- 6/14/2024
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SportsTranscript
00:00Well, well, it's a Friday.
00:04We got Pat Evans back with us here on the show from Legal Sports Report.
00:07We're going to go over the latest in a couple of states, we don't talk about that often
00:11here on the show.
00:12Updates in Tennessee, Arizona as well.
00:14Let's bring Pat in.
00:15And Pat, summertime I know for you in Michigan, getting ready of course for a little outdoor
00:20stuff I know is in your future for the weekend as well.
00:23Always great to see you.
00:24Thanks for coming on the show.
00:25No, thank you so much.
00:26I'll tell you, it's so important for me to be on the show that I was up late traveling
00:31back from a conference.
00:32I got in at 2 a.m. after sitting on a tarmac in Atlanta for two hours with no A.C.
00:38So I might be a little off my game today, but I'm here just because I needed to see
00:42you.
00:43Oh, well, I mean, I couldn't be more honored, Pat, that you would make that appearance here
00:48on the show, especially after no A.C.
00:51I can't imagine sitting on a plane with that.
00:53But Arizona, they could use a lot of A.C.
00:55It gets very hot there, of course.
00:57It's a dry heat, as they say.
00:58Anyway, bad joke.
01:00Arizona Department of Gaming with an announcement.
01:02I know that they've had sports betting there.
01:04They've had sports betting operators there.
01:06But it has been mostly dominated by a couple of different sports books.
01:10Why open it up for other providers?
01:13Simply put, get some money.
01:14Is that it?
01:15I mean, yeah.
01:16I mean, the licensing fees would help a little bit, I'm sure.
01:19But yeah, it's such an interesting market, to your point, FanDuel and DraftKings, as
01:24well as BetMGM and Caesar, control, I think, more than 90% of the market.
01:28Now, there's 16 operators in the state.
01:31So that's, you know, do the math there, that's 12 operators that have 10%.
01:37That's crazy.
01:39But sure enough, they're opening up the license application process again, the third time
01:44they've done such a thing since the market launched in fall of 2021.
01:50And it's largely because there are, in Arizona sports betting law, 20 slots for sports betting
01:56operators, 10 for the sports teams in the state and 10 for the tribes.
02:02There's been kind of a revolving door in Arizona at the bottom end of it.
02:07We've seen quite a few operators drop out, Fubo, Twin Spires, recently Unibet and WinBet
02:14have all pulled out.
02:16So right now there's only 16 operators.
02:17So there's four slots open.
02:19And I figure, hey, let's go ahead and try to fill those back out.
02:25What operators are left?
02:26I mean, in the last two rounds of open application periods, we've had Fanatics jump in and Bet365
02:32jump in.
02:33Those are two big players in the industry kind of making their way and trying to crack
02:38into any sort of market share.
02:41So what is left?
02:42I mean, Circa with their huge Las Vegas resort, not too far away from Phoenix.
02:47You have to imagine they're going to look at the market again.
02:51Maybe Underdog looking to expand their market as they're only live in North Carolina at
02:55the moment with their sports betting product.
02:58And it's interesting because there's a few things.
03:01There's only been eight sports team licenses given out since the beginning because according
03:07to the law, you have to be playing at the highest level.
03:10And I think your stadiums have to have a certain amount of capacity.
03:14And so, you know, we know the USL team, the second tier soccer team has applied a couple
03:19of times, but they're not at the highest level.
03:21So they haven't been granted a license.
03:24There are two, well, there's an indoor football league team in Phoenix that has a license.
03:29So that's deemed highest level.
03:31There's two other IFL teams in Arizona that could also get a license.
03:36And then I just heard a rumor yesterday that the rodeo, PBR or the like, I'm not exactly
03:42sure what organization might be looking at securing a license in Arizona.
03:47So that could be the sports teams angles.
03:49I have to imagine the tribes, there's 16 tribes with gaming operations and there's only eight
03:54licenses connected to the tribes right now.
03:56So I have to imagine that'll fill back out with two more tribes.
04:00Interestingly enough, there are two smaller sports books, Sahara Betts, which is of course
04:05tied to the Arizona Coyotes, which no longer exists.
04:09Well, that's a complicated situation, but they're staying for now.
04:14And then Desert Diamond, which is a tribal endeavor that's actually outperforming a lot
04:21of sports books like ESPN Bett and Bett River.
04:25So lots of options in Arizona.
04:28This will close sometime in July and then we'll know early August if any new operators
04:32are coming.
04:33So it's a fun state to pay attention to and I hold it close to my heart because it was
04:38one of the first states I started paying attention to when I joined LSR.
