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August 14, 2018

Maybe Charles Barkley Isn’t The Best Spokesperson For A Sportsbook

Bart Shirley August 14, 2018
Charles Barkley DraftKings Sportsbook

Last week, DraftKings announced NBA Hall of Famer Charles Barkley would appear in a series of commercials. For right now, those commercials will only play in New Jersey, since that’s the only active area for the DraftKings Sportsbook.

The announcement seemed benign at the time. However, in light of Barkley’s history, his appearances may not be the best idea for DraftKings.

Barkley is one of the most high profile athletes who has lost millions gambling. By his own admission, his gambling has gotten out of hand before, and he has lost more than $1 million in a single session “10 to 15 times.”

The whole picture is the problem, not Charles Barkley

For Barkley, who has made hundreds of millions of dollars, it may not be an addiction. He may simply like to gamble, and he has the wherewithal to lose more money than most.

However, the manner in which he’s portrayed is quite troubling. The premise of both commercial spots is to have Barkley interact with a medical professional known as “Dr. Aftkings.”

In the first commercial, Barkley is a patient in the doctor’s office. He is dressed in a medical gown and obviously suffering from some sort of ailment.

The doctor enters, and declares that he suffers from Acute Win Deficiency. The doctor then prescribes the cure: the DraftKings Sportsbook App.

Here is the ad:

Yikes!

Putting aside the humor value of the commercial, let’s examine the messaging here. In essence, you have a doctor prescribing gambling as a treatment for an ailment. To a patient. A patient with a history of gambling losses that might indicate problem gambling.

I realize that I may be reading too much into this ad, but seriously, what does DK want to convey here? Is DraftKings suggesting that players will win more money betting sports on the DraftKings app than anywhere else?

If the stories about the DraftKings vig are true, it’s not very likely. To couch the suggestion in terms of medical advice is a very sketchy position to take.

Genuine gambling is different than DFS

In fairness to DraftKings, the company has featured the Dr. Aftkings character in the past. The riff on the company name is easy and good-natured, so it makes for good commercial material.

A partnership with Charles Barkley is also not a bad thing, necessarily. Barkley is one of the biggest characters ever to play basketball for a living, and one of the few (along with Shaquille O’Neal) to stay both famous and relevant well past his playing years.

However, DraftKings needs to realize that offering sports betting is a whole different animal than offering daily fantasy sports.

DFS is an upstart practice. Its clientele is younger and technologically savvy. Its market is smaller — even though DFS growth has exploded, the industry is still only earning around $335 million in revenue per year.

Sports betting, on the other hand, is more of an institution. Its revenue in one state (Nevada) almost exceeds the entire DFS industry.

Entire generations of people have gambled through the legal sportsbooks of Nevada or through less-legal options in backrooms. Unfortunately, a more serious risk of addiction follows, too.

DraftKings cannot stick its head in the sand

As we reported last month, there are legitimate fears that the influx of sports betting to the country will lead to an uptick in compulsive gambling. The good news is that research indicates there probably won’t be too many new addicts to gambling.

The bad news is that the increased accessibility to sports betting will likely deepen existing addictions. The research also mentions that associated advertising for sports betting can have the same effect.

I’m not saying that DraftKings should not advertise its new product, but the context for its Barkley ads strikes exactly the wrong note. There’s a reason that so many casino advertisements significantly emphasize responsible play.

DK is still a rookie in the sports betting industry. Hopefully, these ads are a greenhorn mistake only, rather than a sign of something more permanent.

These Four States Could Be The Next Landing Spots For The DraftKings Sportsbook

Juan Carlos Blanco August 14, 2018
DraftKings Sportsbook

The launch of the DraftKings Sportsbook in New Jersey a week ago dominated headlines with good reason – the daily fantasy sports industry leader beat an array of well-established names in the sports betting industry to the punch with respect to mobile wagering in the Garden State.

Naturally, that begs the question of whether they could pull off the same feat elsewhere, and if so, how soon. Given that DraftKings has gotten what is presumably the hardest part – an initial launch – out of the way, subsequent debuts could have more of a “turnkey” quality to them.

