SharpRank’s weekly updates on Compliance, Audit, Legislation, Ethics, & Regulation within the Sports Betting Industry.
Topics 8/21/24:
- NFL Considers Private Equity Investment in Teams
- Notre Dame Suspends Men’s Swimming Program Over Gambling Violations
- AGA Urges Crackdown on Sweepstakes Gambling Evasion
- DraftKings Scraps Tax Surcharge Amid Backlash, Stock Rises
- MGM Partners with Grupo Globo to Launch BetMGM in Brazil
NFL Considers Private Equity Investment in Teams
The NFL plans to meet on August 27 in Minneapolis to discuss and potentially vote on allowing institutional investors to buy stakes in teams. Following meetings with private equity firms, league executives and owners feel confident in presenting a framework for approval. A committee, including key owners like Clark Hunt and Robert Kraft, has been exploring this idea since last year. The proposal may limit institutional ownership to 5-10% per team, with a select group of vetted firms given priority. If approved, the NFL would join other major leagues like the NBA in allowing private equity investments.
Keep an eye out for our blog post later this week that will dive more deeply into this and provide some additional background on the initiative…
Notre Dame Suspends Men’s Swimming Program Over Gambling Violations
Notre Dame has suspended its men’s swimming program for at least one year after an external review found widespread NCAA rule violations involving athletes betting on their own performances and engaging in disrespectful behavior. The investigation, conducted by a law firm, revealed that over 60% of returning team members participated in a makeshift internal sportsbook, where they wagered on each other’s results at meets. The review also uncovered a team group chat containing derogatory remarks, although no physical hazing or abuse was found. The coaching staff was not aware of the gambling or other misconduct due to deliberate efforts by team members to hide these activities. While no coaches were dismissed, the program’s culture is being restructured to prioritize respect and integrity. The NCAA is collaborating with Notre Dame as it handles eligibility issues for athletes involved in gambling.
AGA Urges Crackdown on Sweepstakes Gambling Evasion
The American Gaming Association (AGA) is increasing efforts to combat the rise of sweepstakes-based gambling models, which it argues circumvent US sports betting regulations and pose risks to consumers. A new AGA memo urges state regulators and attorneys general to investigate platforms using these models to avoid licensing and regulatory scrutiny. Unlike legal sportsbooks and casinos, sweepstakes operators allow users to exchange virtual currency for real money without proper oversight, responsible gaming protocols, or fair-play assurances. This crackdown follows recent regulatory actions against offshore sportsbooks like Bovada and emphasizes protecting regulated gambling markets.
DraftKings Scraps Tax Surcharge Amid Backlash, Stock Rises
DraftKings has decided to abandon its plan to implement a “gaming tax surcharge” on winning bets in high-tax states like New York and Illinois after encountering significant customer backlash. This surcharge, intended to deduct a percentage from winnings in these states, was scrapped due to negative feedback and the fact that other major sportsbooks, including FanDuel’s parent company, Flutter Entertainment, had no intention of introducing similar fees. Flutter highlighted the need to balance tax rates with customer experience to drive market growth. The reversal has been well-received by bettors, leading to a notable increase in DraftKings’ stock value.
MGM Partners with Grupo Globo to Launch BetMGM in Brazil
MGM Resorts has partnered with Latin America’s largest media conglomerate, Grupo Globo, to launch BetMGM in Brazil’s expanding licensed betting market. The joint venture, set to begin in 2025 pending license approval, will use LeoVegas’ technology and leverage Grupo Globo’s extensive media reach to establish a strong presence in Brazil. The venture will be headquartered in São Paulo and aims to capture a significant share of the market by combining Grupo Globo’s broad consumer network with MGM’s global gaming expertise. This move follows MGM’s acquisition of Tipico US’ betting technology, which will support BetMGM’s operations and user experience in Brazil.
