As New Jersey sues the DOJ Dominic Gates asks if we will finally get to see Sheldon Adelson’s influence on US lawmakers in black and white. And while the Fox Bet announcement this week was big news stateside, it may be a long and costly road before it dominates the US betting scene.
New Jersey-DOJ Lawsuit: will Adelson’s influence finally be revealed in black and white?
It’s well known that money plays a decisive role in US politics, giving those who are rich enough the power to lobby for and push through laws and policies that can have major impacts on the general population.
From guns to pharmaceuticals to health insurance, money and lobbying heft rule the roost in the US; and gambling is no different, albeit with different outcomes. Which is why the lawsuit New Jersey has brought against the Department of Justice for its refusal to comply with a Freedom of Information request the state has made to get the information pertaining to its January decision to alter its Wire Act ruling in January. If the case actually reveals the role Sheldon Adelson played in getting the DOJ to review its original 2011 ruling things could get very interesting.
As you know Adelson is the owner the Las Vegas Sands Corporation and has been a long time opponent of online gambling. It is widely believed that he has besieged the DOJ to alter its 2011 Wire Act ruling and with sports betting being regulated across many states since the PASPA repeal in May last year, his lobbying has gone into overdrive.
So his actions are well known to industry observers, but since officials are duty bound to keep all records of communications between different parties in cases like these it would be fascinating if clear evidence of his lobbying came out and finally appeared in black and white.
Fox Bet on your TV set
Fox Sports and the Stars Group (which owns Sky Bet and PokerStars) have announced a betting and media strategic partnership to cover the US . The deal is for up to 25 years and Fox will acquire 4.9% of the Stars Group initially (and just under the 5% stake threshold that would mean further scrutiny and regulatory disclosures).
The agreement is major news for the sector stateside and even though it is impossible to say whether it will be successful there are a number of factors that differentiate it from previous bookmaker-media group partnerships.
However, it is also worth remembering that historically a number of media companies have built up projects to launch and operate sportsbooks and very few have been successful. Whether in the UK, most recently with the massive failure of Sunbets, or in France when Eurosport launched Eurosportbet in 2010 before selling it to Unibet a couple of years later, none of those projects gained the traction many expected.
Ironically, one of the few media betting tie ups to work was the Guardian’s GoWager launched back in 2014-15. The betting site was developed with the small betting platform provider FSBTech and worked well. At the time FSB’s CEO said “the sportsbook was designed to fit in with the Guardian’s brand guidelines and to be as unobtrusive as possible.
“We designed it with their readers in mind and believe it fits perfectly around their existing up to the second commentary on various matches and overall content.”
So what happened to GoWager? Guardian readers complained bitterly about how a mainstream newspaper shouldn’t be promoting sports betting and the group’s journalists refused to work with it on the same grounds and it shut down within a year of opening.
The irony is striking; the UK newspaper with some of the strongest anti-gambling views in the market launches a sportsbook that ties in nicely with its quality sports coverage but is pressured by its readers and journalists to close it down.
Sky Bet: the exception to the rule
It’s difficult to know exactly why those ventures failed, sometimes spectacularly. Even though the Daily Telegraph and The Sun’s fantasy football leagues are still very popular, media companies are not able to transfer their readers’ enthusiasm for fantasy league to sports betting.
They certainly have audience, reach and brand recognition, but are not able to recruit enough players and turn them into regular punters.
The sector is highly competitive and costly in terms of marketing and there may be some wishful thinking from the executives behind the new ventures that all those profits can be easily diverted into their coffers, before they appreciate how difficult it really is…
Sky Bet is the only true exception to this roll call of failure. The bookmaker is now part The Stars Group, but it made much of its name on the back of the Sky Sports brand in the last 15 years.
But it’s also worth questioning whether the Sky brand name association was so key in its success. Sky Bet never abused the relationship and the channel made a point of quoting and giving coverage to other bookmakers, very much to avoid being criticised for unfair treatment of its corporate betting arm.
Sky Bet upped its marketing and brand exposure considerably in recent years, notably with its Football League sponsorship, but it had also already developed highly successful real-money and fantasy sports betting products such as ‘Super 6’.
The flipside to the Sky Bet success story is that its ventures in Germany and Italy have not been successful and its UK focus and the fact that its brand name is so well known here should also be taken into account.
Also, how much of Sky Bet’s success is down to the Sky name and marketing budgets and how much is it down to operational excellence and developing quality products? The fact that it is so difficult to answer that question with any certainty must provide a clue as to why it has done so well.
Audience and politics
Two final points on Fox Bet. Fox Sports is nothing like its UK counterpart Sky Sports when it comes to reach and audience figures in the US. According to analysts, at peak times it reaches up to a third of the US population, but it is much smaller than market leader ESPN.
And from a broader political perspective, with its hard right and at times far-fetched rhetoric the Fox media brand is toxic in much of urban America, where high population states and cities offer the best prospects of sizeable markets for operators.
Still, there is no doubt that it has the attributes to become a strong betting brand in the US, but as one analyst commented when the deal was announced: “This emergence is likely to be long, fiddly and financially draining for most protagonists for some time to come.”