IGA Tradeshow: Six years later, sports-betting and igaming expansion slows down

April 11, 2024 3:38 PM
Photo: CDC Gaming Reports
  • Buck Wargo, CDC Gaming Reports
April 11, 2024 3:38 PM
  • Buck Wargo, CDC Gaming Reports

Nearing six years since the Supreme Court struck down a federal ban on full-fledged sports betting outside of Nevada, providers are exploring their next opportunities in sports wagering and igaming, both of which have slowed at the legislative level across the country, and preparing tribes for their future.

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Brendan Bussmann, managing partner of B Global, moderated a panel discussion at the Indian Gaming Association Tradeshow on Wednesday concerning the tools needed for the transition from land-based to online gaming. Bussman expressed doubt about more expansion of sports betting this year; if it does occur, it will be limited to Missouri and Minnesota. States have been reluctant to expand igaming over concerns of cannibalization and problem gambling and no states are expected to legalize it this year.

Dan Shapiro, senior vice president and development officer for Caesars Digital, said Caesars has 17 tribal partners across the country and many are longstanding relationships. Those have expanded a lot in the last six years as mobile and retail sports betting have grown.

“We’ve been in North Carolina with the Cherokee for more than 20 years and this was an all-new endeavor. It was a healthy dialogue and an educational process over the new regulatory framework for sports betting,” Shapiro said. “The other big point of discussion we continue to have today is how to maximize the brick-and-mortar footprint and the database we’ve built in North Carolina over decades and take advantage of the great partnerships the Cherokee have with the local professional sports teams. It’s something that continues to evolve.”

North Carolina was complicated; with retail sports betting, there’s an exclusivity of mobile betting on tribal lands regulated by the tribal gaming commission. Statewide mobile, however, is regulated by state entities.

“You have different pieces working together and different reporting requirements,” Shapiro said. “It can be complicated and it’s not a one size fits all approach.”

In Maine where they work with three of the four federally recognized tribes, the tribes are technically the operators, while Caesars is a service provider.

“There’s a revenue share where we have to figure out how to report that to the state,” Anderson said. “There are a separate set of issues in each jurisdiction that we have to work through. It’s not a light lift when you are launching in a jurisdiction.”

Bussmann said in most every state there are multiple tribes that have different interests and routes they want to take. He asked if those tribes need to be aligned when it comes to the regulatory and operational aspects even if they choose a different partner to work with.

“There’s no secret that we see the most success in states where the tribes are all discussing amongst each other,” said Jeremy Elbaum, chief commercial officer for DraftKings. “There’s no necessity for 100% alignment but an understanding of what every tribe needs should be suggested in the bill put together so when you go to a state that has as many tribes as they do, let them pick and choose what’s best for them. The more discussion between tribes always allows the states to maximize.”

Bill Anderson, senior director of business development with Sportradar, said while California doesn’t have legal sports betting yet, many steps can be taken now to understand how to get the maximum value out of the assets that are part of the property.

“The tribes are learning the nuances of running sports betting at the same time we’re learning the nuances of operating in a jurisdiction that is heavily dominated by the tribal operators,” Anderson said.

Shapiro said that with dozens of tribes in California, there needs to be a consensus on how the model looks before they move forward with sports betting in that state. Tribes and commercial operators were locked in a battle in 2022 for sports-betting expansion that resulted in two ballot measures failing overwhelmingly.

“That’s why it didn’t happen two years ago and that’s where hopefully there will be consensus building over the next couple of years,” Shapiro said.

Bussman said sports betting is one thing, but it’s a different conversation for igaming. Most tribes aren’t ready for it, but they want to be prepared when it does happen.

“It’s not just an added amenity as you saw with sports, but taking the existing infrastructure and adding on to the experience through a different channel,” Bussmann said.

Susan Quach, senior director of customer experience at OpenBet, said going online will attract more players to the sportsbook and there will be crossover opportunities from sports betting to igaming.

Elbaum said the tribe’s concerns about cannibalization by adding an online component needs to be addressed and pointed out to tribal leaders that there will be revenue growth instead and bring people to the property.

“It’s a learning process and several jurisdictions out there are showing the best practices that have worked to convert brick-and-mortar customers to online and vice versa,” Shapiro said. “And we can bring new people to properties rather than take them away from properties, which is obviously the big focus. While it’s new in most jurisdictions, we have a thriving online gaming business in New Jersey, Pennsylvania, and Michigan and a lot of things can be learned from those states.”