04:41Yeah, no, I remember you talking about it initially when you've been on with us now
04:44for over a year, Pat.
04:45So I totally get that.
04:47Now this is an embarrassing story.
04:49I don't know who it's embarrassing for.
04:51You'll have to tell me here.
04:53It occurs in the state of Tennessee where there's a couple of sports books that were
04:58fined because they couldn't pay the winners.
05:01I mean, is this an accurate story?
05:04If this is true, Pat, like who's to blame here?
05:06Is it the state?
05:07Is it the sports betting operators?
05:09This can't be allowed throughout the country, can it?
05:13Well, Tennessee is an interesting market and for one of them is Fanatics.
05:18They self-reported that they allowed a couple of sports betting accounts that had self-excluded
05:23themselves to come off that list.
05:26Now that was the state level one.
05:27They caught that they were also on their nationwide self-exclusion list.
05:33So they were able to say, well, we need to fix this code, did it, self-reported, agreed
05:38to a fine with the committee.
05:40Zen Sports, on the other hand, was found in December to not have enough money in their
05:45bank account to cover any sort of all their liabilities.
05:50And that's a big no-no.
05:51There's a huge, if you go to the story at Legal Sports Report, there's a huge kind of
05:56stipulation that the spokesperson at the council sent me and said, you know, they didn't meet
06:00this.
06:02Apparently it was just some financial, you know, not doing it right.
06:07I don't know.
06:08I don't know how to put that.
06:11But supposedly they've been good since then and they've carried enough money in their
06:15account to cover all the liabilities.
06:18But again, you know, you never know with these small operators and kind of operators that,
06:24you know, Zen Sports not in any other state, you know, you have to wonder, are they in
06:29trouble and then what's going to happen after that?
06:31So again, a state just kind of interesting to watch and like you said, not necessarily
06:36a great issue to get fined for.
06:38But again, so far they say, and the wagering council has said that they're in accordance
06:44with the law at this point.
06:47But who knows if they will be in the future.
06:49So again, we'll watch it closely and let you know.
06:52Yeah.
06:53And that's why you guys cover it at Legal Sports Report.
06:55Another story that you cover, of course, is the offshore market.
06:58We talked about this on the show earlier in the week, and this is one that I can't figure
07:01out, Pat, at all.
07:03This is the state of Michigan, which is where you live.
07:06The control board wants Bovada out of the market.
07:09They don't want them to operate.
07:11I mean, they're illegal anyway.
07:12Why would they listen?
07:13Well, what's going to happen?
07:14I mean, explain this one to me.
07:17I don't get this one at all.
07:19So this was, so at the conference that I was just at, at the North American Gaming Regulators
07:24Association, Michigan was kind of the talk of the town.
07:28You know, a couple of panels said, you know, actually one panelist said they are the varsity
07:32team of regulators in the U.S. gaming industry.
07:35So that, you know, the AGA says, look at Michigan to see what they're doing.
07:39But to your point, and a couple industry sources told me that this week, you know, Bovada is
07:44already illegal.
07:45Why do they have to listen?
07:47They're not at the will of the gaming board and see what happens.
07:51That said, it sounds like multiple regulators are going to send similar CNDs to Bovada and
07:59see where it, again, kind of to your point, again, it's illegal in these markets.
08:03They don't have to respond at all.
08:05I think the deadline for Michigan was today or yesterday.
08:08I don't recall exactly.
08:09But anyway, it was a huge issue at the NAGRA conference.
08:14And, you know, one panel was kind of talking about, you know, what's next in the industry
08:20and where are we going in regulations?
08:22And, you know, they were talking about raising taxes that we saw in Illinois and we've talked
08:26about a lot.
08:27They talked about the NCAA prop bet bans, that we could see more of those.
08:34And then somebody goes, listen, this is already a very heavily regulated industry.
08:39We all know we're doing our jobs.
08:41We know that this is catching a lot of things that hadn't been caught in the past in terms
08:46of, you know, the players doing betting and any sort of scandals.
08:51So let's turn our attention to the unregulated market where the scandals are actually really
08:55dangerous and can really stem from now.
08:59And so, yeah, it's going to be interesting to watch after this conference, kind of what
09:02regulators turn their attention to more in the coming months.
09:06Yeah.
09:07Keep me updated on this one, Pat, because this has bizarre written all over it.
09:10So we'll see what it holds for the future.
09:12Thanks again for coming on.
09:13Have a great weekend.
09:14Thanks, Greg.
09:15You too.
09:16Thanks, Greg.
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