The Early Line: We Know Very Little About The NBA Betting Investigation
Gambling news roundup: NJ raises online gambling taxes while legislature passes sweepstakes ban bill; Fanatics adds fee to bets in Illinois; DraftKings launches My Budget Builder.
The Early Line offers a look at the top stories heading into the week, along with some analysis.
Sources: Pistons' Malik Beasley subject of federal gambling probe (ESPN): “Federal authorities are investigating Detroit Pistons guard Malik Beasley on allegations of gambling related to NBA games and prop bets, sources told ESPN on Sunday. The allegations are from the 2023-24 season, when Beasley played for the Milwaukee Bucks, sources said. Beasley averaged 11.3 points in 79 games that season, during which he made a career-high 77 starts. At least one prominent U.S. sportsbook detected unusually heavy betting interest on Beasley's statistics beginning around January 2024, a gambling industry source told ESPN's David Purdum.”
"An investigation is not a charge," Beasley's attorney, Steve Haney, told ESPN. "Malik is afforded the same right of the presumption of innocence as anyone else under the U.S. Constitution. As of now he has not been charged with anything."
Reading the line: Here’s my hot take: Let’s hold off on the hot takes. We still have very little information about what happened. We have a report of a US sportsbook seeing heavy action on a Beasley rebound prop; the action came in on the under, and Beasley actually went over on the prop. Otherwise, what do we know? Not much. We don’t know who was betting or where they were betting. We don’t even know if Beasley did anything wrong. All we really know, as of now, is there’s an investigation. So the hot takes should stay in the holster until we know more.
A couple of things can be true at the same time. 1. There was likely some amount of manipulation going on via offshore/illegal sportsbooks before the widespread legalization of US sports betting. 2. The ubiquitous nature of legal sports betting and the huge list of things you can bet on for player props (both at sportsbooks and fantasy pick’em apps) creates more opportunity for possible manipulation. More from Awful Announcing.
One final thing that is a matter of record that may only matter to me… I keep seeing this reported as “the US District Attorney” is investigating Beasley. That is not at all accurate. There are US attorneys all over the country that work in 90+ districts. These attorneys are not referred to as “district attorneys,” which is a term used in local jurisdictions. Thanks for your attention to this matter.
FanDuel’s Trusted Voices: Conversations About Betting is designed to equip adults, including parents and coaches, with tools and resources to talk to young people about gambling, including information on warning signs, risks and proxy betting. The program is led by retired professional basketball player Randy Livingston and his wife, basketball agent Anita Smith, who share their personal stories related to problem gambling, with the hope of preventing others from experiencing similar harms. Learn more and join the conversation here.
New Jersey Approves Increases to Sports Betting, iGaming, DFS Tax Rates (Sports Betting Dime): “As expected, New Jersey lawmakers will be increasing the state’s sports betting and iGaming tax rates. However, daily fantasy sports operators will also be paying a newly increased tax rate in the Garden State as well. The New Jersey Senate and Assembly both approved a bill today to increase the Garden State’s sports betting, iGaming, and daily fantasy sports tax rate to 19.75%.”
“However, what was surprising was an included increase to the Garden State’s daily fantasy sports tax rate. The games are currently taxed at a rate of 10.5%, and will be bumped up to 19.75% if the bill is signed into law by Gov. Murphy.”
“The approved legislation also specifically criminalizes proxy betting in the state. According to the proposed legislation, the bill makes it illegal to engage in proxy betting in which ‘a person risks property with a value of $1,000 or more, having agreed to pay 10% or more of the proceeds of the gambling activity to another.’”
Fanatics following FanDuel, DraftKings by adding 25-cent fee to all bets in Illinois (SBJ): “Fanatics will join DraftKings and FanDuel on the list of sportsbooks that say they will pass Illinois’ planned 25-cent per-bet tax on to customers as a transaction fee on all mobile bets if the state continues with its plan to implement the surcharge beginning next month. A Fanatics spokesman said the decision ‘reflects the high cost of operating’ in the state.”
