Author Archives: Robert McCabe

Vegas Bookmakers Make Costly Sportsbook Error

Last Sunday marked one of the biggest sportsbook losses in Las Vegas history, all thanks to an error made by bookmakers. Nearly a quarter of a million dollars in winning wagers were placed at MGM Resorts on Sunday, and all of these bets were made after the sporting events had started. Bookmakers are calling this the largest loss in the history of Vegas sportsbooks, but the error that was made is more common than some may think. Now, some people are questioning whether there will be any repercussions for those who took advantage of the mistake.

The Error

When entering the odds for various sporting events, oddsmakers often enter the start times of manually; this was the case for a number of Korean and Chinese baseball games that were open for wagers on Sunday. The issue arose when the start times were entered incorrectly, giving bettors the opportunity to place wagers that were supposed to be available only before the game after the game had started.

The error presented bettors with the unique opportunity to take a look at the games in play and determine the outcome of the games based on the live scores and events taking place in each match. Although many sportsbooks typically offer live betting, they do so with odds that are adjusted to account for the events taking place within each match. This time, however, the odds remained static, due to the fact that the manual start time entry made it seem as though the games had not begun. Bettors were quick to spot the error and did everything they could to capitalize on the mistake.

Easy Money

Nearly 50 bets were placed in order to take advantage of this mistake, many of which were placed through the self-serve kiosks at the Bellagio resort between 1:30 a.m. and 3:00 a.m. The games in questions were baseball games from the KBO League and the Chinese Professional Baseball League. The games start times were 1 a.m. and 2 a.m., but the books had them listed much later, making it easy for bettors to hand-pick the bets that were most likely to hit.

In the game between KT Wiz Suwon and Hanwha Eagles, the over was set to 9.5 runs. When Suwon scored five runs in the first inning, many bettors realized that the over was likely to hit, and so they placed their wagers. Over 9.5 runs hit in the seventh inning, and the game ended 8-4 in favor of Suwon. The NC Dinos and the Doosan Bears were being shown on ESPN, with the under set a 9 runs for -110. The game was 0-0 until the 5th inning, and bettors again took advantage of the opportunity by taking the under.

Single bets were the least of bookmakers’ concerns. One $250 wager on a 10-leg parlay ended up paying out more than $137,100 to one lucky bettor. Another $100 eight-leg parlay won $11,156.60. These creative parlays are just a few examples of how bettors were able to cash out on one of the biggest bookmaking errors in the history of Las Vegas.

Winnings Hang in the Balance

Errors from manual entry occur quite frequently, but not with losses of this magnitude. A number of bookmakers in the industry spoke out about the incident, claiming that the occurrence is quite common. The issue, of course, is that a loss this great can hardly be chalked up as a typo from which bookmakers can move on. Now, The Nevada Gaming Control Board is stepping in, and many are wondering whether or not these winnings will be rescinded.

Whenever a dispute in excess of $500 occurs, The Nevada Gaming Control Board is required to launch an investigation. In these circumstances, the board will conduct their investigation, ultimately deciding whether or not bookmakers need to payout the bets in dispute. This could mean that the opportunistic bettors that took advantage of this mistake could be left with no winnings from the wagers they placed. It is common practice within the industry to give patrons the option of refunding their tickets or keeping their winnings under the condition that they will be permanently banned from the sportsbook. Given the choice, one would think that these lucky bettors would gladly take their winnings to another sportsbook, but for the time being they must wait for the decision from the board.

Barstool Sports Prepares for Sports Betting Venture

Barstool Sports has announced their intentions to launch their first Barstool Sportsbook with the help of a new partnership. Barstool founder Dave Portnoy was recently interviewed on CNBC’s Mad Money, stating his intentions to get back to the roots of the company: professional sports. Now that major sports leagues have begun rolling out plans to return to play later this summer, Barstool Sports believes that its time they put their mark on the growing sports betting industry throughout the country. Barstool CEO Erika Nardini doubled down on Portnoy’s comments, saying the highly anticipated sportsbook could be here in time for the 2020 NFL season, which starts in September.

What to Expect from Barstool Sportsbooks

Barstool intends to launch both a sports betting app, and a brick-and-mortar sportsbook, yet not concrete plan has officially been put in place. Portnoy, who founded Barstool in 2003, shared that he’s looking forward to getting back to sports after the coronavirus pandemic brought the sports world to a stand-still in March. As a sports bettor himself, Portnoy looks forward to having a hand in creating a unique sportsbook, which Nardini believes will be a unique reflection of the Barstool culture that fans know best.

