It’s not often that offshore online sportsbooks — where tens of billions of dollars are wagered by Americans every year — get much in the way of bad press. In fact, they’re often really good at getting good press mentions in the US.
That’s why it captivated the sports betting world and some of the mainstream media when Barstool Sports — and its leader, Dave Portnoy — suddenly took aim at one offshore book, called MyBookie.
We won’t detail the feud, but here’s a pretty good summation of what happened from Portnoy (warning, not at all suitable for work):
— Dave Portnoy (@stoolpresidente) April 9, 2019
Anyway, we’re not here to recount the blow by blow of the simmering feud. What we are here to tell you is what you should know about offshore sportsbooks, if you’re familiar with them or not:
Offshore sportsbooks like MyBookie operate illegally
Offshore sportsbooks are not sort of illegal or kind of illegal. They are operating illegally if they are taking wagers from bettors in the US. Full stop.
MyBookie is hardly the only sportsbook site or app that does this. There are dozens, if not more, although there are a handful of truly major players offshore.
Offshore sportsbooks violate at a minimum:
- The federal Wire Act
- Likely some other federal laws
- A variety of state laws that prohibit unregulated sports betting, or just ban it altogether.
The fact that some offshore books have a license to operate in Costa Rica or some Caribbean nation is great and all, and it makes them legal in that jurisdiction. People might cite an ongoing World Trade Organization dispute between the US and Antigua, but that is not a magic elixir for legality, either.
I’ll preface this next part as saying I am not a lawyer, and don’t take this as legal advice. But individual bettors at offshore sportsbook don’t seem to be under any kind of legal threat.
That doesn’t mean it’s entirely safe to do so, or that your money is under no threat if US law enforcement suddenly decided to start enforcing existing laws.
Anyway, the takeaway is that MyBookie (and other books) are illegally operating, like Portnoy says. Lots of people think, erroneously, that the US Supreme Court just legalized sports betting everywhere last year, which is not at all the case.
Legal US sportsbooks have an inherent disadvantage vs. offshore books
Other than the fact that you are trying to evade US authorities and likely have difficulties with payment processing, offshore books have a decided advantage over legal ones in the US.
First off, there aren’t many of the legal variety. There are legal mobile apps only in New Jersey and Nevada. There will be later this year in Pennsylvania and West Virginia and possibly Rhode Island.
If you’re in any other state — and this is important — you’re not betting on a legal app. That’s one of just several advantages that offshore books have that legal books don’t have to contend with. Offshore books:
- Operate in just about any state they choose to serve. Legal sportsbooks must operate only in the states in which they are authorized.
- The regulatory regime for offshore sportsbooks is basically non-existent, while legal books have to deal with more strict regulation, and different regulations in every state. This takes money and manpower to deal with.
- Offshore sportsbooks don’t have to pay the same kinds of fees and taxes that regulated books do, especially a .25 percent tax on all wagers that the US government levies.
MyBookie going away doesn’t solve much for legal sports betting
Portnoy’s rant against an illegal bookmaker is certainly welcome news for proponents of legal betting. But let’s not make it out to be more than it is, which is a pissing match between a media outlet that thrives on such things and exactly one (1) illegal sportsbook.
It does shine a light on something that doesn’t get much play in the US — the fact that a sportsbook is taking wagers illegally. Far too often I see media outlets citing offshore books for quotes or odds, with no mention of their status in the US.
But Portnoy wasn’t ranting against ALL illegal sports betting. Portnoy got mad at one of them on Twitter, and he is trying to shut them down.
That’s great. But if MyBookie gets shut down, all of that action just moves to another offshore sportsbook. Nothing is really solved.
There are plenty of believers and supporters of the offshore books, and I don’t take any issue with people who have no other options for legal betting.
But in order to have a legal sports betting market truly succeed, you can’t just let these sportsbooks exist in the status quo. Normalizing them alongside the legal bookmakers just reinforces their inherent advantages, as they ride the wave of popularity and increased search traffic around sports betting.
So it starts with MyBookie. But it doesn’t end there.
If you bet on Alabama to win the national championship at FanDuel Sportsbook: Congrats, you’re already a winner.
