Major Sports Book Fined: Insights from Legal Expert

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00:00Welcome back to Newswire here on Sports Grid.

00:04One of the bigger fines levied out against a sports book, or I should say on a sports

00:09book, just happened recently.

00:10We're going to dive into this with Pat Evans from Legal Sports Report.

00:14This is not like a five-figure fine or anything like that, but first we will hit on the very

00:18latest with prize picks.

00:19Hey, Pat, thanks for coming on the show once again today.

00:23Good to see you again.

00:24Thanks for coming on.

00:25Yeah.

00:26Hey, Craig.

00:27Thanks for having me on twice in one week while all my colleagues are off enjoying a

00:29vacation.

00:30So you know what?

00:31That's okay.

00:32I mean, double the pay, Pat.

00:33You know, I mean, you just take it anytime you can, that's what I would say.

00:36All right.

00:37I get paid the big bucks for coming on here.

00:41Huge bucks.

00:42So let's start off with prize picks.

00:45Very up and down year for them and a lot of these other non, you know, very specific sports

00:51betting operators.

00:52Some of the peer-to-peer gaming companies, a wild year for them.

00:55Maybe when you recap the year, you'll talk about that.

00:59Adam Wexler, no question, initially when prize picks launched and really got to that next

01:04level, he's responsible, I'm guessing, for a lot of that, but he has decided to step

01:08down as CEO.

01:10And so maybe more so, I would ask, Pat, how do we interpret this?

01:14Is this something that would speak to more of the future as the crackdown has come in

01:19on some of these peer-to-peer gaming sites?

01:23It does come at a curious time, but not necessarily because of that.

01:26Because yes, you're right.

01:27We've had a crazy year and a half or so of regulatory scrutiny coming down at these DFS

01:342.0 or DFS Plus operators, however you want to describe them, you know, that they offer

01:40essentially a parlay bet-like product that kind of has been able to get around a lot

01:46of rules and regulations.

01:47And some regulators have said, whoa, hold on, that's too close.

01:50And of course, now we've talked about that in the past.

01:53But what's really interesting about this decision at this point is Wexler, as you noted, is

01:57an entrepreneur at heart.

01:58He started a few DFS companies and certainly has an eye for this kind of industry and getting

02:06things going and off the ground.

02:08And I think he's seen the point where, okay, PricePix is this pretty big monster now out

02:13there, even with some of the scrutiny that's been put on it, and there's lots of opportunity

02:17in front of it, which is why they've just hired a firm to kind of look at mergers and

02:23acquisitions.

02:24Bloomberg reported that they're not looking for an outright sale.

02:28So as Wexler kind of says, okay, I'm going to step aside, become the executive chairman.

02:33They're going to bring in Mike Ibarra, who is a, you know, seasoned exec.

02:36He comes from the video game developer Blizzard, which has done Warcraft and Starcraft if you're

02:42a gamer of any sort.

02:45He also has, you know, 20 years at Microsoft where he was a vice president in the Windows

02:51and Xbox divisions.

02:53So he's got lots of experience, lots of managerial and probably foresight and however you want

02:58to talk about it.

03:00And he's coming in just as they're starting to talk about mergers and acquisitions.

03:03Now what does that mean?

03:05That's to be determined.

03:06We'll see what kind of thing happens.

03:08You know, there's been floated ideas that somebody might come in and take a big chunk

03:12of it and help them grow even more.

03:15There's been ideas floated that maybe they'll purchase a small sports book and use their

03:19large database that they've built up in some of these states that haven't legalized sports

03:24betting yet, including California, Texas and Georgia.

03:28You know, they've got, you know, they're headquartered in Georgia.

03:30So that's a big home state for them.

03:32And so there's lots of opportunity there.

03:33And I think Wexler probably said, you know what, I got it off the ground.

03:37I've got it to a really good place.

03:38I can still help guide it from a chairman position and kind of work with our new CEO

03:43to find where these new, you know, expansion opportunities are.

03:49And we'll see where it goes.

03:50I mean, again, there's big opportunity in Texas and California for anybody who has a

03:55decent sized database.

03:56So if they can figure out how to transform that once those go live, though, this is just

04:01kind of an aside.

04:02I was talking to an industry, a former industry executive who's now in consulting and he said,

04:07I've told clients, you know, wait till 2030 for Texas and California or don't budget anything

04:13for them.

