2024 Gambling Year in Review, Part 2

For over a decade i have been breaking down the year in gambling that was with my Top 10 gambling stories in North America, both the United States and Canada. I posted stories 6-10 yesterday and today reveal the Top 5 gambling stories in North America. 

5. Florida compact issue finally gets settled

In 2021 Florida governor Ron DeSantis entered into a compact with the Seminole Tribe giving them the exclusive right to offer sports betting throughout Florida and the right to offer Class III gambling on their reserve. The sports betting would be conducted via servers on Seminole lands, but bets could be placed using the Hard Rock app at Seminole casinos, at pari-mutuel locations that the Seminoles signed agreements with or at home. Almost immediately, West Flagler and Associates, a group which owns several entertainment facilities as well as jai alai frontons and Bonita Springs Poker Room, along with Magic City Casino which operated greyhound racing filed a lawsuit with the Florida Supreme Court saying the compact should be disallowed since the gambling isn’t taking place exclusively on Indian land as is required by the IGRA. The federal government including Joe Biden and Secretary of the Interior Deb Haaland asked the courts to approve the compact because in their view the state has the right to set the terms for gambling compacts.

The Seminoles launched the Hard Rock App in 2021 for a brief period but shut it down when a district court indicated that they believed the compact was illegal. The issue went on for almost two years and got appealed all the way up the court ladder until 2023 when SCOTUS blocked the petition to disallow the compact although Justice Brett Kavanaugh issued a dissenting opinion saying that he wasn’t sure the compact wasn’t in violation of the IGRA, setting up another opportunity for appeal.

The Seminoles relaunched the Hard Rock app at the end of 2023 and West Flagler and Magic City finally gave up in October and said they would stop appealing the compact in turn for an agreement by the Seminoles to partner with them and add jai alai to the sports betting app. There is also talk that the Seminoles are willing to work with DraftKings and/or FanDuel to allow them to get some revenue from Florida betting.

The compact is for 30 years and guaranteeing $2.5 billion for the first 5 years and $20 billion over the life of the compact and also allows the Seminoles to add 3 new casinos in Broward County.

4. Betting scandals by Shohei Ohtani and Jontay Porter

One of the main concerns that sports leagues have always stated for their opposition to regulated sports gambling in America was the concern about game fixing. Game fixing scandals have rocked all sports in North America from the time of the Chicago Black Sox scandal in 1919 to the game fixing by referee Tim Donaghy in 2007 and there were many more not reported. Moreover, most of the betting scandals have involved betting on non-American sports such as horse racing in the UK, tennis tournaments in Europe, UK soccer and non-North American sports like Cricket and Rugby. Realizing they couldn’t stop it most leagues now work with sportsbooks to help identify possible cheating incidents set out in memoranda of understanding.

Most of the scandals were with minor athletes so they didn’t make the news with the most famous recent one being a minor tennis tournament in Poland when Nikolai Davydenko withdrew for no apparent reason while bets kept pouring in on his opponent on Betfair who decided to simply void all wagers while the ATP found no proof of wrongdoing. But what if the betting scandal involved a major athlete? 2024 saw that happen. The world was rocked by an accusation that Shohei Ohtani, MLBs best player and league darling may have bet on baseball. Before spring training. It was reported that Ohtani’s interpreter, Ippei Mizuhara, stole millions of dollars from Ohtani to pay gambling debts and not surprising speculation swirled that Ohtani may have had the gambling problem and he was prepared to throw his interpreter under the bus to avoid facing the music. After months of investigation by both the U.S. government and MLB, it was determined that Ohtani was completely innocent and was simply a victim. However, the league did everything in its power to exonerate Ohtani even before they knew the results of the investigation and several respected sports publications surmised that Ohtani was too important to lose and if he was found to be gambling on baseball they would have done everything to sweep it under the rug. Several analysts even called MLB hypocrites because while they were quick to suspend Pete Rose and put a lifetime ban on him including an introduction to the Hall of Fame, it was clear that baseball was not going to do anything that could ruin the career or its biggest asset. Ohtani’s interpreter eventually pled guilty to bank fraud claiming he had access to Ohtani’s bank account and transferred money to himself to pay the gambling debts. As soon as Ohtani was cleared nobody connected to baseball brought it up again.

