The SCALER Weekly 4/17/24

Stay up to date with the Sports Betting Industry with The SCALER Weekly. SharpRank’s updates on Compliance, Audit, Legislation, Ethics, & Regulation.

NCAA’s Social Media Monitoring and Prop Bet Campaign

The NCAA has employed a third-party company to monitor social media and curb harassment directed at student-athletes, coaches, and officials. NCAA President Charlie Baker expressed concern over the significant challenge of protecting game participants from backlash due to sports betting, prompting measures to address the issue. Baker’s campaign against college player prop bets aims to protect involved parties from harassment, with efforts to restrict such bets in states with legalized sports betting. Despite reservations about student gambling, Baker acknowledges the NCAA Final Four’s future location in Las Vegas, emphasizing the importance of implementing policies and technologies to support student-athletes amidst evolving challenges. The NCAA’s handling of the men’s and women’s tournaments faced criticism, including errors like a misaligned 3-point line and the removal of an official with ties to one of the competing schools. Baker acknowledges these missteps and emphasizes the need for improvement to uphold the integrity and significance of the NCAA tournament.

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FanDuel CEO Advocates Tribal Collaboration for California Sports Betting

FanDuel CEO Amy Howe discussed the future of sports betting legalization in California during a panel at the Indian Gaming Tradeshow & Convention in Anaheim. Highlighting the need for a unified approach with tribes, Howe emphasized learning from past mistakes and working together with the over 100 tribes in California. Acknowledging previous unsuccessful efforts and tribal opposition, Howe admitted to past errors and showcased a commitment to understanding tribal perspectives through recent hires of tribal industry experts. Chairman James Siva reiterated the importance of tribes leading gaming operations in California, with Howe emphasizing the necessity of tribal consensus for future initiatives. The panel’s tone indicated a shift towards collaboration between commercial operators like FanDuel and tribes, signaling a new approach to potential sports betting legalization in California.

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New Jersey Senator Proposes 30% Tax Increase on Online Gambling and Sports Betting

New Jersey Senator John McKeon has introduced a bill to increase the tax rate for online gambling and sports betting to 30%, significantly higher than the current rates of 15% and 13% respectively. The bill, Senate Bill 3064, would amend existing legislation and take effect from January 1st following its enactment. If passed, New Jersey’s tax rates would become among the highest in the US. The move follows a trend seen in Ohio, where tax rates were recently doubled. Despite conflicting studies on the economic impact of the state’s gambling industry, New Jersey’s revenue from gambling has been consistently high, reaching a record $5.78 billion in 2023. Seen as one of the leading indicators, a move in New Jersey would likely ripple out to other jurisdictions considering similar tax amendments.

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Mississippi’s Shift in Online Sports Betting Legislation

The Mississippi Senate’s passage of HB 774, aimed at expanding online sports betting, saw a surprising turn with a strike-all amendment reverting to the current retail betting law. Despite this setback, the amended bill sustains discussions and invites further input from across the state, indicating a commitment to ongoing dialogue. Senator David Blount stressed the amendment’s role in fostering engagement and announced the bill’s advancement to conference for additional consideration. While the House had previously endorsed online betting in February, the Senate’s amendment shifts the focus, prompting expectations for potential revisions and the bill’s ultimate fate.

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Delaware Considers Opening Mobile Sports Betting Market to Competition

Delaware, which legalized mobile sports wagering less than four months ago, is now considering legislation to introduce competition into the market. Rush Street Interactive’s BetRivers app, available through partnerships with Delaware’s three racetracks, has been the sole provider thus far. Representative Franklin Cooke has introduced HB 365, aiming to allow each racetrack to partner with up to two additional sports wagering sites, potentially opening the door for companies like FanDuel and DraftKings to enter the state. Currently, bettors in Delaware can place wagers at the racetracks, participate in NFL-only parlay bets at approved lottery sites, or use the BetRivers app. The proposed legislation would require mobile sports gaming companies to obtain a $500,000 license, contribute 18% of their proceeds to the state, and allocate an additional 1.5% to the horse racing industry. A portion of the state revenue would support compulsive gambling treatment. However, the bill would still prohibit betting on University of Delaware and Delaware State University sporting events.

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Legal Sports Betting Surges During March Madness, But Illegal Activity Remains a Concern

The March Madness tournament of this year marked a significant milestone for legal online sports betting, amassing $2.4 billion in wagers, as reported by gambling market intelligence firm Yield Sec. Despite this surge, illegal bets nearly doubled the amount, reaching $4.3 billion, showcasing the pervasive influence of unlicensed operators. While legal sports betting generated substantial tax revenue last year, illegal gambling deprives states of potential earnings. The fragmented regulatory landscape and lax oversight exacerbate the problem, allowing dubious entities to operate freely. Calls for tighter regulations, exemplified by NCAA President Charlie Baker’s push to ban certain types of bets, highlight growing concerns about the integrity of sports and the need for a unified government approach. Yield Sec CEO Ismail Vali emphasizes the importance of coordinated action between states to curb illegal gambling and maximize tax revenue from licensed sportsbooks, emphasizing the long-term benefits of responsible regulation.

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Shohei Ohtani’s Ex-Interpreter Faces $16 Million Fraud Charges

Former interpreter for Japanese baseball star Shohei Ohtani, Ippei Mizuhara, appeared in court on a bank fraud charge, accused of embezzling $16 million to cover illegal gambling debts, though he didn’t enter a plea. Mizuhara’s lawyer issued an apology on his behalf, hinting at negotiations for a plea deal, while the judge ordered him to undergo gambling addiction treatment and refrain from contact with bookmakers or Ohtani. The case, which exonerated Ohtani, spares the Dodgers and MLB a potential scandal, echoing past controversies like Pete Rose’s gambling allegations. The investigation stemmed from a broader probe into illegal sports gambling in Southern California and money laundering through Las Vegas casinos.

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Jontay Porter: NBA Betting Controversy

Toronto Raptors center Jontay Porter allegedly operated a VIP account at FanDuel, wagering millions from 2021 to 2023, with over 1,000 bets placed, although no wagers were allowed on NBA or college basketball. Amid a pending NBA investigation, Porter, who left multiple games early due to injuries, faces scrutiny for unusual betting patterns, prompting a request for account disclosures from Colorado gaming regulators. As a former five-star recruit, Porter’s career trajectory now hangs in the balance.

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