FanDuel Sportsbook pays for the Crimson Tide
FanDuel announced that it was paying out any futures bet that it’s taken on the Crimson Tide to win the national title. If you’re keeping track, that’s before Alabama even plays in the SEC Championship game or has officially reached the College Football Playoffs.
“Alabama’s historic and seemingly inevitable march to Levi’s Stadium deserved a history-making gesture to our customers,” said Mike Raffensperger, CMO of FanDuel Group. “While the college football season has not had too many surprises, we wanted to surprise our customers today, thank them for their loyalty, and prove there are More Ways to Win on FanDuel.”
More from FanDuel in its announcement:
Any single futures bets on Alabama were paid out to customers today. When taking into account Alabama championship futures that are involved in parlays, the early payout could be nearly $400k. Retail customers with a physical bet slip dated prior to November 30th can redeem it for the full amount starting this afternoon at any FanDuel Sportsbook location.
Any future wagers placed on Alabama after 5 PM ET on November 30th do not qualify for an early payout.The early payouts apply to anybody holding a physical ticked on a bet placed at the Meadowlands or on its online sportsbook. In fact, FanDuel indicated that it already credited bettors accounts on the mobile app.
Christmas comes early for FanDuel bettors
Alabama is the odds-on favorite to win the national championship — they are currently listed at -280 if you wanted to bet on them today. And as such, FanDuel likely would have ended up paying out all these bets anyway.
But there is some risk in it, if Alabama doesn’t win, they’ll be paying out two futures bets. Of course, Alabama will be a fairly large favorite in all of its remaining games.
That includes the SEC title game against Georgia, where Alabama is a 13-point favorite at FanDuel.
While American sports bettors might be new to this kind of promotion, it’s a common move to generate some press across the pond.
“FanDuel is a customer first company and innovations like an early payout of a major sporting event is a great example of what can be done in a legal and regulated sports betting market to benefit the consumer,” Raffensperger said. “Even if Alabama loses its next game or doesn’t win the national title, this was something that we wanted to do to celebrate our customers and show why we are the most innovative and fun sportsbook in the United States.”
But wait, there’s more
FanDuel commonly does odds boosts — enhanced odds on certain outcomes — for its users. It added one for FanDuel along with the futures bet payouts:
You can bet Alabama to cover the spread against Georgia at +150 odds instead of the normal -110, with a max bet of $25.
There’s also odds for a potential national title matchup against Clemson; Alabama is installed as an eight-point favorite in that hypothetical matchup. Bets will be voided if those teams don’t meet for the championship.
Nevada Senate Bill 46 was introduced in the state legislature on Wednesday that would require “the Nevada Gaming Commission to provide by regulation for the operation and registration of tout services and persons associated therewith.”
With the legalization of sports betting in states outside of Nevada, it’s certainly causing a growth spurt in the touting industry. More interest in sports betting means more people trying to make money from selling picks or giving advice about sports gambling.
Touting around sports wagering has long been considered a problematic part of the industry. Many of the people who offer their picks for money 1. are not terribly transparent about their overall accuracy 2. not winning bettors.
Regulating sports betting touts
The legislation makes a number of changes to existing gaming law. But in the 16-page bill, and indeed at the very top of it, is a section that would require touts to register with the state.
The bill does not get too much into details, but the intent — to provide some level of accountability in touting — is clear.
Here is some of what the bill would do:
- It would require registration with state gaming regulators if they own or operate a tout service, or if they have “a significant involvement” with one.
- Touts “may” have to be found “suitable to be associated with licensed gaming, including race book or sports pool operations.”
- Fees for registration would be determined by the Nevada Gaming Commission, which is given authority to take other steps to flesh out regulation of tout services.
The bill would have to pass by a two-thirds majority vote — and be signed by the governor — to become law.
So what’s the bill actually do?
Given the lack of details, there’s a question of what the bill would accomplish in reality.
It would seem like the bill could simply serve to give legitimacy to touts by requiring them to register with the state and pay fees to do what they do. There are no minimum standards of what — if anything — they would have to adhere to keep the registration, or if it would actually help create transparency for those who sell their picks.
It also seems to be problematic to enforce beyond the services that actually exist in Nevada. There are plenty of people just selling generic “sports betting picks” that have nothing to with the Nevada sports betting industry directly and exist outside of the state. They could be touting sports betting picks for people who bet at offshore sportsbooks, land-based bookies around the country or in states with a legal wagering industry, like New Jersey, Mississippi and others.