And with the company having plenty of time before the next wave of state legislatures potentially pass sports betting bills — or states with laws on the books actually get rolling — many of the kinks should essentially be worked out.

With that being said, let’s examine where the best bets for any late 2018/2019 DraftKings Sportsbook debuts reside:

Pennsylvania

Sports betting is already fully legalized in the Keystone State, although onerous licensing fees ($10 million) and tax rates (36 percent) have put a serious damper on progress and licensing applications.

Only current gaming license holders can apply for a sports betting permit according to current state law, so DraftKings will need to partner with such an entity. That’s the case in New Jersey, where they are operating under one of the online gaming licenses granted to Resorts AC.

The one major obstacle in play appears to be the almost complete lack of willingness on the part of the state’s casinos to bite the bullet and submit their applications in light of such back-breaking fees. Notably, there’s been some modest movement on that front recently. Parx Casino, the largest in the state in terms of revenue, announced a partnership with sports betting company GAN to provide the underlying sports betting platform for both a future land-based and online sportsbook.

West Virginia

West Virginia is another jurisdiction where legality is no longer an issue. However, it’s also a state where there hadn’t been any tangible progress toward the actual availability of sports betting until very recently.

Penn National – which operates Hollywood Casino Charles Town — was awarded the first gaming operator license in the state in August. Meanwhile, DraftKings rival FanDuel was right behind them in securing their permit to operate in partnership with The Greenbrier.

Under West Virginia law, the state’s five existing gaming facilities can offer sports betting under the purview of the state’s Lottery Commission. Mobile wagering is also fully legalized in the state, and as with New Jersey, each license holder is allowed up to three online “skins”. That naturally opens the door for DraftKings Sportsbook, although to date, no serious rumblings of potential partnerships have emerged.

Despite apparent ongoing tensions between Gov. Jim Justice and state legislators regarding the lack of integrity fees for the sports leagues in existing law, the sports betting train is on track for NFL season — if not slightly sooner — at the aforementioned facilities.

New York

Real-money gaming issues never seem to be an easy piece in the Empire State. New York became one of the epicenters of the daily fantasy sports legalization battle earlier this decade before regulations eventually passed in a memorable late-night, down-to-the-wire vote in June 2016.

Sports betting has encountered a similarly thorny legislative path. The push for widespread legalized wagering had some momentum during the 2018 legislative session. However, both Senator John Bonacic and Assemblyman Gary Pretlow – long-time champions of the issue – saw their respective bills get stonewalled when both chambers adjourned their 2018 sessions in June.

Opposition from upstate tribes was labeled as one of the major culprits for the non-passage. However, Pretlow –the acting chairman of the Racing and Wagering Committee in the Assembly – has vowed to address statewide sports betting legislation at the onset of next year’s legislative session in January.

There’s one saving grace for the moment – a 2013 referendum that authorized wagering at the state’s four upstate commercial casinos if PASPA was ever repealed. That piece of legislation allows sports betting at the following locations:

  • del Lago Resort and Casino
  • Tioga Downs Casino
  • Rivers Casino and Resort
  • Schenectady Resorts World Catskills

However, by the law’s wording, mobile wagering appears to only be authorized within the physical casinos themselves. That would seemingly make the current environment less than ideal.

Nevertheless, DK has inked a deal with del Lago for retail and online sports betting. If and when the physical sportsbook comes to pass, it would be the first DraftKings-branded retail sportsbook location. And while any online wagering would be limited to taking place within del Lago for now, it would provide DK an initial digital foothold in advance of a possible passage of widespread sports betting legislation in 2019.

Connecticut

Sports betting continues to be in a decidedly gray area in the Constitution State. There had been plenty of talk about a special legislative session to ideally pass a bill this summer. However, conflicts with the influential Mashantucket Pequot and Mohegan tribes about whether they have exclusivity to sports betting has essentially slowed down any movement to a halt.

Consequently, the picture for DraftKings remains much murkier in Connecticut than in the three aforementioned states. Negotiations between the state and the tribes are reportedly ongoing. With each side seemingly entrenched in their respective positions, though, chances of a 2019 passage and a subsequent point of entry for DraftKings Sportsbook look to be slightly less than 50 percent.