Today’s podcast: You can and should fight the disruptive forms of gaming and gambling that are growing in the US right now, if you want. But at the same time, you better prepare for a world where they don’t go away.
Gambling news roundup
FanDuel parent Flutter reports Q1:
Earnings per share and revenue missed consensus after “customer-friendly results” (ie favorites winning) hit FanDuel and other sportsbooks for March Madness. Stock was down slightly in after-hours trading.
From Flutter’s earnings release:
“Continued Group earnings transformation underpinned by 8% AMP and revenue growth. Rapid scaling of US business helped drive Group net income +289% and adjusted EBITDA +20%.”
“US: leadership position continues with revenue +18% including sportsbook +15% despite adverse March Madness sports results, and iGaming +32%. Adjusted EBITDA 5x higher to $161m from strong operating leverage.”
Peter Jackson, CEO, commented: "I am pleased with the performance of the business during the first quarter, with the scaling of our US business driving a step change in the earnings profile of the Group. FanDuel continues to win in the US, retaining leadership positions in both online sports betting and iGaming, while we saw a positive performance within International, where our scale and the competitive advantages of our Flutter Edge have been enhanced by the acquisition of Snai in Italy. We are delivering against our strategic priorities, with clear optionality as an ‘and’ business that can create significant value through a combination of organic growth, accretive M&A, and returns to shareholders. The global regulated market opportunity is significant, and Flutter remains uniquely positioned to win."
More from me tomorrow in The Takeaway.
HG Vora Sues Penn Amid Proxy Battle Tied to ESPN Bet (Legal Sports Report): “Investment firm HG Vora Capital Management has filed a lawsuit against Penn Entertainment, accusing the company of violating federal securities laws and breaching its fiduciary duties after it reduced the number of board seats up for election from three to two ahead of its 2025 annual meeting. The suit, filed Monday in the U.S. District Court for the Eastern District of Pennsylvania, seeks declaratory and injunctive relief to invalidate what HG Vora calls Penn’s ‘Board Reduction Scheme.’ The firm argues that the move was an illegitimate attempt to sideline shareholder influence during a contested election. The dispute comes as Penn faces pressure over its underperforming ESPN Bet sports betting platform, a key flashpoint in HG Vora’s push for boardroom change.”
I track how ESPN Bet is doing granularly (The Cashout, paywalled), and there’s not been any headway in gaining market share or growing the online sports betting part of the business. All the chips need to get pushed in the middle for the upcoming football season before a potential opt-out in 2026. Or do they? There’s likely a real desire to turn things around at Penn/ESPN Bet, but it’s not clear a ton of spending or effort is going to lead to the desired result in the coming months. The less-than-stellar performance of first Barstool and now ESPN as Penn’s sports betting brand underlines why this power struggle has gotten very public.
Bill allowing Ohioans to play virtual poker and casino games online could be coming soon (WOSU): “A bill is in the works from one of the most powerful Republicans in the House that would allow Ohioans to gamble online beyond sports betting. The legislation could allow them to play virtual poker or other casino games on their phones or laptops anytime. Rep. Brian Stewart (R-Ashville) confirms that he’s working on a bill to establish iGaming in Ohio with the goal of generating some additional revenue for the state. Stewart is the chair of the House Finance Committee and the sponsor of House Bill 96, the House version of the two-year state budget.”
The drought for online casino expansion has been ongoing, but it’s not going to stop companies from lobbying for it. The more attempts you make, the more likely you pass a bill somewhere.
Online lottery ticket provision slipped into Missouri budget draws lobbying frenzy (KSDK): “A provision quietly tucked into the state budget last week to allow the bulk online purchase of lottery tickets has set off a flurry of lobbying on both sides of the issue as lawmakers finalize their work this week on Missouri’s $49.5 billion spending plan. The change, which was added by the Missouri Senate Appropriations Committee without any public debate, would open the door for lottery courier services — companies that charge fees to buy lottery tickets on behalf of customers. The business model has proven controversial in other states, even sparking a criminal investigation in Texas. … Lobbyists working for casinos and the bill to allow video lottery games — groups generally at odds — are opposing it. The major lottery courier companies like Jackpocket and Lotto.com have hired veteran Jefferson City lobbyists to push for their interests in Missouri.”
That’s a pretty good lobbying effort to get that into the budget. With the potential loss of Texas as a market into perpetuity, the courier industry needs to play offense and not just defense moving forward.
To wit, Connecticut bill to ban sweeps and lottery couriers advances (SBC Americas): “A bill in Connecticut that would ban lottery couriers and online sweepstakes casinos is set to go before the full Senate floor.
SB 1235 was reported favorably out of the Legislative Commissioners’ Office on Monday and has been assigned to the Senate calendar.”
Kalshi vs. CFTC on election betting is really over, now: The Commodity Futures Trading Commission earlier this week asked a federal appeals court to dismiss its case against Kalshi. The commission (under the Biden administration) had been trying to block election betting; the will to fight under the Trump administration seemed like it would eventually go away. The court agreed to the request on Wednesday. Short of any new legal challenges, election betting at prediction markets is here to stay.
Fanatics Sportsbook Refunds $500k Due to Steph Curry Injury (press release): “Last night saw Steph Curry exit the game against the Timberwolves in the first half, which triggered a $500,000 refund on all Steph Curry player prop bets as part of Fanatics Sportsbook’s Fair Play Policy. Customers received refunds in cash or if they were part of a parlay, the leg was voided and the rest of the parlay played out. The Fanatics Fair Play policy was extended from the 1st quarter to the first half for the NBA Playoffs giving customers an improved betting experience. Thanks to Fair Play, one Michigan customer turned $5,000 into $224,773 on a 4-leg Parlay (+ 9240 revised odds) with legs from the Warriors vs Timberwolves and Inter vs. Barcelona. The leg featuring Curry was voided allowing the rest of the SGP to play out. This is the largest single payout in Fair Play history.”
Kero Gaming raises $3m to boost micro-betting growth (Next.io): “The investment will accelerate the company’s growth in one of the sports betting industry’s fastest-growing segments: algorithmically-curated, real-time micro-betting. The round also included continued support from existing backers such as Eberg Capital, Sharp Alpha Advisors, Chicago Trading Company, Avenue H Capital, and Yolo Investments.”
Bill to remove promo credit deductions in Colorado nears finish line (SBC Americas): “Both the Colorado Senate and the House have approved versions of a bill that will sunset promotional credit deductions from state sports operators. The Colorado Senate passed HB1311 by a 28-7 vote on Tuesday. The measure amends the state’s Revised Statutes to require licensed online casino and sports betting operators to pay a tax on free bets to generate additional revenue.”
How Michigan’s gambling regulator looks to tackle the black market (SBC Americas): Some interesting insight in this piece into how the most aggressive US regulator operates. “Nowadays, that land-based side of things is only roughly 30% of the unit’s work, Alagna said. The 70% majority is investigating illegal, unlicensed offshore operators. To do so, the board’s investigations unit goes undercover. ‘We have difficulty getting the undercover Social Security numbers and undercover credit cards, but we’ve been successful buying in with cryptocurrency,’ Alagna detailed. ‘We very carefully log in the investigative report snapshots of the money going up and down as we win and lose.’”
Gambling newsletter roundup
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