The Early Line: A Call For Feds To Probe FanDuel And DraftKings
TCL offers a roundup of recent US gambling news called The Early Line every Monday.
An FTC or DOJ probe of FanDuel and DraftKings? | A pair of US senators have called on the Federal Trade Commission and Department of Justice to investigate the two biggest US sports betting brands for “coordination to obstruct or impair competition.” Story here; you can read the letter here. The letter from Sens. Mike Lee and Peter Welch alleges the companies “have undertaken a coordinated effort to pressure crucial business partners not to do business with these new players.”
Reading the line: Let’s start here: The letter’s assertions are probably not worth the federal government’s time. I imagine this is likely more of a nuisance to DraftKings and FanDuel than an existential threat. Yes, the two companies have sometimes lobbied against fantasy pick’em/parlay operators. And while you and I may argue about the legality of the industry, a bunch of state regulators have decided — with or without help — that fantasy against the house is not allowed unless it is licensed as sports betting. FanDuel and DraftKings pointing out legal pitfalls or worrying about partners’ involvement seems more like smart business than something nefarious or illegal, to me. It’s unlikely that a couple of US senators rolled out of bed and decided to pen a letter calling out DraftKings and FanDuel; this is almost certainly emanating from some entity or company lobbying for it. As Earnings + More noted, the only named source of the allegations is a single post that talks about competition in fantasy sports. (I am told the lobbying effort is not coming from the group that represents some of the social/sweepstakes casinos, for what it’s worth.) And yes, it’s also at least slightly ironic that DK and FD are coming under fire for this given their history (and success) of getting broad fantasy sports laws passed.Want to sponsor the Closing Line? For inquiries, email dustin@closinglineconsulting.com. There’s also more information at the bottom of this post.
News on responsible gambling won’t let up | Not great news for DraftKings, which is being sued in a case where a man with a family allegedly lost a million dollars gambling beyond his means. This post popped up on my feed from Forbes. This syndicated story linking “financial woes” to sports betting keeps making the rounds in regional media outlets. And here’s another one from a New York outlet entitled “Gambling addiction quietly taking a toll as betting apps gain popularity.”
Reading the line: There’s only so much good that can come from good PR when stories like the DraftKings lawsuit come out. While I don’t agree with everything here, and the sports betting industry probably won’t either, this is perhaps the kind of legislative effort from an NJ lawmaker that the industry should get behind and help craft. One of the only ways I see out of the current PR mess is to be actively involved in measures and spending on RG efforts.
Sweepstakes vs. real-money online casinos, part ∞ | Analysis from the Social & Promotional Games Association and Eilers & Krejcik Gaming shows that the departure of sweepstakes casinos from Michigan had little impact on the market. More from some PR I got this morning: “If social sweepstakes casinos directly competed with a state’s real-money online casinos, their exit would be expected to boost the growth of Michigan’s online casino market. However, the data shows the opposite: after social sweepstakes sites exited Michigan, the state’s online casino growth lagged behind the national average growth rate.”
Reading the line: That’s some data on the side that sweeps are not a 1-for-1 competitor for online casinos. But is that a compelling argument to policymakers and regulators? Possibly for the former, as they look to protect an industry they helped create; if there’s no impact to the bottom line, it’s arguably less of a priority. I would guess it’s less compelling for regulators, who generally care more about whether a type of game is operating legally and/or needs to be licensed. And it’s important to note that sweeps casinos and sportsbooks operate in dozens of states without legal online gambling, so this data isn’t terribly germane for any of those places beyond trying to argue the product isn’t quote-unquote online gambling. (A new sweeps casino tells us that it’s a “dedicated online casino,” however):
As an aside, I think there’s some room moving forward for some deeper analysis on this. The products can be and are discovered and marketed very differently; for instance, affiliates certainly weren’t sending users to sweeps casinos in Michigan in the same numbers that they were for real-money operators, given how much higher a cost-per-acquisition is for the latter. Also — and this is very anecdotal but I was not alone — when Black Friday happened in online poker, I didn’t seek out new ways to play online poker, I just stopped playing. Also, I have some question of how much penetration the nascent sweeps industry had in a state that launched online casinos almost four years ago. But I digress.
Quick hitters
I wrote about if ESPN account linking with ESPN Bet is moving the needle in early November data (paywalled).
Skins gambling via Counter-Strike gets a deep dive from Barron’s.
From across the pond, a Pizza Hut promotion for online casinos catches some heat.
The New York Mets became the second or third betting favorite to win the World Series, depending on the sportsbook, after signing star Juan Soto.
Closing Line Consulting
Need help with gambling content, navigating the North American gaming industry, communications/PR, or research and analysis? I have a consultancy to help in gaming and beyond. Reach out if you want to have a conversation. Learn more about CLC here