As bad as Ohtani’s scandal was, a bigger scandal involved Toronto Raptor Jontay Porter. The betting scandal was discovered when sportsbooks noticed irregular betting on Jontay Porter props. In 2 games there were massive bets on props involving Porter such as points scored and number of three pointers and in the game. In both instances Porter pulled himself after only a few minutes citing an injury resulting in the under bets on Porter props winning. According to the investigation in a game against the Sacramento Kings, Porter told a large bettor about his health and that bettor wagered an $80,000 Same Game Parlay at DraftKings featuring several unders on Porter props which all came in and and netted him $1.1 million. After the investigation, DraftKings refused to pay and alerted the NBA. When doing further investigations the league noted that Porter likely bet on 13 games himself using a beard or an alias account and many of those bets included wagers on the Raptors to lose. Porter eventually pleaded guilty to wire fraud and has yet to be sentenced although most legal experts expect him to serve between 3 years and 5 years. What made the story even more compelling is that the NBA was the first league to push for legal and regulated sports betting although the league contends that the cheating only came out because legal sportsbooks spotted the problem.

Also in 2024, Billy Walters wrote a book that implicated Phil Mickelson saying he tried to wager on the 2012 Ryder Cup even though he was playing in the tournament, an absolute no-no in the sport, but Phil never addressed the claims and the PGA Tour along with LIV Golf seems to have just turned the other way rather than addressing the claims. Phil is known to bet millions on sports but he has always denied betting on golf tournaments he was playing.

3. The skyrocketing profits of sports betting and iGaming while land-based revenues remain stable

When some analysts suggested that iGaming and sports betting in the U.S. would be a $30 billion industry it was met with skepticism. Little did anyone know the figure might be conservative. According to American Gaming Association figures, the country in 2024 is on pace to have a handle of over 130 billion and revenue of around $13.5 billion from sports betting alone, an increase of almost 36% over 2023. The hold is close to 10% which was also unexpected. The seven states that offer internet casino wagering are expected to net an additional $3 billion from internet casinos and poker and traditional casinos are set to make around $50 billion for a grand total of over $66 billion in revenue for the year. Projections say that by the year 2030 the revenue figure will approach $100 billion. The numbers are astounding and have given states a great deal of income for projects like healthcare, sports and education without raising it through taxation. Leading the way are New York, New Jersey, Pennsylvania, Michigan and Illinois, all which offer internet casinos along with sports betting, the exception being New York which only allows sports betting. New York in fact is on pace to net $2.2 billion from sports betting for the year meaning that over 1.1 billion will be going to state coffers as the result of their crazy 51% tax rate. According to many analysts, if New York were to legalize online casino gambling as well as sports, the state would probably have close to $4 billion in total revenue.

There was some concern that online wagering would cannibalize land-based gaming but that doesn’t seem to be the case. Land-based betting has stayed fairly stable and revenues for the first 10 months across the country were actually 7% higher than the same period of 2023. So if anything, the addition of sports betting and iGaming has helped land-based revenue grow. The only real casualty of online gambling has been Atlantic City which has seen a decline of about an 8% in 2024 compared to the same period of 2023, but 2023 saw a massive increase in revenue for land-based Atlantic City casinos, indicating the decline of 2024 likely had more to do with the economy and people putting off vacations rather than the effect of iGaming in the state. And when totalling everything together casinos in New Jersey have seen an increase thanks to iGaming.

The figures clearly show that Americans are anxious to gamble and the states are benefitting greatly rather than the money going to offshore companies or to underground bookies.

2. Controversy of Polymarket and election betting

Betting on elections was always illegal in the United States until October of 2024 when a district court ruled for prediction site Kalshi that gambling on U.S. elections should be legal, just like sports bets. After that ruling Kalshi, RobinHood and other prediction sites started offering odds, but mainstream sportsbooks like FanDuel and BetMGM did not take bets from U.S. customers on elections since they believed there was almost certain to be an appeal of the court ruling by the Commodity Futures Trading Commission, which regulates financial contracts that bet on events. Polymarket, a crytpo based P2P market based in Manhattan had been taking bets on the elections for some time was not allowed to take bets after the ruling due to an agreement it made with the government in 2022 where it paid a $1.4 million fine to the CFTC and agreed to stop accepting U.S. election wagers from American bettors. 
Nevertheless, the site continued to offer wagering to non-American customers and its odds never wavered from making Trump a big favorite to win the election even when most other polls showed Harris ahead. On the day before the election Polymarket gave Trump a 66% chance of winning where polls indicated it was closer to 50-50 or Harris even slightly ahead. 