04:14So those two states, as we've talked about many times on the show, whether it was me

04:17or any of my colleagues, those two states are just a very complicated mess.

04:23But PricePix is still trying to figure out its way forward.

04:26And they are, you know, by far the biggest DFS company at this point and making their

04:30way forward.

04:31So, you know, just an interesting executive switch at an interesting time as they're looking

04:34at mergers and acquisitions and have developed into a industry stalwart and trying to figure

04:39out their next steps.

04:41Yeah, and I know you'll cover that for us.

04:43Another story that you've covered recently is this huge number that was levied out in

04:48terms of fines to Bet365, the number a half a million dollars in fines for odds over a

04:57three year period.

04:59OK, so I'm going to need to understand, Pat, a little bit more about this.

05:03Did Bet365 over charge odds to customers for three years?

05:09Is that what went on here?

05:10What exactly is this?

05:12It was across, I think, 13 events or something like that over the three years.

05:17And they're being ordered to repay customers or refund customers for paying out at worse

05:22odds than those customers ended up buying in or betting.

05:27They saw or they noticed that there were bad odds up on the board and they corrected them.

05:34Now, what normally needs to happen, according to the New York gaming regulators, is you

05:38have to go back to the regulators and say, you know, we need to do this and get approval

05:42for it.

05:43Well, they didn't do that.

05:44They went around it and let the customers kind of float on and then they paid out the

05:48odds, the worst odds.

05:51So they're just being told to refund those bets.

05:54And, you know, I think that's just a good sign that regulators are paying attention,

05:58that customers are getting, you know, not getting shafted.

06:01And again, that's one of the good things about a legal regulated market is, you know, you're

06:06making sure the customer is getting rewarded appropriately.

06:11You know, if that was an offshore operator, they would have gotten away with that.

06:15Now did Bet365 do this on purpose?

06:17It does not appear that way.

06:18I don't think that was their intention.

06:21I think they just noticed a bad set of odds for any of these events on the board and said,

06:25well, we got to fix that.

06:26And, you know, things got lost in the shuffle at that point.

06:30So just kind of the regulatory market working as it's supposed to in short.

06:35Yeah, no, it is.

06:38All right.

06:39Fair enough.

06:40Let's end with this story here in Maryland, a story about online casino betting, not so

06:44much about the actual betting that's going on, Pat, but about what a lot of these companies

06:49seem to be doing.

06:50And I know you've been reporting on this is like internal reviews as to how they have

06:54handled legalization of going online and their rollouts.

06:58So what did we learn or what did the legislatures learn from their rollout in Maryland?

07:02Yeah.

07:03So we were at a conference, pretty much the whole team and myself in Pittsburgh last month,

07:08you know, with legislators from gaming states.

07:10It's literally called the National Council of Legislators from Gaming States.

07:15And you know, there was quite a bit of talk about online casino legislation.

07:18I mean, this is where, you know, the money, the revenue is going to come for most of these

07:24operators in the future, way more so than sports betting.

07:29Now that we have 38 plus states legalized, they're turning their attention to this.

07:33Maryland was probably the closest to getting it done last year.

07:37And Senator Ron Watson was by far the most insightful thing we saw at this conference

07:41because he got up in a fireside chat and kind of laid out what happened.

07:46Basically, he said, you know, that legislators need to treat this rather than a piece of

07:50legislation, which granted it is.

07:53They need to treat it like running a full campaign because there is a lot of education

07:57that needs to happen around this and why it's important to regulate it kind of like we were

08:01just talking with in New Jersey and sports betting.

08:04So basically, he just said, you've got to get it around.

08:06You've got to get the education out there because things like the cannibalization argument

08:11that came out in Maryland in big force killed the issue because there was a casino that

08:17came out and said, you know, this is going to hurt us.

08:20The union of workers showed up in mass to one of the hearings and that, you know, legislators

08:26see that and it dies.

08:27So basically, he's like, you just have to run it like a campaign.

08:31You've got to get a whole team behind it to educate legislators and the public on why

08:34this is important and why it's good for the public.

08:38So it'll be interesting to see if anybody uses that lesson going into the next session.

08:42All right.

08:43Well, Pat, twice this week, twice the fun, twice the information.

08:46You can even get more of it over at LegalSportSupport.com.

08:49Thanks again, Pat, for coming on the show.

08:51Thanks, Craig.

08:52I'll see you next week.

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