In an interview with Fox Business Network, Nardini explained some of the features that she anticipates will set Barstool Sportsbook apart from well-established competitors like DraftKings and FanDuel. Barstool already has a number of podcasts and other digital platforms they use to discuss sports betting. Pardon My Take, which is currently one of the most popular sports podcasts in the world, is just one example of Barstool’s far-reaching sports culture influence, and will provide a platform in which employees will continue to discuss sports betting. Through these platforms, Nardini believes that Barstool employees will be able to leverage their existing sports expertise to encourage fans to use the new sportsbook and engage in unique ways.

Barstool also plans to have a hand in creating some unique promotions to draw fans to the new app. Barstool employees will work on creating parlays and lines for unique bets in an array of in-app promotional betting options. On the app, bettors will find a variety of sports to place wagers on. Nardini claims that the new app will cover everything, from popular sports leagues such as the NFL, to more unique bets like Bulgarian soccer.

A Lucrative Partnership

Barstool Sports has already made their mark on the gaming industry, after Penn National Gaming announced a 163 million-dollar deal that awarded them 36 percent interest in Barstool in February. Through this partnership with the gaming industry leaders, Barstool has created the opportunity to create the sportsbooks experience they have been dreaming of. Nardini believes that the pairing between Penn Nationals large and reputable brand, coupled with the enticing personalities at Barstool Sports, create the perfect combination for popularizing their latest project.

The timing of the sportsbook is shaping up quite nicely, assuming that everything can continue as planned. Penn National was forced to close its doors over the past few months, in order to thwart the spread of coronavirus. Now, as parts of the country are beginning to reopen, Penn National has reopened roughly 70 percent of their locations, and 11,000 employees have returned to work. Meanwhile, major sports leagues like the NBA, NHL, MLB, and MLS, who have suspended play due to the virus, are now planning to start playing again over the next two months. If Barstool Sportsbook can realistically launch their app in the coming months, then they will have an opportunity to capitalize on an unprecedented period of professional sports.

The partnership with Penn National suggests that the ambitious goal to have both an app and brick-and-mortar sportsbook in the near future is more than just a pipedream for Barstool Sports. However, there are a number of legal considerations and hurdles that Barstool will have to face in order to make this dream a reality. A September launch for the theoretical sportsbook seems ambitions, unless Barstool and Penn National can work to push a concrete plan that can be approved on such short notice. Regardless, the intent is clear: A Barstool Sportsbook is on the horizon.

Illinois Governor Passes Online Sports Betting Registration

Over the past week, Illinois Governor J.B. Pritzker signed an Executive Order to allow bettors to create online accounts for sports betting. This Executive Order suspends the need for in-person registration for any sports wagering in the state and is part of the state government’s response to COVID-19 emergency safety restrictions. While a number of states throughout the country are slowly starting to reopen businesses and relax social distancing restrictions, Illinois has no definitive plan to re-open casinos in the immediate future, leaving the future of sports betting in limbo. A number of professional sports leagues have announced their intentions to return to play under new guidelines and in a series of one of a kind competitions. Pritzker’s Executive Order presents Illinois residents with the opportunity to begin betting on sports from the comfort of their own home.

Initial Plans for Illinois Sports Betting

The introduction of legal sports betting in the state of Illinois began a year ago, when state officials passed a bill to grant and approve licenses for sportsbooks. The bill requires bettors to register at casinos, racetracks, or sports facilities in order to legally place wagers on their favorite sports. After signing up in person, bettors may place wagers on mobile applications that are operated by the brick-and-mortar locations where they registered. Since the introduction of the bill, only two casinos have been granted temporary operating permits by the Gaming Board: Rivers and Argosy Casino Alton. However, at this time, neither of these two brick-and-mortar locations have requested approval for online sports wagering. It’s worth noting that Illinois also included a “penalty box” period in their gambling law, which gives casinos 18 months of sports betting before online gaming giants like FanDuel and DraftKings can apply as a sports betting provider.

