The Takeaway: Oh So Now Peer-to-Peer Sports Betting Is A Problem?
Gambling roundup: Ohtani interpreter sentenced; Ohio sports betting tax hike gets chilly reception
If you’re trying to keep up, the newest bogeyman in the gaming/gambling landscape is sports event trading — aka sports betting on futures at a platform like Kalshi.
To be clear, the new “bogeyman” is still small potatoes as we sit here. Only $3 million has been bet on the Super Bowl at Kalshi, compared to an estimated $1.5 billion at regulated sportsbooks by the end of the game. But it has the chance to be huge, because right now it can be done in 50 states and we’re not sure exactly how far down the rabbit hole platforms like Kalshi will be able to go with more granular markets.
Here’s the crux of today’s Takeaway: It feels ironic to be worried about the rise of sports event markets. Why? Because in America, we have spent the past 15 years continually moving the goalposts of what is sports betting, particularly when it’s peer-to-peer.
Daily fantasy sports 1.0 — think the original DraftKings and FanDuel — started this trend. Nearly from the beginning, I and many others argued this was peer-to-peer gambling. But we’ve gotten to the point where DFS is no longer challenged on this front and is widely accepted as a game of skill. I shrugged my shoulders and moved on with life.
DFS 2.0 — think PrizePicks, Underdog, et al — continued the trend. From a user standpoint, the pick’em/parlay games they offer are unquestionably gambling, albeit with an element of skill. Legally, we’ve settled into an equilibrium where these games are considered legal DFS contests and/or games of skill in the states in which they operate, barring future regulatory or legal action. If it’s peer-to-peer, you can now run these games in 30+ states, like the DraftKings Pick 6 product. Again, I just work here; I am not the one who says what operators and states can and can’t do.
As of the past year, we also have sweepstakes sports betting exchanges. Because of a sweepstakes mechanic, a proxy for peer-to-peer real-money sports betting is operating in 40+ states. Is it legal? Maybe? Probably? Your guess is as good as mine. I was already tired of arguing what’s gambling and what’s not a bullet point ago. But to illustrate my point, here’s well-known affiliate gambling site Covers.com putting lines for Novig and Prophet right next to the regulated sportsbooks, and in fact in front of them. If you think they’re doing that because people really like to bet with pretend money, I have a bridge in Brooklyn I’d like to sell you.
So pardon me if I can’t believe the world is going to end because of what Kalshi is doing. How am I supposed to think differently, when so much peer-to-peer sports betting/skilling has gone on relatively unabated? It makes me think of this popular Twitter meme when we want to put the genie back in the bottle on sports events trading:
To be clear, I don’t think widespread quasi-regulated sports event trading is a great idea. On the short list of potential problems, especially if it expands beyond Kalshi, are responsible gambling and sports integrity concerns.
I would hope Kalshi and others will attempt to solve for those and other issues that arise if sports event markets continue. But will the apocalypse come upon us if sports event trading doesn’t go away? Maybe I have just become too skeptical after doing this for a decade, but I don’t think so.
If anything, I hope it’s a clarion call to states that their regulated sports betting industries don’t exist in a vacuum.
I wrote more about the prediction markets side of things at The Event Horizon today as well:
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Gambling News Roundup
Shohei Ohtani's former interpreter sentenced to nearly 5 years in gambling-linked theft (NBC News): In addition to the 57-month, sentence, Ippei Mizuhara was also ordered to pay more than $18 million in restitution, with the majority going to Ohtani and the rest to the Internal Revenue Service.
NYX’s Super Bowl campaign makes it the first makeup brand to partner with betting platform DraftKings (Glossy): “While NYX’s previous sports marketing plays have been through more traditional means like TV spots or sponsorships of athletes like basketball player JuJu Watkins, the new campaign takes a different approach. In addition to a social campaign with influencer Brittany Broski (1.9 million Instagram followers), NYX is partnering with the sports betting platform DraftKings. As part of the campaign, NYX is sponsoring a number of free-to-play bets on DraftKings related to predictions like which athletes will be shown kissing their partners after the game. The prizes for these competitions will be up to $60,000.”
