The Agenda

Playing With Fire

By Roger Gros, Publisher

As we entered into 2022 last month, there was lots of speculation about the legalization of gambling in the few states in the U.S. that still lack it. The giddiness about sports betting in North America continued to surround the handful of states and provinces that may permit it in 2022 and how such a competitive market is developing.

For those advocating these positions, I have just three words:

Stop. Just. Stop.

Because the out-of-control marketing of sports betting across the country is causing a backlash that could eviscerate the industry in many varied and serious ways.

Sports betting in the U.S. is in its infancy. The pressure to establish market share is enormous. Thus, this barrage of ads is turning off the American public, and the content of the ads is skating a fine line between fun and fantasy (and I don’t mean DFS). And let’s name names.

Caesars’ “emperor” seems to be all over the place. Being a fan of Curb Your Enthusiasm, I’m a big fan of JB Smoove. I like to see him stretch his acting chops. But not every single moment while I’m watching a sports event.

DraftKings and FanDuel. Did you not learn your lessons at the dawn of the DFS movement, when your constant and repetitive ads hammered the airwaves during each and every game, match or tournament? You woke up the devil of state attorneys general who realized that maybe there was some gambling going on that wasn’t permitted in their states. It ended up costing you multimillions of lobbying dollars to make it right again.

And while I really like the irreverence of Barstool Sports’ Dave Portnoy and his ability to not be canceled by the “woke” crowd—not to mention his “just one bite” pizza reviews—regulators will not be handled so deftly. One slip-up and his gambling partnership with Penn National could collapse, and the implications may go far beyond just that business.

Now some history. Back in 1994, an effort was made in Florida to legalize casinos. It was led by some of the largest companies in the gaming industry. And it failed miserably because it wasn’t viewed as a grassroots effort, but an effort to impose gambling upon a state whose citizens might have enjoyed a punt now and then but didn’t like the method that was being used. After that experience, the industry always took the position to let a grassroots movement develop before jumping in with its support.

That position led to the expansion of gaming in many states across the country—except for Florida, ironically, which several years ago passed a measure that requires a statewide referendum for any effort to expand gaming.

And this law has led to the current fight to place a sports betting measure on the November ballot in Florida. Unlike the current lockout of the players by the owners of Major League Baseball teams, which is characterized as billionaires fighting with multi-millionaires, this one is more simple. It’s billionaires (the Seminole tribe) fighting with billionaires (Las Vegas Sands, FanDuel, DraftKings, etc.). Even with a statewide referendum, Florida voters are feeling bullied. This can’t end well. In both situations, the loser may be the common man who simply wants to watch a ballgame or make a bet.

The mess in California ballot questions is the same, where as many as four ballot questions on sports betting could confound voters in November. Please stop and reconsider your positions.

Also, please cease and desist in your attempts to get gambling legalized in both Georgia and Texas. Your efforts have been ham-fisted and wrong-minded in both states.

What could happen if we continue this ride on a runaway train? We’d be lucky to get away with an advertising ban similar to the ones Europe is experiencing because of the aggressive marketing of its gambling ventures.

For sports betting the danger is clear and present. The awful New York legislation, featuring a skyhigh tax rate and a limited number of competitors in the market, could make states that have already legalized sports betting sit up and take notice. “New York and Pennsylvania have a vibrant market with a high tax rate and are doing fine,” they’d say. “We’re getting cheated. Let’s raise our rate and get our fair share.”

The noted gaming attorney and academic I. Nelson Rose has written often about how backlashes in gambling occurred over the last 100 years or more. Several of them wiped out the industry as it was known at that time.

Let’s not allow that to happen again. Let’s run silent, run deep for a couple of years. Let the market settle down. Let the players get comfortable with the product and see what happens. This could be a crucial time in gaming and we need to have a plan.