After much deliberation surrounding the rules and regulations for these perspective sports betting providers, sportsbooks were prepared to officially launch in time for this year’s March Madness tournament. This launch, however, came to a screeching halt due to the coronavirus pandemic. As the threat of the pandemic grew, safety regulations prevented any possibility of bettors registering at brick-and-mortar locations. Of course, these regulations also led to the suspension of collegiate and professional sports on a global scale.

The Return of Sports Betting

Since social distancing regulations and stay-at-home orders were put in place in mid-March, the United States has successfully started to flatten the curve and stymie the spread of coronavirus. During this period, professional sports leagues, including the NHL, NBA, and MLS, have developed and announced their intentions to return to play. All of these plans have resulted in an unprecedented period in which these major sports leagues will be playing throughout the summer, in competitions that will be the first of their kind. The start of these competitions has created the perfect storm for sportsbooks looking to get back into the action.

While the recent Executive Order is a step in the right direction, it does not change the fact that the only legal sports betting options, at the moment, are limited to the brick-and-mortar locations. Officials are hopeful that these casinos can reopen sometime in June, but in the mean time they remain closed indefinitely. Illinois Gaming Board administrator Marcus Fruchter issued an announcement stating that Pritzker’s decision opens the door for online sports betting to become available sooner rather than later. The statement went on to praise the order as an option for protecting a revenue source during a period in which the state is recovering from the financial impact of the pandemic.

The Gaming Board will hold a virtual meeting on Friday, June 11, which will be its first meeting since January 30. Bettors and officials alike hope that this could be a crucial step in launching sports betting in time for Illinoisans to place a wager on their Chicago Blackhawks, when the NHL playoffs kick off later this summer.

D.C. Sports Betting Delayed Indefinitely

Washington D.C. has yet to officially launch any form of sports betting, despite the fact that it was legalized over a year ago. Now, amidst the postponement of all professional and collegiate sports due to the coronavirus, the nation’s capital will have to wait even longer for its first highly anticipated sportsbook. After much deliberation and tireless efforts throughout the development of the city’s first sportsbook, it appeared as though residents in D.C. were primed for access to sports betting in early March, just in time for March Madness. However, as the world of sports continues to submit to the will of the ever-growing concern surrounding Covid-19 it appears that sports betting in Washington D.C. must be postponed indefinitely.

The Long Journey to Launch

As the nationwide shutdown began on Friday, March 13, the Office of Lottery and Gaming confirmed that it would be launching its citywide mobile sports betting app and website before April 1. At the time this announcement was made, the NCAA had already canceled one of the biggest sporting events of the year: the NCAA March Madness Tournament. During this time, it also became clear that major professional sports leagues throughout the United States, such as the NBA and NHL, would be forced to suspend competitions, with the start of the MLB season also hanging in the balance. The Office of Lottery and Gaming fully recognized that their sportsbook would be launching in a world devoid of sport, but it seemed that the launch would resume as planned, if only to finalize a project that had taken over a year to complete.

In January of 2019, Mayor Muriel Bowser officially legalized sports betting in the District. Since then, officials have worked tirelessly to come up with a sportsbook that they feel is satisfactory when it comes to offering regulated sports betting options to bettors, in hopes of producing revenue for Washing D.C. The final product, a collaboration between Greek gambling company Intralot and the D.C. Lottery, was primed to fall woefully short of the anticipated offerings for their opening day, which was scheduled for mid to late March.

The Journey Continues

As the coronavirus pandemic continues to plague the globe, the Office of Lottery and Gaming has been forced to delay the launch of their sportsbook even further. In a statement issued by a D.C. Lottery spokesperson, the launch of the sportsbook has officially been delayed indefinitely. The spokesperson emphasized that the mobile app and website have gone through the necessary tests to be ready to go live at the drop of a hat, yet the ongoing suspension of professional sports on a global scale has led the office to determine that a launch at this time would be counterintuitive.

The launch of the sportsbook at this point could potentially cost more money than the app or website would produce in revenue, which is highly disappointing considering the lofty projections for the industry. Officials had estimated more than $26 million in revenue this year, and that figure was set to increase in the coming years. The effects of this financial impact are certainly concerning, especially considering the hit that Intralot could be taking from the loss of revenue from other projects throughout the nation.