Reading the line: Reasonable tax rate increases may not be sportsbooks’ favorite thing, but this is certainly not the end of the world for US sports betting. The bad outcomes would be 1. every state doing similar and raising the blended tax rate significantly nationwide and 2. Massive increases like we saw in Illinois. Fanatics joined the Big Two in Illinois by passing the tax on to bettors; will the rest of the sportsbooks follow suit? We’re close to this being the de facto policy by operators across the state. Sportsbooks have decided that Illinois is the place to draw a line in the sand on eating tax increases; it will likely be the model for any huge tax increases moving forward.
The DFS news is interesting, as fantasy pick’em/parlay operators (both against the house and peer-to-peer) do not serve New Jersey. This mostly impacts DraftKings and FanDuel, which operate their traditional DFS contests in the state. DFS is a rounding error in their overall revenue, however.
DraftKings Launches ‘My Budget Builder’ to Enhance Its Responsible Gaming Tools and Resources (press release): “DraftKings Inc. today announced the launch of My Budget Builder, a new Responsible Gaming (RG) tool that players can use to set customized limits and reminders through a guided, easy-to-use experience. My Budget Builder is a tool that players can use to help manage their entertainment budgets across DraftKings platforms, including Sportsbook, Daily Fantasy Sports/Pick6, and Casino.”
“My Budget Builder is a new kind of Responsible Gaming tool — intuitive, proactive, and personalized,” said Lori Kalani, Chief Responsible Gaming Officer at DraftKings. “It reflects our ongoing commitment to creating fun, enjoyable environments for our players. By enhancing how players engage with limit-setting, we are providing another resource that players can use to help them play responsibly.”
“Players can access My Budget Builder via the DraftKings Responsible Gaming Center online or through the DraftKings app. The experience guides players through several categories where they can create a personalized gaming budget around deposit amount, total wagers, maximum wager size, loss limits, time spent, contest entries, and contest fees. Players will also have the option of setting either limits or reminders through My Budget Builder. After reviewing a summary of their choices, players can confirm and apply their limits or reminders for a specified duration (e.g., day, week, or month), creating a personalized budget as they see fit. Limits can be decreased at any time but cannot be increased until the selected time period expires.”
Reading the line: Again, we should be applauding RG efforts from operators whether they are perfect or not. DraftKings, FanDuel and other sportsbooks are continuing to put resources into RG; how effective they are remains to be seen. It also comes as the American Gaming Association is making a push in RG nationwide and for all forms of gambling. Clearly some of this is being done for optics in what has been a tough environment for legal sports betting of late, but these are actual tools that should also help real people.
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More gambling news
Three Interesting Things Kalshi's CEO Told CNBC (The Event Horizon): Kalshi CEO Tarek Mansour: “The increased funding is going to three things. One, we have built an incredible talent density in New York, in the city. We're looking to expand that. Number two, we're going to new market structures and scaling the number of markets. So we've gone from around 100 markets in October to 1500 today. And you know we're looking to 2 to 3x that till the end of the year. And last is after having proven the model and the success we've had this year, we've seen incredible influx of broker demand. So brokerages looking to integrate on Kalshi, we're expanding staff to basically be able to sustain that.”
New Jersey lawmakers swiftly approve sweeps ban over WPT opposition (SBC Americas): “In a matter of minutes, the New Jersey legislature acted swiftly and decisively to pass legislation prohibiting sweepstakes gaming in the state. There was no debate or discussion, just a quick vote on a busy day as the chambers worked against the July 1 budget deadline. The New Jersey Assembly was first to act on A5547, passing it by a 69-10-1 vote. Minutes later, it hit the Senate floor, where that chamber approved the measure 34-5. The bill next heads to Gov. Phil Murphy’s desk alongside a slew of legislation passed on Monday.”
