license, work to get regulatory approval for launch, and then go live as quickly as possible.

If other sports betting companies attempt to follow and become publicly traded companies, what does that mean for the future of sports betting as a product?
I can’t speculate on what other companies might or might do. But we think the US has the potential to become the world’s biggest sports betting market. Upon closure [of the deal], DraftKings will become the only vertically-integrated pure-play sports betting and online company based in the US. DraftKings is well-positioned to play a leadership role in the US market.

Where do we go from here?

Kalish is right when he said DraftKings is “well established to play a leadership role,” as the company is basically writing the playbook. You monitor a state, provide some testimony on a bill, apply for a license, and boom — you become the dominant force in the sports betting space. That makes the future of sports betting is anything but dim.

With Michigan now in play, and Illinois coming to the table, the Midwest is well-positioned to challenge any region as a sports betting hub. Expect it to become the next primary market as expansion steadily moves West.

The northeast market is far from done; there are still a few places that might get their five minutes of fame — Massachusets and mobile wagering in New York, to name a few.

The south will, eventually, become the crux of college football betting, which leaves us with Nevada and the west coast. So far, Oregon and Colorado have been soaking up the spotlight. But until the Golden State decides that it too wants to be part of the sports betting conversation, California will remain a glistening gem off in the distance.

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DraftKings, Nevada’s New Record, & A Congressman’s Focus On Tribal Betting

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We have hit the homestretch of 2019. A new year awaits.

It is a time to look ahead, to make resolutions, to leave the past in the past and move forward.

For some, however, simply putting 2019 in the rearview is not enough. They want to go out with a bang.

DraftKings merger makes waves

Turn back the clock to summer 2019, when Legal Sports Report caught wind of DraftKings standing on the threshold of a monumental deal.

Now, six months later, that deal has come to fruition.

The daily fantasy sports and sports betting power announced that it was entering into “a definitive business combination agreement” with betting technology provider SBTech and special purpose acquisition company Diamond Eagle Acquisition Corp.

Diamond Eagle already operates as a publicly traded group. Under this deal, Diamond Eagle would take on the DraftKings name. As such, DraftKings will become a publicly traded company.

This merger creates the only vertically integrated sports betting and online gaming company in the United States. DraftKings Sportsbooks is obviously a major player in the sports betting world with operations open in four states; SBTech has partnerships in five states. DraftKings currently leverages Kambi Group to develop its sports betting platform, but SBTech now provides the company with an in-house solution.

The deal is expected to close in the first half of 2020.

Nevada sports betting has a mammoth month

For those who thought the Nevada sports betting industry would take a hit because other states were coming online: think again.

The Silver State took in $614.1 million in wagers during November. It was not only a state record for that specific month but also a state record for any month in Nevada and national legalized sports betting history.

In fact, in no other month prior has a state sports betting industry exceeded $600 million in handle. The previous best for Nevada was $596.8 million, set in March 2019.

This data shows that Nevada remains a heavy hitter amid the ever-expanding world of regulated sports betting. Boasting Las Vegas as a destination certainly helps, as does the existence of online wagering. That said, other states have instituted better and easier ways for users to sign up for betting apps.

That at least cracks the door open enough for New Jersey and Pennsylvania, each of which features an online market that accounts for more than 84% of their respective state handles.

Congressman proposes tribal sports betting bill

As states continue to introduce and pass legislation legalizing sports betting, one Congressman has turned his focus toward Native American tribes.

Rep. Anthony Brindisi, from New York, has introduced bill HR 5502, which aims to “remove Federal barriers regarding the offering of mobile sports wagers on Indian lands when the applicable State and Indian Tribe have reached an agreement, and for other purposes.”

While not necessarily needed for tribes to offer online sports betting, it would definitely help clear the air. For example, there is the belief that the federal Indian Gaming Regulatory Act mandates that mobile wagering could only occur via servers existing on tribal lands.

This new legislation, however, would help eliminate such confusion. Per the bill, a wager occurs entirely on tribal lands if:

  • The person placing the sports wager and the server or other computer equipment through which the sports wager is accepted are in the same State
  • The applicable State and Indian Tribe have entered into a Tribal-State compact under the Indian Gaming Regulatory Act authorizing the placing of sports wagers through interactive sports wagering platforms

New York does not have online wagering available, although stakeholders remain persistent in correcting that; the state does feature retail sportsbooks run by tribes. Tribes also operate brick-and-mortars in OregonNew Mexico and Mississippi, and Michigan just legalized sports betting that would become available at 23 tribal casinos.

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PlayUSA’s ‘On The Record:’ The Small Business of DC Sports Betting

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Thanksgiving may be over, but this year entrepreneurs in Washington, DC, have something else to be thankful for: inclusion. Thanks to language in a DC sports betting bill, the District is the only place where small business owners can apply for a license to operate a sportsbook.

You don’t see this kind of gaming inclusion in other states but that doesn’t mean it can’t happen. But for the time being, small business owners like Shane August have the opportunity to exist next to big brands like DraftKings and FanDuel.