No End in Sight

The recent events leading to the indefinite delay of sports betting launching in D.C. will certainly hurt officials and sports betting enthusiasts alike. On the heels of the launch of the first online and mobile sportsbook was the expected launch of in-person sports betting for the District. A number of applications for sports betting licenses at professional sporting arenas like Capital One Arena and Audi Field had been in the works prior to this nation-wide shut down. At the time these applications were submitted, it was expected that such licenses could be issued before the 2020 NFL season. It appears that the effects of the suspension of all professional sports will force those decisions to be delayed as well.

As the world continues to adjust to the changes that have been forced by the outbreak of the coronavirus, officials in D.C. will await the decision by professional sports leagues to determine the next steps for sports betting in the District. For the time being, the Office of Lottery and Gaming has committed themselves to offering updates about the status of their mobile app and website, promising that when the time comes, they will be ready to launch the highly anticipated product.

Nevada Approve Esports Betting in Response to Pandemic

Facing one of the greatest lulls in sports betting since its legalization in the United States, Nevada has approved esports betting for regulated sportsbooks throughout the state. As the coronavirus pandemic spreads across the globe, sportsbooks have been forced into limited sports betting offerings, raising concerns for operators throughout the country. In an attempt to mitigate the effects of these limited offerings, Nevada has made the historic decision to allow sports betting outlets throughout the state to begin accepting wagers for Counter Strike: Global Offensive (CS:GO), a popular and competitive first-person shooter. With this decision, Nevada becomes the first state in the country to officially offer esports betting, opening the door for other states to do the same.

Shifting to Esports

While professional sports leagues across the globe have stopped indefinitely due to the coronavirus, professional gaming has come into the spotlight. Professional gamers and streamers have found solace in the fact that much of what they do can be completed from the comfort of their own home, while retaining a competitive atmosphere that sports fans crave. Even popular NBA and NFL players have begun to explore this outlet, playing and streaming competitions with some of their favorite video games.

The potential of offering lines on esports has hung in the balance in many states, as sports betting continues to evolve throughout the country. While many states have adopted legislation for sports betting since the Supreme Court’s 2018 decision to lift the ban, many other states continue to question its merit. While sports betting is still in its infancy throughout the country, many have debated whether or not esports should be thrown into the mix of potential lines for bettors.

While the legitimacy of esports may be debated, there is no denying the competitiveness. Leagues for popular games like FIFA, Overwatch, League of Legends and CS:GO have been established across the globe with official rules and regulations. Some leagues, like FIFA, have even established ties with professional sports leagues like the MLS. Additionally, streaming platforms like Twitch, Mixer, and YouTube have given professional gamers an outlet for building an audience that is comparable to professional sports contests. Now, with the absence of available traditional contests to wager on, it appears that esports is going to have a chance to prove itself as a viable sports betting option.

Opening Day

On Thursday, William Hill became the first Las Vegas sportsbook to begin offering esports betting, listing lines for contests that took place on the same day. The CS:GO matches that they offered lines on were available to live audiences on various streaming sites, including YouTube and Twitch. Much like any other sporting events, the odds were accessible via William Hill’s Nevada mobile app for players to begin placing their wagers. The matches offered by William Hill took place in the ESL Proleague and included the following matchups: 100 Thieves (-500) vs. Swole Patrol (+375) and Team Liquid (-335) vs. Made in Brazil (+275).

One Small Step of Esports

In many countries throughout Europe, esports has already been accepted as a reliable sports betting option. In the United States, New Jersey has tested esports betting, but concrete legislation has not been finalized. Nevada’s decision to pioneer esports betting by offering odds for CS:GO paves the way for other states, as well as other esports.

The decision to offer lines for esports appears to be a lifeline for a gambling industry that is not only faced with the issue of suspended sports leagues, but also the temporary closure of many brick-and-mortar sportsbooks and casinos. In the coming months, the success or failure of Nevada’s decision could determine the future of esports betting in the country.

Sportsbooks Adapting to Counteract Covid-19 Impact

The impact of Covid-19 has been felt throughout the world, as more and more countries enact policies that require social distancing to stop the spread of the virus. Sports leagues across the globe have been forced to suspend or cancel events due to the rate at which the disease has spread throughout the countries they operate in, impacting the industry in ways that were previously unimaginable. In the United States, the spread of the virus has forced a suspension in play and practices for the NBA, NHL, MLS, and MLB. The timing of the outbreak has also forced the NCAA to cancel March Madness, one of the busiest sports betting periods of the year. The suspension and cancelation of these events have forced sportsbooks into adapting to try and stay relevant in what has brought the booming sports betting industry to a screeching halt.