Transparency in sports betting prediction?
People are paying for sports betting picks and advice, and have for a long time. They do it in the hopes of getting an edge wherever they are betting.
Certainly, creating accountability in that sector would be good for the future of sports betting, because people selling crappy picks for money is a blight on the whole ecosystem.
But is it really a state’s role to get involved in people who tout? It’s a potential slippery slope for dealing with anyone in the advice-giving/prediction-making business. (The difference here is this involves gaming, which is obviously a highly regulated industry to start with.)
Anyway, creating some kind of accountability for sports betting touts is an admirable goal. But it’s not 100 percent clear that this bill would truly change anything on that front.
The last we heard, Major League Baseball said it would not be taking advertising money from sports betting companies.
DraftKings, however, is still advertising via MLB teams. To wit:
— DraftKings (@DraftKings) August 13, 2018
There seems to be a disconnect somewhere. So what’s going on?
The backstory on MLB and DraftKings
The last we heard from MLB, back in June, there is no sports betting advertising whatsoever allowed:
“We have been informed that club television and radio rights holders are being approached by sports books to place advertising/enhancements. Pursuant to MLB policy, clubs must inform their rights holders that they are presently not permitted to accept such advertising. Clubs may not at this time enter into any relationship with a pure sports book, or with a casino with a sports book to the extent that the arrangement involves sports betting.”
DraftKings is still very much in the daily fantasy sports business. But it also is fully in the sports betting industry after its NJ sports betting launch last week. If MLB has changed its policy, it hasn’t been publicly voiced.
The intersting thing is that the ad above — seen at the Cincinnati Reds’ Great American Ballpark — doesn’t even mention DFS. It’s just promoting DraftKings’ brand, which now, of course, includes sports gambling.
MLB probably doing a lot of parsing right now
While DraftKings is only in one US sports betting market, that’s likely to change soon. Its sportsbook won’t be in Ohio any time in the near future, but it does have a deal to offer New York sports betting. And it likely will attempt to find its way into neighboring Pennsylvania and West Virginia, which both have legalized sports wagering.
That means that MLB is probably going through all sorts of mental gymnastics to justify a continued marketing relationship with DraftKings. From MLB’s June statement, you can argue DraftKings is not a “pure sportsbook” — it offers DFS too — or “a casino with a sports book.”
Still, that line is pretty difficult to parse, espectially when you don’t even put “daily fantasy sports” on an ad.
Anyway, Major League Baseball — the same league that fought to pay minor leaguers less than minimum wage — is still awful on many levels. And its arbitrary line in the sand on what kind of advertising from sports betting companies is OK is just another example.
The Washington Nationals’ Bryce Harper murdered a bunch of baseballs in the Home Run Derby on Monday night as part of the festivities at the All-Star Game.
One little hiccup though: Harper and the pitcher throwing him batting practice — his Dad — apparently weren’t following the rules.
I’m not here to breathlessly defend the rules of an event that’s just supposed to be a lot of fun. But it does have implications for the world of sports betting.
Yes, there are rules for the HR Derby
This might shock some of you, but there are actually rules for the derby. I mean, we all know the basic ones, like you have to hit out of the park, time limits, etc.
One of the less known ones, though, is that a ball has to hit the ground before another pitch can be thrown to the contestant. It makes some sense, and clearly if not everyone is following that rule, someone gets an advantage. Enter Bryce Harper, whose dad started throwing pitches pretty quickly near the end of the final round:
Again: Who cares if the rules are bent? It’s just the Home Run Derby, not something important like electing a president or regulations on polluting the water.
The only part you and I should care about it is when sports betting becomes involved.
Betting on the HR Derby
The Home Run Derby is fun to watch. But you know what makes it more fun to watch? Betting on it. The game was booked in Nevada and at least some places — including at the FanDuel Sportsbook — in the New Jersey sports betting market.
Some people obviously bet on the Chicago Cubs’ Kyle Schwarber, the other finals participant to win the event, and seeing Harper win it with a loose interpretation of the rules didn’t go over well in some portions of sports (and sports betting) Twitter:
When you bet on Schwarber to win the HR Derby and you just watch Harpers dad throwing baseballs like this while you’re supposed to wait for the balls to land. pic.twitter.com/aYiJIHrNn1
— Brad Pinkston (@Bpinkston27) July 17, 2018
That is correct and everyone who bet on Schwarber should feel cheated. Where was the integrity in that contest? A hot topic on @VSiNLive tomorrow morning.