So in honor of the holidays, I reached out to August to see how excited he was for the opportunity to compete with the biggest names in sports betting. According to the Office of Lottery and Gaming, that chance will come on Tuesday, Dec. 3, when the application process officially opens.

A conversation with Shane August

August is the proprietor of Handle 19, a soon to be new Class-B sportsbook in the Adams Morgan neighborhood of DC. I’ve covered his journey from the moment he testified before the District city council prior to the passage of a sports betting bill. He’s one of the very few small business entrepreneurs who has taken this opportunity and turned it into a reality.

So the last time we talked you were excited about landing a retail location, can you give me a small update on what’s been going on?
Man, we are ready to go! All of the dots have been connected and the ball is really out of our hands. We are waiting on the lottery to open up the application process. If you go back, on October 17, 2018, I’m on the record to the city council saying we are going to be first in line. We still have that as one of our goals. It wasn’t easy but as soon as they open the application process, we are locked and ready to go.

Your sportsbook is called Handle 19. Walk me through it. What’s it going to be like walking into that space versus other Class-B locations.
Our competitors on the class-b side, they are just your local watering holes. From our market research, these bars & restaurants are going to install a kiosk here and a kiosk there — our approach is a full Vegas-style sportsbook. We put so much work into this location but now we just have to wait till we can apply. Our objective for the fans is, once you step inside our location we want you to forget that you’re in DC. We want you to feel as if you have entered a sportsbook in Las Vegas or Atlantic City. A lot of properties on the Class-B side are going to be bar’s that feature sports betting. We are going to be a sportsbook that features a bar.

There have been a lot of industry experts up in arms about this Intralot contract. What are your thoughts on the matter?
We try to stay out of that because it really doesn’t have anything to do with us. Once the bill was passed and enacted into law, we have just been focused on making sure our ducks are in a row so we can operate properly, effectively and in a compliant manner. But when they are fighting over the mobile contract, that really doesn’t have anything to do with us.

What do you say to other local entrepreneurs if they reach out to you for advice?
First of all, I have to take that phone call. I’ve been on the other side of that call before so I need to make it clear — anyone who needs information or advice on how to break into this market, I’m no expert but I’m more than happy to speak with anybody. Again, this is a new industry. This isn’t a fad or a wave, sports betting in American is here to stay. We need to encourage more people to get involved. If you have a passion for business and have a passion for sports and you want to break into this industry, I’m happy to talk.

In the DC market, what sports do you anticipate most people will be betting on?
I think it will be interesting because the DC sports betting market couldn’t be established at a better time. The Washington Nationals just won the World Series, The Washington Mystics just won the WNBA title, and the Washington Capitals are really competitive. I think from a local perspective you will get a lot of support just betting on local teams. People in DC are loyal but also, its the Nations Capital, so you have people from all parts of the country. Teams have crazy fan bases in DC. I think the market is going to surprise a lot of people so it’s import for us to provide as many betting options as possible.

What sports have you been following recently?
Believe it or not, I watch everything. With my cable tv package, I’m paying so much to watch sports, politics, financial markets, and the news. Right now my Saturdays are filled with college football and my Sundays with NFL football. The rest of the week, I have the NBA to kind of quench my thirst. I’m really just a fan of competition. For the most part, I’m like everyone else, on the couch watching sports.

A small business perspective on sports betting markets

As I mentioned before, inclusion plays a big role when it comes to the DC market. It’s unique. That’s what makes it different and worth watching. When you look at New Jersey, Pennsylvania, and even Indiana, they are dominated by the big brands.

“I think all the work they did to repeal PASPA, they didn’t do that so five or six companies that were already flourishing could flourish even more,” August said. “I think they did it to invite more entrepreneurs more businesses into the market place. That brings more competition which ultimately makes things better.”

August is right. The FanDuel’s and DraftKings of the world are busy protesting the lack of competition in DC when it comes to the mobile side of things. What about the underdogs of the industry who until now have been on the outside looking in?

Establishing a presence for DC sports betting

Handle 19 has taken the first steps to make sure they can compete at the highest level. On October 8, they solidified a partnership with Newgioco, a global gaming technology company based in Europe.

“It was a match made in heaven, I say that because they have some of the same principles and core values that we do,” August said. “Also, our level of aggression matches what they do. They are heavily established in the European market and they want to break in here and we are trying to do the same thing. So it just worked.”

On top of that, August told me he has had talks with the Washington Redskins who are looking to get involved with at the local level.

“[The Washington Redskins] want to get involved with a local sports betting location and we have been communicating with them throughout the year and we anticipate, once we are licensed we can bring them on and that will help drive traffic to our space. It’s been a long year but our work has paid off,” August said.

Perhaps all this will show other states that small businesses can run sportsbooks just as well as the big brands. That inclusion on every level should be part of the conversation. August has faith in that last part.

“Once we prove our concept in DC we are looking at other jurisdictions to really compete,” he said.

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