How the Presidential Election Could Alter Appetite for Legal Betting
On Nov. 5, U.S. voters will elect a new president. Whoever the winner is, there’s likely to be a change in the gambling political landscape in multiple states.
Should Donald Trump become president, there are at least two states – Arkansas and Texas – that could be most affected when it comes to gambling expansions. And if Kamala Harris wins the election, there are another two states in which change could moderately affect the current gambling climate.
Trump could tap Texas Gov. Greg Abbott or Lt. Gov. Dan Patrick for his cabinet. Either one of those appointments is a potential game changer in the second-biggest state in the U.S. And in Arkansas, Gov. Sarah Huckabee Sanders is a former Trump White House press secretary, so it seems possible that she would be on a short list for another appointment.
Harris’ running mate, Tim Walz, is the current governor of Minnesota. Walz has been supportive of an expansion of gambling and that likely wouldn’t change if his lieutenant governor follows him. And in California, should Harris tap Attorney General Rob Bonta for an appointment, he would leave his position without offering an opinion on the legality of fantasy sports in the state.
For a state-by-state look, click here.
Penn Still a ‘Hold’
Following Penn Entertainment’s Investor Day at Las Vegas last week, Jefferies Equity Research wrote that it sees some positives going forward, and kept its target price at $20. The company’s stock closed at $18.74 Oct. 16. Jefferies indicated that Penn’s New York launch of ESPN Bet has tripled the company’s average daily wagering handle and that the average deposit size has doubled. ESPN Bet launched in New York Sept. 27.
Analysts did a poll of ESPN Bet users and found that about 50 percent of ESPN Bet users chose the platform because of their familiarity with ESPN, but that 87 percent of respondents have accounts on other platforms.
Beyond sports betting, Jefferies pointed to increased investment in retail casinos as a positive. The company is relocating two of its Hollywood casinos and making capital investments in two others.
Jefferies adjusted its third-quarter 2024 revenue projection and EBITDAR down to $1.6 billion and $341.2 million from $1.7 billion and $338.4 million, and FY24 projections to $6.6 billion and $1.3 billion from $6.7 billion and $1.3 billion.
Kalshi Ripe with Election Futures
Roughly two weeks after Kalshi was cleared by a federal appeals court to re-list its election-related event futures, the exchange is chock-full of political options, from the presidential election all the way down to state races, according to iGB.
Kalshi was first cleared to resume its election trading Oct. 2. A three-judge panel for the U.S. Court of Appeals for the District of Columbia affirmed a lower court’s ruling that the Commodity Futures Trading Commission (CFTC) overstepped its authority in halting the contracts last year.
The New-York based Kalshi is a derivatives exchange and not a wagering operator. But its primary offering – event futures contracts – are difficult to extricate from gambling, hence the regulatory scrutiny.
On its website, Kalshi calls event contracts “a new type of asset class” that allows for trading on yes/no questions. Interested speculators can purchase contracts tied to event outcomes. The exchange then matches each contract with another from the opposite side. Thus Kalshi is not the “house” and it profits on trading commissions. Nowhere are the words “betting” or “gambling” mentioned.
Yet on Investopedia, authors are quick to mention the discrepancies. Unlike “traditional event contracts” like those tied to commodities, the site lists “speculators/bettors” as the primary traders of event contracts.
Revenue Reports
Operator revenue in New York grew year-over-year in September, though handle fell. Nine operators were live for at least part of the month for the first time since July, as ESPN Bet launched Sept. 27. DraftKings led all operators, capturing $788.3 million in handle. All operators combined to take $1.8 billion in bets.
Arizona operators reported handle and revenue that beat out July 2023, but fell short of the numbers from June 2024. Handle for retail and digital sports betting totaled $410 million in July, the Arizona Department of Gaming announced Oct. 15.
On the same day, the Massachusetts Gaming Commission released its September numbers, which set records for handle and operator revenue. DraftKings accounted for $355.2 million of the $678.7 million in handle for all operators.
In Other News …
Hard Rock bet announced a deal with Kambi’s “Odds Feed+,” a stand-alone odds feed that includes markets around the world. Hard Rock expects new markets to be available before the end of the year, and said that new markets will include pre-game and in-game. Hard Rock Bet is available in eight states.
NFL owners this week approved Tom Brady’s bid to become a minority owner of the Las Vegas Raiders, according to the Associated Press. Brady will take 5 percent ownership. The deal was initially made in May 2023.
DraftKings Oct. 16 announced that it acquired Mustard Golf, which specializes in golf odds. The deal will allow DraftKings to bring pricing on golf markets in-house.
