iGaming Daily

Jessica Welman (00:01.388)
Good morning Baltimore. Charm City shocked the gaming industry last week when its Mayor Brandon Scott had the city file a lawsuit against Draft Kings and FanDuel claiming that the sports betting titans are intentionally preying upon weak people with issues around responsible gambling. Is this a frivolous lawsuit or the first in a slew of government action against the books? We're going to discuss just that on today's episode of iGaming Daily. iGaming Daily is, as always, brought to you by OptiMove, the number one

CRM marketing solution for the iGaming market. I am Jessica Wellman, editor of, managing editor, I keep getting the title wrong, of SBC media. It still hasn't sunk in. Joined by Charlie Horner, media manager for SBC media. Sorry, Innea. Let me do that one more time. Yeah.

joined by Charlie Horner, Media Manager of SBC Media. Hello and welcome, Charlie. We've got a juicy one today.

Charlie Horner (01:03.884)
Yeah, this is an interesting one. It's nice to see that DraftKings lawyers are keeping themselves busy again.

Jessica Welman (01:09.974)
Just throw it on the pile. Yeah, I was really surprised by this. And I was also pretty surprised that there were other people who did not seem to think this was a big deal in our industry. And that was a bit shocking to me because frankly, I've never heard of a local government suing a regulated operator for breaking the law.

Charlie Horner (01:38.222)
No, no, were just talking off air and we can't really think of another instance of this happening and yeah, considering that Maryland is on the up and up, it's a legal regulated market, these are the two biggest regulated operators in that market for the mayor of the biggest city within that state to file suit and to come out with these quite severe claims is...

Jessica Welman (02:06.231)
Yeah.

Charlie Horner (02:08.394)
Yeah, I think it's shocking. I think it's really surprising and yeah, I think this is a massive story.

Jessica Welman (02:14.964)
I do too, and it's fascinating to me too because we emailed Marilyn Lottery on Friday and haven't heard back, but it was pretty late business hours and we're just getting going in the US here on a Monday that I don't know what they'll have to say,

it puts the regulator in a really bad spot because you're implying in this lawsuit that they're not doing a very good job regulating. I guess we should, for those who are unaware, actually explain what the details of the lawsuit are.

Basically, the city of Baltimore, its municipal government, and in turn, the mayor of that municipal government, Brandon Scott, have worked with a private law firm to sue these operators for violating the city's ordinance about consumer protection. They kind of go back to the well that we've seen of a number of customer lawsuits against DraftKings.

There might be a couple against vandal most of them tend to be against great draft Kings You have an unclear bonus offer at sign up you use predatory technology to rope in people who are exhibiting signs of gambling addiction and Offer them more money to keep taking part your VIP program is Irresponsible because people will come to you and say I don't have any money I don't get paid until blah blah blah and your response is not

Here's a number you might want to call but here's more money to pay you to give you for your account as as bonus dollars But yeah, the regular if you're the regulator are I'm trying to think how I would feel about I think probably be mad

Charlie Horner (04:05.454)
Oh yeah, 100 % I think. Yeah, the mayor has kind of gone over their heads and said, yeah, you're not doing a very good job in regulating these operators and we're gonna step in and do your job for you essentially.

Jessica Welman (04:23.328)
Which begs the question, like, did they go to them first?

Let them know that this was coming like I would love to kind of know the behind the scenes of how this developed In a release this is what the mayor had to say about Fandl and DraftKings these companies are engaging in shady Practices and the people of our city are literally paying the price DraftKings and Fandl has specifically targeted our most vulnerable residents including those struggling with gambling disorders and have caused significant harm as a result This lawsuit is a critical step to hold them accountable and protect all

I'm gonna go with Baltimoreans. Never heard that in my life, but I don't know a lot of people from Baltimore to be fair.

Charlie Horner (05:05.401)
think one of the surprising things about this is that Brandon Scott isn't your traditional sort of anti-gambling reformist who wants to fundamentally change the industry or just ban it in general. We're talking about someone who, exactly, we're talking about someone who's been on a bit of a journey since Maryland launched regulated online sports betting. So yeah, I would...

Jessica Welman (05:20.384)
He placed the ceremonial first bet.

Charlie Horner (05:34.956)
really interested in that sort of journey that he's been on and sort of all this evidence that he's gathered and how that perception of his has changed to the point that we're in this lawsuit today.

Jessica Welman (05:48.086)
Well, my question for you also is how much do know about the city of Baltimore?

Charlie Horner (05:54.38)
Yeah, this is the sort of bi-monthly Charlie is not American segment of the...

Jessica Welman (06:00.674)
I know, let's put you on a spot about American things you don't understand. But it is important and I'll explain why. But how much do you know?

Charlie Horner (06:07.178)
Mm-hmm. Yeah, not a lot, to be honest. I know it's in Maryland. I know it's the biggest city by some distance in Maryland. But other than that, yeah, not too much.