— Matt Youmans (@mattyoumans247) July 17, 2018
So the Derby is all in fun. I understand that.
Ball has to land before next pitch thrown, right?
Might want to check the tape on Harper’s last SEVERAL pitches.
— Andrew Belleson (@ChicagoCubsPA) July 17, 2018
As some have pointed out, Schwarber also looked like he was breaking a similar rule in an earlier round.
Still, this is where it can get tricky for Major League Baseball.
The potential problem for MLB
It’s well-known MLB wants to be directly involved in sports betting regulation in the US in myriad ways, including integrity fees/royalties and limits on what can be wagered on. Would it want to have betting on the Home Run Derby, or would it even have control over whether that betting can happen? (In all the states that have legalized sports wagering so far, MLB has no say.)
If MLB is involved, and it is setting the rules for the Home Run Derby, then MLB is suddenly in a bad spot. Does MLB take a draconian approach to enforcing the rules for the HR Derby to protect its “integrity?” Or does it carry on like it does today, knowing betting goes on on the event and shrugging its shoulders?
It can do the latter if it’s not directly involved in sports wagering at the state level. But if it is involved, it becomes a lot more difficult for it to ignore the rules for something seemingly as innocuous and fun as the Home Run Derby.
We are apparently close to having a DraftKings Sportsbook app.
Two of the daily fantasy sports company’s founders — Jason Robins and Matt Kalish — tweeted about the planned launch of a sports betting app on Friday evening:
Just testing out this new thingy that’s coming soon pic.twitter.com/EeMvP2yd7c
— Matt Kalish (@mattkalish) July 13, 2018
Wait you mean this thing? pic.twitter.com/hQLnoB7tjQ
— Jason Robins (@JasonDRobins) July 13, 2018
DraftKings is close on sports betting
The teases confirm what many believed — that DraftKings would have separate platforms for its DFS and sports betting offerings. It has been working with Kambi Group on developing its sports betting product.
DraftKings will, in theory, first launch its app in the NJ sports betting market. It has a relationship with Resorts Atlantic City that allows it to offer sports betting via the land-based casino’s license.
We still don’t know anything about the timeline for launch, although no one is offering online wagering yet in New Jersey. Industry chatter says some online and mobile offerings could be live as soon as later this month.
DraftKings is apparently confident about its ability to deliver a product. The news also comes as the company is seeking to raise $200 million.
More sports betting is coming to NJ
There are currently three physical sportsbooks that are already open — Monmouth Park, Borgata and Ocean Resort Casino.
Major League Baseball and the NBA sometimes have to twist themselves into knots to explain what they want from legal US sports betting, and why they want it.
But the MLB has done a pretty big flip-flop in recent years on the need to cooperate with sports betting regulators when it comes to sharing information.
What the MLB said recently
MLB’s most recent plan of attack is to say Nevada sports betting regulation is really, really bad, a take so horrible that it has no basis in reality. Nevada has been doing this for decades, and there’s little evidence that state officials have done anything other than a superb job overseeing the industry.
But that’s not the subject of this story. We’re more concerned here with what the MLB said about “cooperation.” Here’s MLB executive Brian Seeley, in talking to Reuters:
Australia is a world benchmark for the industry, he said, because “there is the most cooperation and coordination between sports leagues, the regulator and bookmakers.”
“You can say that you care about integrity too,” Seeley said of bookmakers. “But when you turn around and oppose any requirement that you let the leagues know about integrity problems, it is hard for me to believe you.”
If you’re following along, MLB is saying YOU ABSOLUTELY HAVE TO WORK WITH THEM if you care at all about sports, betting, starving children around the world, endangered animals, etc. OK, maybe not those last two. But the point remains, MLB is painting a doomsday scenario if you don’t listen to them.
Got that? OK, hold on.
Let’s rewind a bit, to see what the MLB was telling us less than six years ago about sports betting.