The Power of March Madness

Oddsmakers were primed and ready to handle Selection Sunday this past weekend; March 15 would have signified the launch of sports betting on the NCAA college basketball tournament, one of the biggest sporting events of the year. However, on March 12, the NCAA announced its decision to cancel the tournament amidst concerns surrounding the spread of Covid-19, after initially suggesting the tournament could be played behind closed doors. The 15-day tournament was set to span 14 cities, and as always was slated to be one of the most-watched sporting events of the year. The tournament consistently brings in millions of dollars between the media coverage, ticket sales, and gambling.

The notorious March Madness brackets, which fans have been filling out for years, present an opportunity for even the most casual fans to enter pools for cash prizes. These pools have acted as an access point for anyone interested in wagering on sports, even in the most casual sense. Sports betting has become even more accessible in recent years, after legislation has rolled out in 16 states since the Supreme Court’s decision to lift the ban on sports betting in 2018. Now fans who have been filling out brackets for years have been considering doubling down on their potential winnings by placing wagers at sportsbooks throughout the country.

It may come as a surprise to some that the money wagered on a college sport surpasses that of even the NFL or NBA, but the March Madness tournament does just that. In the first four days of the 15-day contest, March Madness generates more money in wagers than even the Super Bowl. With the cancelation of the tournament, sportsbooks in Vegas and throughout the country are looking for a way to counteract this massive loss.

The Impact on Vegas

In an interview with USA TODAY, Jay Kornegay, head of operations at Westgate Las Vegas Resort & Casino, expressed that there is no magic bullet for replacing March Madness. Last year, 47 million Americans wagered approximately $8.5 billion on the tournament. These figures include the countless brackets that fans fill out, as well as the wagers placed on individual games. What’s even more concerning, is the fact that the NCAA tournament isn’t the only gap that sportsbooks will have to fill in the coming months.

Almost every other sport in the world has been impacted as well, and the effects are being felt by sportsbooks throughout Nevada, where they typically bring in $500 million a month in sports wagers alone. The concerns surrounding the spread of Covid-19 has also forced temporary closures of brick-and-mortar locations like Vegas’ Wynn Resorts. Other locations have been forced into workforce reductions, as sportsbooks seek to do what they can to counteract the lack of action and provide steady work for their employees, as well as steady action for their players.

Current and Future Sports Betting Options

For the time being, many sportsbooks have shifted their attention to rely on futures bets, such as selecting the Super Bowl and World Series winners for the upcoming seasons. Additionally, bookmakers have done what they can to off lines on the extremely limited sports betting options left at their disposal. Brazilian UFC, Turkish and Russian soccer, and a very limited number of other contests have been the only available markets for sportsbooks over the past few days. It may not be much, but this limited action has at least offered something to bettors for the time being.

With such limited offerings, the sports betting industry is poised to see a steep decrease in revenue, after what has been one of the most successful sports betting periods in U.S. history. What’s even more unsettling is the fact that the suspension in play has the potential to last longer than expected; both the NBA and NHL intended to return to play in about six weeks, while the MLB is expected to delay the start of their 2020 season. As the virus continues to spread, it’s possible that these suspensions in play could extend until July.

While the future of sport hangs in the balance, sportsbooks will have to make do with the limited offerings at their disposal.

Spain Imposes New Regulations for Gambling Advertising

Alberto Garzon, Spain’s consumer protection minister, recently announced plans for a serious crackdown on gambling advertising amidst concerns about addictive gambling behaviors. Throughout the country, officials have already begun to impose over 100 new restrictions, including cutting 80 percent of online gambling adds and limiting opportunities for gambling advertising sponsorships in professional sports. The decision to launch these new restrictions stems from a campaign promise made by Garzon’s Unidas Podemos party to protect youth and gambling addicts. The latest changes have raised some concerns about the possible impact on the growing gambling industry.

Details of the Ban

The reasons for the ban have been clearly stated; Garzon considers this a clear issue related to public health, much like the use of tobacco or other addictive products. The Spanish gaming lobby reported that gamblers in the nation lose an estimated 10 billion euros every year. This estimate includes sports bets, casinos, and national lottery tickets. While this figure is certainly staggering, it is important to consider its implications for the amount of potential revenue produced through wagers placed and sponsorships that have come from this budding industry.