Jessica Welman (06:20.096)
So Baltimore is, in the cultural perception, a city that has its fair share of struggles. Like that TV show, The Wire, you hear people talking about all the time, that's about Baltimore and the crime and corruption and things that happen in Baltimore. So it's this perception of a city that is already a struggling people dealing with a lot of crime.

Charlie Horner (06:32.909)
Mm-hmm.

Jessica Welman (06:46.998)
I don't know, to be fair, how current that perception is, but historically, that's how Baltimore is viewed. It's also a city where 60%, I believe, of this city is African American population-wise.

Something I learned from a new book out from Jonathan Cohen called Losing Big. We're going to have him on the pod later this week. I had heard this, but he kind of quantified that sports betting is extremely popular in African American populations. It kind of explains why Jamie Foxx, Kevin Hart, these are people that these operators are getting as spokespeople, the big operators. So.

The perception that they are preying on a population that is already kind of at risk for all sorts of things because it is Baltimore, I think adds a little bit to this story that the international crowd might not necessarily be aware of.

Charlie Horner (07:47.498)
Yeah that's definitely something that I wasn't really aware of and I don't think that many people internationally will pick up on that and it does add another layer to this.

Jessica Welman (07:54.496)
Yeah.

Jessica Welman (07:57.824)
Yeah, so think of like a rundown city that's like economically struggling and.

That's kind of what we're dealing with, especially right now at this particular economic juncture, which is what led Dustin Galker in his newsletter to kind of poo poo this lawsuit. Like, don't you have more important things to do? And I'm just like, I mean, if you read the lawsuit, it sure seems like they firmly believe that these people are being preyed upon. Like, it doesn't seem out of bounds or unfair to me. But I think it's because so much of this story pulls in these main

media reports that we have written about on and off of the past couple of years and lately haven't written, I'll be honest, SBC America hasn't really, SBC America hasn't really written as many kind of write-ups of things the same way we did when the 60 minute story hit and that New York Times series hit but we just had a, I believe it was Washington Post, another Maryland newsletter or newspaper write about VIP programs this week so

Are we paying enough attention to these mainstream media critiques as an industry?

Charlie Horner (09:09.536)
I think a couple of years ago we did. I remember we did a lot of coverage of this sort of stuff. We did the little documentary in New Jersey a couple of years ago. We spent a lot of time on this podcast talking about it. I remember you, Jess, wrote a few op-eds about optics in the industry, and that was off the back of that New York Times series of...

Jessica Welman (09:21.947)
that's right.

Charlie Horner (09:38.838)
so-called exposés. I think it probably has dropped off the agenda in the last 18 months or so. I think there's just been other storylines to tell. this industry moves quickly. And I think the mainstream media moves even quicker. And so things can just fall off the attention. But I would say...

Yeah, we probably could do with paying a bit more attention to this sort of external perception of the industry because when there is coverage of the US sports betting industry, it's usually quite bad publicity. yeah, I think there's a few lessons that we could probably learn from these.

Jessica Welman (10:26.38)
Yeah, I'm gonna, you know what, I'm gonna take a sip of coffee since it's very early on a Monday. We're gonna take a quick break and then I am gonna come back and probably offer a rant. All right, welcome back to iGaming Daily. As Charlie just pointed out, you know, it's almost that there are too many mainstream media stories.

depicting the industry in extremely negative way for us to even keep tabs on it anymore. It's become so commonplace. And I think what's really starting to bite the industry in the rear end is...

that they just kind of dismiss it. these people hate gambling. They are going to hate everything they do. Why don't they do these reports about the black market? It's not fair. And there is never this moment of reflection to say, OK, we see that a major, major outlet like Washington Post is questioning our VIP program. Maybe we should try to.

write a story in which someone gets a bit of like a look behind the curtain at VIP. I doubt that's going to happen. Maybe we should change our VIP program because we've seen that countries like the UK have had to be forced to change these programs in a way that wasn't ideal for, you know, making the most money at the end of the day. What can we do to make these stories stop versus just deflecting every single story as nonsense?

Charlie Horner (11:57.016)
Yeah, I struggle to disagree. I struggle to disagree because these stories haven't slowed down over the last couple of years. They keep coming on a fairly regular basis. The lawsuits keep coming in. mean, it's a little bit of running joke about how these industry lawyers are constantly at work, but it's because there are constant lawsuits being filed and whether...

Jessica Welman (11:58.05)
No doubts.

Charlie Horner (12:25.954)
whether people like it or not, is because players do feel sometimes that they are being targeted in a negative way. So optically, the industry has to come back and say something and tell a positive story about what these programs are doing, why they need the space and the budget to have these marketing programs that they're sort of embarking on because otherwise, from the outside,

And with all the external noise, the public are going to perceive gambling as a negative. And it's difficult to see how that perception changes without the industry coming out and changing something.

