SharpRank’s weekly updates on Compliance, Audit, Legislation, Ethics, & Regulation within the Sports Betting Industry.
Topics 11/13/24:
- French Investor’s Massive Bet on U.S. Election Sparks Regulatory Review
- DraftKings Eyes Election Betting and New Market Opportunities
- Bovada Shuts Down Tennessee Operations Amid Regulatory Crackdown
- Missouri Legalizes Sports Betting
- Canada Moves Toward National Sports Betting Ad Regulation
- Massachusetts Greenlights Betting on Tyson-Paul Fight After Safety Review
French Investor’s Massive Bet on U.S. Election Sparks Regulatory Review
In the 2024 U.S. presidential election, global interest in political betting surged, with a French trader known as “Thèo” betting millions on Trump’s win through Polymarket, a crypto-based prediction market. Despite turning a significant profit, Thèo’s activity has caught the attention of France’s gambling regulator, ANJ, which is considering banning the unlicensed platform in France. France has strict gambling regulations to ensure compliance, unlike the U.S., where Polymarket has been prohibited since 2022 due to regulatory issues with the Commodity Futures Trading Commission (CFTC). However, U.S.-based Kalshi received recent approval to operate prediction markets, making this election the first in years with legal U.S.-based betting options, which, along with Betfair, contributed to a substantial global betting handle.
DraftKings Eyes Election Betting and New Market Opportunities
DraftKings CEO Jason Robins revealed the company’s interest in expanding into election betting, a form of “trading event contracts” that differs from traditional sports betting and is regulated by the Commodity Futures Trading Commission rather than state gaming bodies. Inspired by platforms like Kalshi and ForecastEx, which saw high trading volumes in the recent election, Robins noted the potential of this market, particularly for presidential elections. Though election betting has faced regulatory challenges, a U.S. appeals court recently allowed trading on presidential election outcomes. Additionally, Robins shared that DraftKings aims to enter states where sports betting may soon be legalized, including Minnesota, Texas, and Georgia, and expressed enthusiasm about potential partnerships in Florida, where the Seminole Tribe holds sports betting exclusivity but has shown interest in working with outside brands.
Bovada Shuts Down Tennessee Operations Amid Regulatory Crackdown
Bovada, an offshore sportsbook, has exited Tennessee’s sports betting market following a cease-and-desist order from the Tennessee Sports Wagering Council (TSWC) and a $50,000 fine. Tennessee joins a growing list of 16 states where Bovada is now restricted, including Massachusetts and Michigan, which also recently enforced similar measures. The TSWC emphasized that legal sportsbooks provide essential consumer protections absent in the illegal market and is working with law enforcement to eliminate unlicensed operators. The American Gaming Association estimates that Americans wager nearly $64 million annually with illegal sportsbooks and has called for federal assistance to tackle the issue.
Missouri Legalizes Sports Betting
Missouri voters narrowly passed Amendment 2, legalizing sports betting in the state, with a close margin of 50.1% to 49.9%. This victory was driven largely by support from Missouri’s professional sports teams and major mobile sports betting operators like FanDuel and DraftKings. The amendment allows professional teams such as the Kansas City Chiefs and St. Louis Cardinals to offer sports betting and permits casino operators to apply for licenses. The state will tax sports betting at 10%, with the revenue directed primarily toward public education and gambling addiction prevention. The measure is set to go into effect 30 days after the vote, and Missouri must implement sports betting by December 1, 2025. Despite concerns over whether the expected revenue will significantly benefit education, supporters argued that Missouri had lost millions in potential tax revenue by not legalizing sports betting sooner, especially with neighboring states like Kansas and Illinois already offering it.
Canada Moves Toward National Sports Betting Ad Regulation
Bill S-269, which aims to establish a national framework for sports betting advertising in Canada, has passed the Senate and is now moving to the House of Commons. The bill, introduced by Sen. Marty Deacon, seeks to address the excessive sports betting ads that emerged in Ontario following the launch of commercial sportsbooks in 2022. While the bill does not propose a complete ban on gambling advertisements, it would require the Minister of Canadian Heritage to develop guidelines to regulate the industry’s advertising practices, potentially limiting the number and scope of ads and restricting the use of celebrities and athletes. The bill also aims to promote research on the impact of advertising on minors and support responsible gambling standards. Advertising has already started to decline, with research showing a significant drop in gambling-related ads in 2023. Strong advertising regulations are already in place in Ontario, where operators have been fined for violations, and Alberta is expected to follow a similar framework when it opens its commercial market in 2025.
Massachusetts Greenlights Betting on Tyson-Paul Fight After Safety Review
The Massachusetts Gaming Commission (MGA) has approved betting on the highly anticipated $100 million boxing match between Mike Tyson and Jake Paul, set for November 15. The fight, which will be streamed by Netflix, raised concerns among regulators due to its unusual nature and the significant age gap between the fighters—58-year-old Tyson and 27-year-old Paul. After consulting with other state regulators, the MGA decided to sanction betting, concluding that banning it could drive bettors to illegal markets. Despite concerns over potential corruption, integrity monitoring agencies determined that the fight’s high profile made it unlikely to be affected by betting-related issues. The event will feature rule changes for safety, including the use of 14-ounce gloves and shorter rounds. At BetMGM, Jake Paul is the -250 favorite to win.
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