Presser from the Social and Promotional Games Association: “The SPGA strongly urges Governor Phil Murphy to reject Assembly Bill 5447, a sweeping and ill-conceived ban on promotional sweepstakes-style gaming that has been rushed through the legislature to appease entrenched casino interests.
‘Governor Murphy has an opportunity to do what the Legislature would not—listen to facts, not fear,’ said a spokesperson for the SPGA. ‘This bill doesn’t just mischaracterize an entire industry, it ignores data, undermines innovation, and puts New Jersey’s reputation as a forward-thinking leader in tech and entertainment at risk.’”
California Tribes Engaged In Battle In Multiple Theaters: Ranking The Opponents (InGame): “For the last couple years in particular it’s felt like a nonstop battle for tribal gaming interests in the Golden State — with changing and multiplying opponents. Siva called it a ‘key moment’ for tribal unity. And Indian Country has collectively wielded some raw political power to maintain its grip on its exclusivity of regulated gambling, as evidenced by the activity in Sacramento. Upon that backdrop, we set out to take stock of the various opponents — from in-state cardrooms down to DFS, which after a decade of gray-area operation in the state may be banned, as Attorney General Rob Bonta’s office is expected to offer a legal opinion that daily fantasy sports games are not legal in the state. Included is a synopsis of each fight, the opposing force, actions taken on both sides, and the relative stakes.”
Maryland Proposes Reducing Online Sportsbooks’ Promo Deductions (InGame): “The Maryland Lottery on Monday proposed a change to the state’s sports betting regulations that would reduce the amount online sportsbooks can give away as promotional free bets. Currently, under Chapter 13 of the state’s “Sports Wagering Licensee Minimum Internal Control Standards,” after the first full fiscal year of operations, a sportsbook is allowed to offer as much as 20% of revenue in free play. That figure would drop to 5% under the new proposal. This figure would include only money generated by online sports betting. By lowering the amount that sportsbooks may offer as promo deductions, states are able to tax more of their revenue.”
VGW owner holds steady on bid to acquire full ownership of sweeps giant (SBC Americas): “VGW owner Laurence Escalante will not increase his bid to acquire full ownership of the sweepstakes casino giant that could be valued at approximately $2 billion. Escalante will not submit a higher bid for full ownership of VGW after proposing a $632 million buyout earlier this month. The proposed buyout was deemed a fair and reasonable offer by an independent expert provided by advisory solutions provider Kroll Australia. The independent expert determined Escalante’s $3.32 per share cash offer was adequate based on its comprehensive assessment of the company’s value of up to $3.70 per share.”
EDGE Boost Named Preferred Payment Method for World Series of Poker Event Series (press release): “EDGE Boost by EDGE Markets, a financial platform for smart bettors and gamblers, has partnered with World Series of Poker, the premier series of worldwide poker tournaments. The EDGE Boost debit card is now the preferred payment method for WSOP, offering ease of payment, safety and several exclusive on-site perks for tournament players. In past tournaments, WSOP players were limited to $10,000 per transaction and had to complete a lengthy approval process, often resulting in frequent cash deposits. Now, those using the EDGE Boost card through PayPal checkout can bypass traditional credit card verification. They can also make entries up to $250,000, which eliminates the need to carry large sums of cash at the event and increases security measures.”
“Poker players competing at WSOP events typically face many roadblocks funding their entry at the casino and managing any payout,” said Seni Thomas, CEO and Founder of EDGE Markets. “In the past, players had to bring multiple checks from different accounts which complicated the deposit process and led to security issues of players walking around with large cash rewards. EDGE Boost simplifies this entire process and makes it entirely digital. Now these players can focus on their game without worrying about these extra factors. This partnership lays the groundwork for the future of gaming.”
Ifrah Law has been at the center of advancing iGaming in the U.S., shaping groundbreaking legislation, leading precedent-setting cases, and guiding clients that span the iGaming ecosystem through every phase of their business journey. Learn more at IfrahLaw.com.
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The Cashout: How US Online Gambling Has Changed In The Past Year
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