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00:00Welcome back to Newswire, time for us to check in with Pat Evans from Legal Sports Report.
00:07We got some updated news on the company Betway, they are bailing from action here in the United
00:11States.
00:12We'll get to that here in just a minute, but first let's check in with Pat on the very
00:15latest on DraftKings.
00:16Pat, thanks for coming on the show.
00:17I read this yesterday and so here is kind of my question.
00:21So I see that DraftKings is getting fined $100,000 and I also understand that you guys
00:27reported that it was for reporting inaccurate sports betting data.
00:32Why would a company get fined $100,000 for reporting inaccurate sports betting data?
00:37What is it specifically that would lead to that?
00:40That's what I don't understand from this.
00:41Yeah, so this is kind of an interesting case.
00:45DraftKings, you know, came out, they responded to the letter from the New Jersey regulators
00:50and said it was a coding issue that kind of accounted for parlay bets from other bets
00:57and so it skewed the numbers a little bit.
00:59Under their argument, they said, you know, it doesn't really affect the overall revenue,
01:04it shouldn't affect the state level taxes, all that stuff.
01:07But the regulators came back and said, well, no, it did affect our reporting.
01:11We put out bad numbers for the first time in at least 13 years.
01:15We had an issue of correction and, you know, DraftKings now says they fixed the coding
01:21from the new kind of program they were using at that point.
01:25Yeah, I mean, basically, it comes down, it seems like New Jersey regulators are just
01:30really upset they had to, you know, issue a correction on some misreported numbers.
01:35It is a huge fine for New Jersey.
01:38I think they also issued a fine from 2022 yesterday for about $2,000 to FanDuel for
01:43a violation.
01:44So, you know, that shows kind of the discrepancy and how serious they're taking this issue.
01:50And the chief regulator had some really strong words.
01:54You know, I urge people to go read that story at LSR and kind of read her quotes, because
01:58it kind of takes DraftKings to task, even though they've tried to come back and fix
02:03everything as best they can and, you know, correct their wrongs.
02:07But yeah, it's a pretty significant fine from New Jersey on DraftKings, and it shows how
02:13serious the DraftKing regulators or the New Jersey regulators are taking this issue.
02:17Yeah, DraftKing regulators, not as much, apparently, from this point.
02:21Okay, so let's dive into, you know, it looks like we're going to go through 2024 on the
02:27very quiet side for sports betting being legalized, at least for the second and third quarter,
02:31third and fourth quarter.
02:32Let's get to Delaware here.
02:33What's the latest on their bill to pass?
02:35So yeah, Delaware just went live with their online sports betting offerings through Brett
02:39Rivers and the lottery earlier this year.
02:41But around the same time, a legislative report came out from a study group that was allowed
02:47last year or created last year that said, hey, let's open this market.
02:52We need to open up to more operators.
02:53We can bring in more tax revenue that way.
02:56And so, you know, a bill was introduced this session to say, okay, let's go beyond the
03:00lottery.
03:01Let's allow the three casinos in Delaware to each have two skins that would, you know,
03:06provide pretty much the base level national operators that we're seeing in most states
03:11come in and have a nice robust market there in Delaware.
03:16But it did not gain any traction in the legislature.
03:19It just kind of died with the session.
03:21So we're at least one more year of just a lottery monopoly and Brett Rivers in Delaware
03:26with online sports betting.
03:28Kind of what it looked like was a lot of legislators kind of had hesitancies to pass it because
03:33they were like, well, we just launched.
03:34Let's see what it can do as just a monopoly before we really try to mess with the market
03:39at all.
03:40So like you said, we're not seeing very much action in terms of new markets or even expanding
03:44markets and Delaware staying the same this year.
03:49Okay.
03:50Finally, let's get to the story that broke this morning.
03:52I saw Mike Mazzio report this on social media, and I'm happy to have you on, Pat, to follow
03:56up.
03:57Two companies, Betway, who I've heard of, Sahara Bets, I could not even have told you
04:01that Sahara Bets was even around in the United States.
04:04No disrespect to them, but I had never heard of them.
04:06Betway, I think are more popular because I see their logos and everything on these soccer
04:11matches in European leagues and things like that.
04:14Did they just not have success, Pat, here in the United States because they announced
04:17that they're no longer going to be operating here?
04:19Yeah.
04:20So Supergroup, the Betway owner, has decided, and this was kind of hinted at back at the
04:26beginning of the year or even late last year when I met Waters, kind of was doing some
04:30digging into earnings reports and stuff, and Supergroup kind of hinted at the idea that
04:35Betway would be pulled out of North America.