Here’s Tom Ostertag, former MLB general counsel, in a deposition he gave for the first iteration of the federal sports betting case, NCAA vs. Christie, in 2012. (The state of New Jersey won the second and more-recent version of the case in the US Supreme Court.)
“We think the idea that any sportsbook can be helpful to us, again, is completely incorrect. It’s almost like saying we’ll create a problem and then we’ll tell you about it. And how does that benefit us?”
We’re not sure what we’re supposed to take away from this, as Seeley’s recent comments are a 180-degree change from Ostertag’s. Was the MLB admitting it was entirely wrong then, and it’s seen the light? Is cooperation not that important, and the MLB is just pretending it is now?
Likely, it’s the former, as the leagues have evolved their stances a lot in recent years. But still going from “LOL at cooperation with sportsbooks” to “integrity can’t happen without cooperation” is like putting a car in reverse while going 100 miles per hour.
Have fun squaring this latest bit of hypocrisy, MLB.
Let’s start here: Sen. Orrin Hatch — the person who is partially responsible for the debacle that was the federal sports betting ban — should be everyone’s last choice for advancing a bill responsible for regulation of wagering in the United States.
Hatch doubled down with what was a pretty awful op-ed about his plans for regulation and the history of sports betting. So let’s get to the biggest whoppers Hatch wrote.
No. 1: ‘The indisputable success of PASPA…’
“The indisputable success of PASPA makes the Supreme Court’s decision to invalidate this law all the more devastating,” Hatch wrote.
What in the bleeping world is Hatch talking about? PASPA, enacted in 1992, was a disaster in just about any measure:
- The law was on the books for decades despite the fact it was unconstitutional.
- It helped create a thriving black market for sports betting that is estimated to be in the tens of billions of dollars. Nevada sports betting has existed with few problems during that time.
- US leagues seem to unanimously agree that regulation is better than trying to institute a blanket ban; Congress could still do that, if it wanted to, just not in the way it wrote PASPA. So, if PASPA was so great, Hatch should just be rewriting it. But, guess what? It sucked.
Anyway, this stupid sentence is pretty much enough to discount anything Hatch ever says about sports betting until the end of time.
No. 2 The Supreme Court hurt ‘the integrity of athletics’
More from Hatch:
By striking down PASPA, the Supreme Court has effectively laid the groundwork for the legalization of sports betting across all 50 states, upending decades of established law that has long protected the integrity of athletics.
Again, if anything the nation’s highest court did the opposite. PASPA is a “ban” that looked great on paper but does almost nothing to stop illegal wagering of any type. Now, states (or the federal government) have a chance to effectively regulate something that was incredibly widespread.
Get out of here with this take, Orrin.
No. 3: Sports betting is an ‘an existential threat to the games we know and love’
Betting has been going on US sports via both regulated and illegal means for more than a century. The leagues have existed, and will continue to exist, no matter what happens with sports gambling.
Not mentioned in Hatch’s list of really old sports betting scandals — none of which have anything to do with a regulated sports betting market — was the NBA/Tim Donaghy mess. The NBA seems to be doing just fine a decade after that.
To claim that something changed in the past week is to ignore reality. There’s plenty of wagering already taking place on the major pro sports leagues and college sports, and we haven’t reached the end of times, like Hatch would like us to believe.
Anyway, this kind of hyperbole is all over the place since PASPA was struck down. It’s just more concerning from the person who also thinks PASPA was a great success. And from the person who is apparently going to try to craft our nation’s sports betting policy.
Twitter is a great place for hot takes of all sorts, and that is just as true in the world of US sports betting regulation as anything else.
One common topic of debate: How many states are going to legalize sports wagering? Could we see as many as six in 2018? One lobbyist seems to think so.
Six states for sports betting?
This take came from a lobbyist for Orrick, Herrington & Sutcliffe:
We passed a single bill (Kansas) during our first year of lobbying for fantasy sports bills in 2015. I’m willing to bet that 6 states pass sports betting bills in 2018, which is the first legislative year for this issue.
— Jeremy Kudon (@JKudon) May 3, 2018
Six states seems aggressive, given that we’ve only seen one state — West Virginia — pass a law so far this year. But Kudon is no garden-variety lobbyist. He’s helped get laws passed in nearly 20 states in recent years as it relates to daily fantasy sports.
And Orrick is a part of the lobbying effort for sports betting on behalf of the NBA and Major League Baseball. So if he speaks, we listen.