This huge difference in prediction figures became quite controversial because prominent Republicans and Trump supporters like Elon Musk and Steve Bannon kept insisting the polls were wrong and pointed to Polymarket’s odds as proof, saying that as a betting site their numbers were more accurate and reliable than polls. And when the results came in for both the national and state betting with percentages almost exactly as predicted on the site there was concern the company may have influenced voters to either sit out or vote for Trump thereby affecting the results. While the site maintained it was off limits to U.S. citizens after the 2022 settlement, Shayne Coplan, the founder of Polymarket, had his home raided by the FBI after the 2024 election on claims they were taking U.S. bets from people either by not using proper geolocating or by customers using a VPN. Republicans maintained that the raid was ordered by the Biden camp as an attempt to get retribution on the company, saying that the publishing of their predictions possibly could have affected the voting.

This raises the questions as to how much influence the government should have relating to betting sites and also whether election betting should be allowed. Outside the U.S. election betting, even for countries where citizens can bet on their own country’s results like the UK, Ireland, Australia, Canada etc. are quite popular and there has never really bee any concerns raised that it may have affected voting. So Polymarket and other betting companies believe that this concern is unfounded.

And the top gambling story in North America for 2023 . . .

1. The exodus of small sportsbooks from the United States

With the domination of larger sportsbooks like DraftKings, FanDuel and BetMGM, it only seemed a matter of time that other books would realize that they simply can’t compete in a market where over 75% of the market is controlled by 4 companies and every sportsbook is required to pay between 20 and 51% of their profits to the state. The first exodus began in 2023 with Kindred Group pulling Unibet from all states as well as Ontario and that was followed by Wynn withdrawing from all states except New York. Later in 2023 Pointsbet sold its U.S. operations to Fanatics and FoxBet simply closed operations realizing there was no path to profitability. In 2024 the exodus was more pronounced. In June Tipico sold its operations to BetMGM, and in July Betway left all of North America. In the same month Superbook closed operations in every state except Nevada where they will continue to offer iGaming as part of the Westgate casino, and most recently BetFred, which has a worldwide market cap as large as any major sportsbook, closed operations in Colorado, Louisiana, Maryland, Ohio, Virginia, Arizona, Washington and Iowa leaving it only operational as a land-based option in Nevada and an iGaming offering in Pennsylvania. BetFred’s president admitted that a full withdrawal from those 2 states is also likely in 2025. Penn National also dropped the Barstool Sports brand and launched as ESPNBet.

That leaves the question about who is next? BetRivers owned by Rush Street has a big following and operates in most states, but they are not profitable and a recent decision by the company to cut out affiliates in Illinois, Colorado, Arizona, Virginia, Ohio, Indiana, Louisiana and Maryland seems to be a clear indication they will be leaving those states in due time.

Bally Bet is another major site that seems to be in trouble. They remain dead last in revenue in New York and other states they operate and the company was so desperate to change things up that in 2023, they stopped betting from all accounts for a brief period and then partnered with Kambi hoping to build the brand. But recent results suggest it hasn’t worked. Most experts I spoke to agree that it’s just a matter of time before BallyBet closes or sells to another operator such as Bet365 who would be quite interested in acquiring a New York license.

Speaking of Bet365, the company opened a large office in Denver where they will be headquartering their product. Despite worse than expected results in the last fiscal year, Bet365 believes the U.S. is its future and with annual revenues in the last year of £3.39bn (about $4.3bn USD) the company has the funds to ride it out.

Clutchbet recently pulled out of several states and seems to be on the way out, and other small site seem to be looking for an exit strategy as well.

The culling of sites in the U.S. was expected and almost all gambling analysts agree that within 5 years you will likely be able to count on one hand all the sportsbooks operating in the United States namely DraftKings, FanDuel, BetCaesars, BetFanatics and ESPNBet. And if Bet365 continues on and is willing to accept losses from U.S. operations, you may need an extra finger on the other hand to count the 6 operators.

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