04:38And sure enough, today we get an announcement that Betway's going to leave the nine states
04:44they are live in just because, as the CEO put it in the statement, we just don't see
04:50a long-term path to profitability.
04:53And I mean, in the nine states they're in, they've got pretty small market share, single
04:56digits, low single digits.
04:58And so yeah, that just kind of shows how DraftKings, FanDuel, BetMGM, Caesars, the big names, they've
05:05got plenty of kind of market share to make things work and kind of fix things around.
05:11But when you're playing at numbers that low and you're a big European operator, it's not
05:16so great.
05:17I mean, this is at least the second big European operator that we've seen pull out of North
05:21America late last year.
05:23Unibet or Kindred pulled Unibet out of North America.
05:27And so it just kind of goes to show you that just because you're big in Europe doesn't
05:31mean you're going to be successful in the U.S.
05:34And that is to say, I mean, they had a huge deal with the NHL.
05:37If you watch the NHL playoffs, you saw the Betway logo all over.
05:41To your point, soccer.
05:42I mean, even Ted Lasso, one of the main teams in there was Betway.
05:46So they got lots of brand exposure in North America and just have not been able to move
05:52very much of a needle here.
05:54And so they'll be getting out fairly soon, I would expect.
05:59They are going to maintain their online casino operations here.
06:02They're live in Pennsylvania and New Jersey.
06:05They see much more potential there.
06:06They said they'll expand in markets as opportunities arise there.
06:10Now, Sahara Bets, to your point, is interesting there.
06:14They were only live in Arizona.
06:17They were the partners of the Arizona Coyotes because the same owner owned the company and
06:24the sports book.
06:25And with the Arizona Coyotes selling off their assets and the team going to Utah and an inactive
06:33franchise effectively being abandoned by the owner recently because of some, you know,
06:39he had hoped to revive it within the next five years with a new stadium or a new arena.
06:44And I would assume that would have kept Sahara Bets kind of brand alive, but they're leaving.
06:49They never got much of a market share in Arizona either.
06:53And so this is, you know, it was kind of expected.
06:55I think once we knew that the Coyotes were no more, that Sahara Bets would also be no
07:00more.
07:01The other thing that's interesting is Betway was also live in Arizona and we're in the
07:03midst of an open Arizona license process.
07:07So once Betway leaves, that'll be down to 14 active licenses.
07:13There can be up to 20.
07:14So there's lots of licenses open in Arizona.
07:17I don't know what kind of operators are out there that could find any interest in Arizona
07:23at this point because in the last two open license processes, Bet365 and Fanatics, which
07:27were kind of the only major operators out there looking to get anywhere, were introduced
07:34into the market.
07:35So, you know, maybe Circa Sports with their proximity with the giant Circa Resort up in
07:39Las Vegas or Underdog Sports kind of starting their real sportsbook experience.
07:45They might be interested, but six sportsbook slots is quite a few for a state like Arizona,
07:51which is a top eight sports betting market in the U.S. in terms of handle.
07:55So there is lots of opportunity, but again, 90% is dominated by, you know, the FanDuel,
08:02DraftKings, Caesars and BetMGM.
08:04So not a ton of space for the rest of them.
08:07Yeah, indeed.
08:08All right.
08:09So let's close it out.
08:10I know that you were in Canada covering sports betting conference there.
08:13Really interesting story and something I don't think we've ever talked about here.
08:16Calgary Stampede, one of the largest annual rodeos, signs a contract with Play Alberta.
08:23Now two questions here.
08:24How did this come together?
08:25And the second one, if you can make it quick here, can you bet on the rodeo?
08:27Like, I'm not even aware of this.
08:29Is this something you could bet on?
08:30Yeah, Play Alberta is the solo operator as it stands right now, though Alberta will be
08:34opening up to more commercial operators.
08:36So this kind of seems like a significant partnership once you really dig down deep because the
08:40Calgary Stampede welcomes 1.4 million people every year and Alberta is only a province
08:46of like four million people.
08:47So it's a huge amount.
08:49And yeah, Play Alberta will be offering the Stampede event betting for the first time
08:54ever.
08:55So it's a really unique, weird partnership, but I think it works for Alberta, which is
08:58a very Western, Southwestern type experience in Canada.
09:03All right.
09:04Real cool.
09:05Thanks, Pat, for coming on.
09:06Really appreciate it.
09:07We'll talk again next week.
09:08Thanks as always, Craig.