So far, I believe there’s only confirmation that FanDuel will have a spot during the Super Bowl, with its Kick of Destiny 3.
BetMGM went big with its Tom Brady commercial last year.
Pump the brakes on Texas sports betting (Fox San Antonio):
Gov. Greg Abbott recently sounded positive notes about legal sports betting coming to Texas.
Context: “‘What did he say: He said he doesn't have a problem with it,’ Scott Braddock, the editor of the quorum report and co-host of Texas Take with Wallace, said. ‘It's not like he is going to be pushing it actively." Braddock said, ultimately, the statement from the governor means nothing because Patrick is the main holdup for sports gambling legalization. ‘It doesn't change the opinion of the Lieutenant Governor even a little and it's not something that he would push the Lieutenant Governor or the speaker of the house about,” Braddock said.
Still, Abbott’s stance and acknowledgment of sports betting legislation is better than if he were opposed.
Maybe we can cool it on betting on airplanes now (Delta): “Delta is exploring a first-of-its-kind collaboration with DraftKings, a leading digital sports entertainment gaming and technology company—which we expect to come soon to Delta Sync Wi-Fi. The potential collaboration contemplates that eligible SkyMiles Members can access free gaming as an additional offering on Delta Sync Wi-Fi available through SkyMiles Members’ personal electronic devices. The Delta Sync experience does not include gaming of any kind using real money or miles.”
SkyMiles users under 21 will not be able to access the DraftKings part of the “experience.”
Gigabytes of virtual ink have been written about the possibility of betting on airplanes, which seems far away and unlikely both because of legal and practical reasons.
DeWine’s proposal to hike sports betting tax for a new Cleveland Browns stadium faces legislative skepticism (Cleveland.com): “However, state Rep. Brian Stewart, a Pickaway County Republican and the chair of the House Finance Committee, noted that his fellow GOP lawmakers – who dominate both chambers of the Ohio legislature – already doubled the sports-betting tax at DeWine’s request in the last state budget, from 10% to 20%. ‘We’ve not even finished two football seasons, and now we’re talking about quadrupling that tax? I think that’s going to generate a lot of discussion,’ Stewart said. ‘I don’t think anything’s dead on arrival, but I do think that any time you’re talking about tax increases in the Republican Party, that’s going to get a skeptical eyebrow raise.’”
Gambling man: Inside Howard Lutnick’s scandal-tainted sports betting gambit (Politico): “Long before he was President Donald Trump’s pick for Commerce secretary, billionaire financier Howard Lutnick got into the sports gambling business. Lutnick wasn’t in it to make bets himself. He founded a Nevada company that allowed people to wager on their phones — a decade before mobile sports betting became a booming industry nationwide. But the company, Cantor Gaming, repeatedly violated state and federal laws, authorities said. One top executive pleaded guilty to illegal gambling conspiracy. Federal law enforcement officials said the company ran its operation with ‘total disregard’ for laws and regulations designed to prevent illegal gambling and money laundering. The company even partnered with a seedy illegal gambling ring called the ‘Jersey Boys’ to minimize its exposure to big financial losses, according to a Justice Department settlement.”
Coast casinos optimistic as Mississippi lawmakers push mobile sports betting bill (WLOX): “Officials from at least two Coast casinos are optimistic lawmakers will pass legislation on HB 1302 championed by House Gaming Chairman, Representative Casey Eure (R-Saucier). ‘We are one step closer, so we’re excited,’ said Brad Carpenter, Sportsbook Manager of Scarlet Pearl Casino Resort in D’Iberville. ‘We’ll be like everybody else, paying close attention to what happens in the senate. If it passes, we’ll be ready. And I think a lot of the guests we have will be excited, too, to be able to place the bets anywhere in the state.’”
Stream the Big Game with Bet Vision 2.0 from Genius Sports (Fanatics PR): “Customers can catch every play in full screen and have your bets display on the side. Available only with Fanatics Sportsbook.”
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