Jessica Welman (13:12.684)
That's the thing is it's a lot of responses to things with no meaningful change. At a point, and I'll be honest, I've had conversations with PR people where they have said, we'd like to give you a bit of a look at some of our RG stuff and what we are doing. And it's just a matter of kind of finding time and setting it up because it's not the most urgent thing happening for me at the moment.

You know, you need that. You need... You've made associations. There's a new RG campaign from AGA that started last week that I listened to a call on the research of... It's like Bet's...

Something BetSmart, sorry, AGA, I will remember it eventually, looked at customer responses, making sure that it is something that people are engaging with, and I fully believe that the industry cares about this. It's more difficult of a sell to tell me that it cares about it above bottom line and all else.

Charlie Horner (14:26.732)
Mm-hmm.

Jessica Welman (14:27.446)
but they care about it, they're for sure. Nobody wants somebody to lose their house. Nobody wants that. I don't think any operator would want that and they've said many times, that's terrible, we would never want that. But.

Are you turning a blind eye? Do you have a blind spot, particularly when it comes to VIP in terms of how you're treating things? Because this is now a city filing suit about this program that off the top of my head, I can think of three or four other civilian lawsuits that are alleging the exact same thing. And they just haven't gotten very far along in the process. But there's at least one DraftKings lawsuit that we know is going to a judgment in Massachusetts.

about its sign up offer. And there's two or three others kind of floating around still early in the process. We've got, you know, this one about the New Jersey dad whose wife is suing on behalf of her and her children for like bankrupting them. And all of these, yeah, there's not a decision yet, but it's mostly because it's still fairly early in the process. And the one that happened to be furthest along.

I hate to phrase it this way, but like they got a little lucky that the plaintiff is a convicted criminal with a history of financial crimes. So it was very easy to kind of write this off as frivolous or like a rare case. But now you're getting a lot of people.

drawing attention to this, get John Oliver, who did a last week tonight about it a couple weeks ago, and I don't think the answer is pointing out that John Oliver got some things wrong, which he did. The answer is like why? I think it's fair at this point to say the sentiment around this industry is not great.

Charlie Horner (16:18.614)
No, no, no, you're absolutely right. And it does come back to that point that this industry needs to tell a different story about what it is that they're doing on responsible gambling. It's all well and good telling people that you've got responsible gambling tools. And there are a lot of fantastic people in this industry doing a lot of great things to help protect players and keep players safe.

But we know how much VIP schemes are valued to the point where operators are going to court against each other to prohibit people privy to VIP information, to going to other operators. We know that VIP data is almost impossible to get hold of.

The industry just needs a different story to tell. It can't just keep coming back to, well we need to be regulated because black market or we need to be regulated because we have our G-tools. There needs to be something different or just to pull the curtain back a little bit just to change that perception because at the moment, like you say Jess, it's almost exclusively negative.

Jessica Welman (17:38.496)
Yeah, and the thing is, like, you know, the Maryland framework is very heavy into,

supporting minority business entities and getting the local community involved. It is home of the only sole ownership female owned sports book in the US. There's lots of good stories and they just get overshadowed by this. It's Play Smart from the start is the new AGA campaign by the way. I felt really bad that I butchered that one.

And yeah, it's very much getting overshadowed by this. Next steps are DraftKings and FanDuel will file a response in the state court. If we hear anything from the lottery, the regulators, we will certainly update it on SBC Americas. And then, you know, in the meantime, we're going to continue to write these stories as these lawsuits and such come in.

Charlie Horner (18:39.64)
Yeah, mean, they're gonna keep coming in because they do. We've covered so many and yeah, it's just about that response.

Jessica Welman (18:48.996)
you know, one other thing to keep an eye on wouldn't be an episode with you and I without a mention of Massachusetts. You know, they are in the process of kind of looking at how betters get limited.

and requiring operators to provide that sort of data. And I feel like Eileen and company are probably going to have opinions about this. And I wouldn't be surprised at all if they started asking questions about VIP programs. And now that they've established they're going to ask for limiting betters. I wouldn't be surprised if they started asking for data related to VIP. And I'm sure the operators will tell them it's proprietary information how we handle these programs.

but something to keep an eye on.

Charlie Horner (19:31.854)
Absolutely, yeah. No, we love the MGC and their meetings.

Jessica Welman (19:33.334)
All right.

God bless the MGC. On that note, Charlie, anything going on in your neck of the woods that people should check out and read?

Charlie Horner (19:45.39)
There's plenty going on across the network. Our team are always quite busy keeping on top of all the stories. One example I can give you, actually we did a feature with RISC last week actually about the human touch in a high-tech world about player support.

player retention, touches on VIP schemes as well, I would push our audience to go and read that one.

Jessica Welman (20:12.715)
nice.

Jessica Welman (20:20.126)
Awesome. All right, check that out. Check out SBC Americas and come back tomorrow to check out another episode of iGaming Daily.

Jessica Welman (20:30.186)
Sorry, I'm so bleary-eyed.