One of the most important changes to help address Garzon’s concerns is the banning of marketing offers that advertise promotions for free bets to new customers, which Garzon believes clearly targets vulnerable groups. Along those same lines, any ads during live sports broadcasts cannot promote live betting or specific in-play wagering markets. These free bet and live betting promotions are common for online casinos and sports betting sites throughout the world, yet Garzon clearly feels that a change must be made to eliminate them.

The new restrictions will reduce television gambling advertising by as much as 80 percent. This will be done by limiting all online gambling adds to a four-hour window starting at 1 am. This window not only applies to television adds, but also radio and online platforms. Gambling companies will also be barred from using celebrity endorsements in any of their advertising, which could have a significant impact on companies like Codere, who use Real Madrid stars Luka Modric and Eden Hazard for their marketing. Additionally, soccer teams who feature gambling advertisements on their jersey will have to remove those advertisements on all youth jerseys being sold.

Potential Effects of the Ban

Like many other regions of the world, Spain has seen an increasing interest in gambling over the past decade. Online gambling in Spain nearly tripled between the years of 2014 and 2018. With this substantial growth, the nation has inevitably witnessed a rise in gambling advertising as well. These sweeping regulations now pose a significant threat to advertisers and the sports teams they sponsor, as well as the gambling industry as a whole.

Many teams have benefitted from the significant growth in the gambling industry throughout the country. Popular Spanish soccer clubs, such as Barcelona, Real Madrid and Levante, have featured gambling advertising on their jerseys for years. Under Garzon’s new restrictions, gambling and sports betting companies are barred from entering naming rights deals with professional sports teams’ stadiums, nor can they have advertising within these stadiums. Many soccer clubs throughout Spain have enjoyed sponsor deals with gambling companies, and they may feel that these new restrictions pose a threat to these lucrative opportunities.

While the current changes have a relatively minimal impact on sports betting itself, they could have serious implications for the industry over time. The changes do not completely remove sports betting advertisements from the equation, but teams could become wary of entering new sponsorship deals in fear of stricter regulations in the future. Additionally, the impact of the limited advertising opportunities could damage existing revenues, shrinking the gambling and sports betting industry as a whole. It will be interesting to see how Garzon’s regulations affect the gambling landscape as they are introduced over the next few months.

NFL Considering Betting Lounges Despite Previous Gambling Stance

For years, the National Football League has taken a clear stance against gambling practices, banning the promotion of casino and sportsbook partnerships throughout the league. Over the years, it seems, this stance has given way, as a number of partnerships have been accepted and adopted by the league. Now, the NFL appears to be shifting their stance entirely, as they consider casino and sportsbook sponsors, including betting lounges in some stadiums. The decision to introduce these lounges may add to the confusion surrounding the relationship between the NFL and gambling practices, as these lounges clearly promote sports betting but will not offer physical bet-taking of any kind.

NFL’s Love Hate Relationship with Gambling

Like many professional sports leagues in the United States, the NFL has established clear rules and regulations against sports betting for anyone who works in the league. This includes players, coaches, officials, and a number of other professionals. The looming concerns surrounding sports betting is the preservation of the integrity of the game and the ability to ensure that each contest is played fairly.

Despite these concerns, the line between legal sports betting and illegal sports betting have become increasingly more blurred. Nearly 60 million people play fantasy sports in the United States, and 80 percent are playing fantasy football. Whether or not these fantasy leagues or daily fantasy contests constitute “gambling” under the league’s definition has been a point of contention for many. While NFL players are banned from sports betting, they are allowed to partake in fantasy sports activities, as long as they don’t accept winnings of $250 or more. To add to the confusion, the NFL went as far to shut down a 2015 fantasy football convention in Las Vegas, which was set to be headlined by quarterback Tony Romo.

In addition to the budding fantasy sports industry, the challenge in recent years has come from states passing new legislation to make sports betting legal and more accessible. With this legalization, the industry has boomed making it an attractive opportunity to bring in new revenue. In 2016, professional leagues for other sports in the United States began making deals with fantasy sports leaders like DraftKings and FanDuel. At this point, the NFL allowed individual teams to make deals if they chose to do so but didn’t enter a league-wide fantasy sports deal until 2019. Now, the NFL is taking the next step and considering new deals with casinos and sportsbooks throughout the nation for the 2020 season.