How likely is 6?
If I am handicapping it, I am still betting the under on six, despite the weight that Kudon’s Twitter characters carry. Some of the states that seemed to have a good chance of passing something have run into speed bumps.
You can take a look at the legislative calendar so far for states that have at least broached the subject of sports betting. If we count WV and New Jersey — where a new bill popped — two states in 2018 seems like a no-brainer.
Several states seem like they will continue to consider the issue into the summer, including possibly Michigan and Illinois. But forecasting more than a handful of states with new laws seems difficult to do with the information we have right now.
All of this, of course, assumes New Jersey wins the Supreme Court sports betting case, in which a decision is pending. Some states appear to be waiting for a decision to come before they really start the discussion. And if that decision doesn’t come until the end of June, it shortens the calendar even more for legislatures trying to act.
And so we wait for sports betting…
The next time a decision could come from the Supreme Court is May 14.
The good news is time is getting short. In less than two months, we’ll definitely know the answer one way or another. And until then, we’ll keep guessing at what the court will rule and which states will legalize it.
Despite what you might have read, the NBA and Major League Baseball are not actually proponents of legal sports betting in the United States. In fact, they are only in favor of it when it can benefit them directly.
If they actually were champions of sports gambling, we’d have seen a far different story arc for sports gambling here. And we would see them advocating for far different things in legislation as it is introduced in state legislatures around the country.
As the leagues further vocalize what they want, it’s becoming increasingly difficult to view the leagues as rational actors worth paying attention to in the sports betting debate as we await a decision in the US Supreme Court sports betting case.
The leagues started lobbying only when they had to
The NBA has been hailed as a progressive force of change for US sports betting for years, even as it sat idly by to do nothing other than say it should be legal and regulated in the United States.
To wit, the NBA said it would not lobby Congress — let alone states — as recently as a year ago before an abrupt pivot to say that it would. As soon as 2018 rolled around, we learned the two leagues were putting on a full-court press in as many as a dozen states.
Why the sudden change? It coincided with the Supreme Court’s decision to take the New Jersey sports betting case, in which the NBA, MLB and other sports leagues were litigants. And then in December, oral arguments went poorly for the leagues, most analysts agree.
That means the sudden change from a laissez-faire attitude is not borne out of a real change of heart on sports betting, it came from necessity. The leagues had sensed they lost control of both the “when” and “how” for sports betting. And suddenly they started telling everyone how it should be done.
To make it clear that the leagues don’t really support regulated sports betting unless their list of demands is met, they continue to oppose a law in West Virginia that went on the books this spring.
The bottom line: the NBA and MLB could have been working on creating a legal and regulated environment for sports betting years ago, and those attempts would seem a lot less disingenuous than they do now.
The leagues are asking for a cut…of NJ sports betting
This amazing story surfaced last week.
Even as the leagues fight New Jersey in court, the NBA and MLB are lobbying government officials in the state to give them a cut of all wagers along with other things they are asking for in other states.
It’s crazy that they are brazen enough to have stymied sports betting in NJ for years and then turn around and ask for a cut when it turns out they might lose the case. The next thing you know, the same leagues will be going to Nevada — a place where legal wagering has existed for decades — and make the same demands.
Here’s what’s happened in the six years that NJ sports betting has been hung up in two different court cases:
- A number of Atlantic City casinos have closed.
- AC went through a state takeover because of its struggling finances.
- The state has paid $8 million in legal fees.
And now the leagues want money from New Jersey gaming interests? Come on.
The leagues are not really offering anything of value
The leagues are asking for a lot of money and control when it comes to sports wagering. But they’re not giving back anything in return, as least not legislatively.
They’re offering to be a part of the process for monitoring and ensuring integrity of the underlying games, but that’s something they’re going to do anyway.
The leagues continue to argue that “we exist, therefore pay us to bet on our games.” That’s an awful argument, and it really doesn’t work like that almost anywhere in the world.
The leagues, at the core, want to be paid for their intellectual property, and they don’t want any strings attached to it. If they would start offering something of value to states and prospective sports betting operators, that might be a different story.
But for now, the leagues are putting their hands out and giving nothing in return. That’s a stance that’s difficult to take seriously if you’re a government official or gaming company.