NFL and Gambling in 2020

Since the US Supreme Court’s 2018 decision to lift the ban on sports betting, 14 states have established some form of sports betting legislation, while many more states have sports betting legislation in the works. The NFL has already made small strides to embrace some of the revenue opportunities that come with this new legislation, including adopting Caesars as the league’s official casino partner and DraftKings as the official fantasy sports providers. The New England Patriots, Dallas Cowboys, and Kansas City Chiefs all have their own DraftKings fantasy sports lounges in their respective stadiums, which are very similar to the newly proposed lounges for the 2020 season.

Any team with legal sports betting in their state has the option of introducing a betting lounge within their stadium, as long as they are doing so with a casino or sportsbook that is licensed within their state. The lounges themselves will not offer betting windows or any physical bet-taking, but they will include signage from the casino or sportsbook sponsor, which will show available odds and bets. The sponsor casino or sportsbook may also use these lounges to sign up customers. The lounges will be located in the upper bowl of the stadium and will essentially offer a designated area for mobile sports betting from phones or other mobile devices.

While this seems like a large shift in thinking from the NFL, the emphasis from the league has been on the fact that no physical betting windows will be present in these lounges; any physical betting window will still be prohibited by the league. Representatives of the league feel that limiting these lounges to the upper bowl of the stadium and offering sports betting only through mobile devices will help mitigate any issues that could arise from underage betting or advertising to minors. The decision to introduce these lounges opens up a new opportunity for revenue through sponsorships for the NFL, while casinos and sportsbooks will also be enticed to become the official betting partner of their local NFL team.

New York Court Rules Fantasy Sports Illegal

On Thursday, February 6 an appeals court in the state of New York determined that daily fantasy sports contests are in fact illegal under state gambling laws. These contests, which have been in operation since 2016, were found to be in violation of the state’s constitution, threatening sports betting giants like FanDuel and DraftKings. The latest ruling also contested an earlier provision that designated daily fantasy sports as something other than “gambling’ under state law. Now, as sports betting is becoming more and more prevalent throughout the country, industry leaders are faced with the potential threat of this ruling reaching higher level courts and eliminating one of their most lucrative markets in the nation.

Development of Sports Betting in New York

The legalization of fantasy sports in the state came in 2016, when Gov. Andrew M. Cuomo signed a law that declared these games did not constitute gambling. Cuomo signed the law on the grounds that fantasy sports provided for consumer safeguards and minimum standards. Until recently, officials had felt that fantasy sports did not constitute “gambling” because they required skill, unlike other gambling activities that are left to chance. The 2016 law also regulated and taxed daily fantasy sports providers, such as FanDuel and DraftKings.

Fantasy sports traditionally require bettors to assemble a team of professional athletes from the sport of their choice, while adhering to a set of theoretical salary caps. Once these teams are assembled, bettors can earn point with their teams over a short period time or in a fantasy sports league that lasts a portion of the professional season. The ongoing challenge to designate fantasy sports as gambling under the state law comes from the idea that these games leave much of the outcome to chance, rather than skill.

The timing of the ruling may come as a shock to bettors and industry leaders alike. In 2018, the United States Supreme Court lifted the ban on traditional sports betting throughout the nation, giving states the option of developing and implementing their own laws. Now, 13 states have legalized sports betting, and companies like FanDuel, a New York-based sports betting company, have been able to capitalize on this opportunity.

Evolution of the Lawsuit

The court ruling is actually the result of a lawsuit dating back to October of 2016, shortly after Cuomo signed the law legalizing fantasy sports. Four New York residents asserted that they had been harmed by this type of sports betting. This group of people, referred to as Stop Predatory Gambling, asserted that daily fantasy sports were a form of consumer financial fraud, and that the government was using them to exploit people who were already in debt. Jennifer White, a member of this group, shared how fantasy sports contributed to the debts her mother and father owed, resulting in significant financial harm for them and their family.

The New York Supreme Court’s Appellate Division found that the law signed by Cuomo in 2016 was unconstitutional and could not be exempted from the penal code. The reason behind their ruling stood in contrast to supporters’ initial reasons for legalizing fantasy sports; the appellate court stated that while fantasy sports do require some level of skill, they also involve a great deal of chance. For example, player injuries, bad weather, or other factors could greatly influence the outcome of each game. The amount of chance involved in each competition, the court felt, was too great to exempt fantasy sports from falling under the category of gambling.

Since the court is proposing that fantasy sports be classified as gambling under state law, the legalization of daily fantasy sports would require both a constitutional amendment and voter approval. This amendment and voter approval would be necessary if the higher courts agreed with the ruling of the appellate court.

Future Outlook of New York Sports Betting

As it stands, there is no guarantee that the case will reach the state’s highest court, the Court of Appeals. The lower level court’s ruling does not immediately affect the operation of fantasy sports, so customers will still be able to play until the case advances. Both DraftKings and FanDuel issued statements that suggested they were not fearful of any significant action in the near future, and they expect to continue business as usual until further notice.

While the immediate future of fantasy sports seems to be secure, the lawsuit definitely puts a bit of uncertainty into the state’s gambling landscape. New York is one of the largest daily fantasy sports markets in the country, and the threat of a lawsuit such as this one cannot be ignored.

Penn National Gaming Strikes Deal with Barstool Sports

Penn National Gaming, an operator of casinos and racetracks based in Pennsylvania, announced last week that they had acquired a 36 percent interest in Barstool Sports, a leading digital sports media company. The acquisition cost Penn National Gaming approximately $163 million in cash and convertible preferred stock, and the deal places Barstool Sports at a $450 million valuation. The deal has peaked interest throughout the gaming industry, and Penn National Gaming stock has already seen an unprecedented rise. The partnership between the two companies has implications for the gaming and sports industries, as the groups plan to collaborate in an effort to offer attractive sports betting options.

What Their Investment Gets Them

The $163 million investment in 36 percent stake in Barstool has already been labeled a bargain, considering the potential return on investment. President and Chief Executive Officer of Penn National, Jay Snowden, believes that the new partnership will help elevate the reach of the nation’s largest regional gaming operator, as they join forces with a brand who offers an entry-point for a young new demographic. In three years, Penn National can add to the deal and increase its interest in Barstool to 50 percent, with an incremental investment of $62 Million.

The Chernin Group was Barstool’s majority owner before the announcement of this new deal, with 60 percent ownership of the site. Following the deal, The Chernin Group will still hold 36 percent of the site, leaving the remaining 28 percent stake to Barstool Sports employees. The new deal is expected to be finalized in the first quarter of 2020.

Penn National Gaming’s investment ensures that they will be Barstool Sports’ exclusive gaming partner for up to 40 years. They also have the option of bringing in another partner who could acquire a portion of their shares in Barstool. During this 40-year period, Penn National has the sole right to use the Barstool Sports brand for all online and retail sports betting and iCasino products. Penn National has already expressed their interest in launching a Barstool Sportsbook; Head of Penn Interactive, Jon Kaplowitz, shared that customers should expect a sports betting app from the new partnership in the third quarter of 2020.

The Barstool Sports Brand

In the announcement from Penn National Gaming, Snowden touted Barstool sports for being a leader in digital sports content, with its distinct branding and young demographic. Led by CEO Erika Nardini and Founder Dave Portnoy, Barstool Sports has grown from a small pop culture print publication and blog in Boston into a national sports media giant, gaining a cult following in colleges and young audiences throughout the country. Barstool Sports fans, often referred to as “stoolies,” have established a tangible sense of community and helped build the notorious and sometimes infamous Barstool brand. Both Nardini and Portnoy take pride in the fact that their brand unabashedly tackles some of the most controversial pop culture and sports topics, making them, if nothing else, a brand that simply cannot be ignored.

Barstool already offers a number of sports betting podcasts and programs, and the deal with Penn National Gaming suggests that there are serious plans to build upon this existing market. In addition to their podcasts and betting guides, Barstool offers their own betting app for iOS and Android called Barstool Bets. The Penn Gaming partnership gives them an even larger platform for their sports betting options. The new relationship will be mutually beneficial, as both companies expand their audience to new demographics.

Already Paying Off

In the days following the announcement of Penn National’s investment, shares for the company jumped 14 percent. The unprecedented rise in Penn National’s stock is just the start of the lucrative partnership. Barstool Sports has nearly 66 million monthly unique visitors to their site and has generated $100 million in revenue over the past year. Penn National Gaming currently runs 41 gaming facilities, offering more than 50,000 machines, 1,300 table games, and 8,800 hotel rooms. Their new betting app with barstool will mark a new opportunity to reach into new markets throughout the country.