As Jan. 1 approaches, most of us in the gambling media are doing the same thing: Preparing to peer into our crystal balls and write up our predictions for the coming year.
But before I do that, for the sake of transparency, let’s look at my score for 2022 predictions. Sadly, Online Poker Report is no more, and it has taken with it my post, titled Seven Reasons to be Optimistic About US Online Gambling in 2022. So you’ll just have to take me at my word when I recap my projections and their outcomes:
- The Ontario online gambling market has launched but is facing a legal challenge.
- The World Series of Poker had a good first year in its new home.
- Several iGaming bills came up for discussion, but none passed. (Though you could dock me a half point for not including New York on my list.)
- Michigan has authorized multi-state poker, but the first networks haven’t yet launched … though PokerStars was nearly a buzzer-beater. The Michigan-New Jersey player pool launches on Jan. 1.
- Playtech has opened its first US live dealer studios, but we’re still waiting on Light & Wonder.
- Sadly, New Jersey has not made any progress on gambling treatment diversion court legislation.
- The FanDuel IPO has not happened yet.
So we can call it a 3.5 or 4 out of 7. Not so great. Therefore, I’m done with crystal balls.
This year, I’m reading tea leaves. Can’t miss, right? (Let’s hope it doesn’t, or I’ll have to move on to haruspicy in 2024.)
Although I’m being flippant, I do think 2023 will be more predictable than 2022 has been. It was hard to know how things would look coming out of the pandemic years of 2020-2021. Now that we’ve tempered our hopes of a glorious rebound, there’s a relatively level road ahead.
So, what might we see along that road?
Prediction No. 1: Someone is Going to Pass an iGaming Bill, but Who?
There’s definitely a lot of desire to expand online casino gambling into new states, both on the part of the industry and on the part of lawmakers. However, when predicting this year, I felt there was still too much distraction from the pandemic, sports betting launches, and the midterms. I’m more hopeful for the chances of something succeeding in 2023.
That said, no single state looks to me like a favorite to do so. New York, Illinois, and Indiana are the three that will almost definitely try, but each has some hurdles that it would have to overcome. Still, though each is individually an underdog, I think they collectively have about an even money chance of producing a success story.
At the same time, my gut says we might see a dark horse emerge in the race this year. Virtually every state is hurting for tax revenue, online sports betting has been paying dividends, and legal online casinos aren’t as new and scary to the US public as they were before the pandemic. There are 44 states without online casinos at the moment, which means a lot of chances for one to spring a random surprise on us.
Prediction No. 2: The Courts Won’t Save PredictIt
In August, the Commodities and Futures Trading Commission (CFTC) withdrew its promise not to pursue legal action against the predictions site PredictIt for offering markets on US elections. Now, a legal battle is underway to save the site, which will otherwise have to shut down in February.
I am not a lawyer. So take my opinion with a grain of salt, but I don’t think the lawsuit will succeed. At best, the site might receive the injunction it needs to let existing markets reach their natural conclusion before shutting down for good.
For one thing, PredictIt was supposed to be a purely academic tool. It had probably grown too large, with too much money flowing through it to be considered as such. More importantly, I think the CFTC has a point that withdrawing a promise not to act is different from taking an action. Without enforcement action against PredictIt, I’m not sure what the plaintiffs can challenge. Yet the mere possibility of such action will be enough for Victoria University to pull the plug on the experiment. The fact that the university isn’t among the plaintiffs is another strong argument against its chances.
Prediction No. 3: Pennsylvania Gets the Ball Rolling for Multi-State Poker
Pennsylvania has had online poker for longer than Michigan. However, the Pennsylvania Gaming Control Board (PGCB) has dragged its heels on the subject of sharing poker traffic with New Jersey, Nevada, and Delaware.
One big reason for that was residual uncertainty about whether the Wire Act applies to all gambling or only sports betting. Fortunately, one positive to come out of 2022 was IGT successfully driving the last nail into the coffin of that particular problem. Now that the federal government can no longer interfere with legal multi-state poker, the PGCB will hopefully warm to the idea. It also has Michigan’s example to follow and will see how it benefits that state’s poker tax revenue.
However, what we’ve seen from Michigan is that this is a long process. I wouldn’t expect Pennsylvania to launch multi-state poker in 2023. However, I will go out on a limb and predict that the PGCB confirms that it has received approval from incoming Gov. Josh Shapiro and has begun negotiating to enter the Multi-State Internet Gaming Agreement, a necessary first step on the road.
Prediction No. 4: BetRivers Launches Online Poker Product
One year ago, over the Christmas holidays, we got the disappointing news that Phil Galfond‘s innovative online poker room, Run It Once Poker (RIO), was shutting down its international operations. More surprisingly, Galfond said his plan in doing so was to relaunch the product in the regulated US market.
A few months later, the plot thickened. Rush Street Interactive (RSI), which operates the BetRivers brand, announced it had acquired RIO. Since then, we haven’t heard very much about its plans with the brand. However, RSI CEO Richard Schwartz did confirm in August that “eventually” launching online poker was still part of the company’s plans.
RSI only spent $6 million for RIO, pocket change for a company its size. So, it could easily abandon the project if it decides it doesn’t make sense. However, if it does want to get into the poker space, it will want to do so quickly. There’s nothing to be done now about the head start PokerStars, WSOP, and BetMGM Poker have in existing states, but RSI will want to be able to launch immediately in any new states that pass an iGaming bill.
The debut of multi-state poker in Michigan and first steps for Pennsylvania should also make such a launch more appealing. I think RSI is more likely to launch a RIO-based poker product in 2023, if at all, than it is to wait for 2024 or later.
Prediction No. 5: Fox Bet Ceases to Exist
In November, a federal arbitrator ruled on two out of three questions about the relationship between Fox Sports and Flutter Entertainment. The matter of a potential FanDuel IPO is still unsettled, but the price Fox Sports will have to pay for its share of the subsidiary is now fixed.
At the same time, the arbitrator denied Fox’s attempt to force Flutter to invest more heavily in their joint venture, Fox Bet. That sportsbook was originally the brainchild of Fox and PokerStars before the latter’s acquisition by Flutter. However, with the national leader FanDuel in its stable, Flutter has little incentive to try to build Fox Bet’s tiny sliver of market share.
Fox Bet’s own commitments to the joint venture require it to seek the relevant licenses before taking on its 50% stake in the platform. If not, Fox Bet will dissolve. Flutter will retain the technology but lose the rights to the Fox Bet name. Between its unfriendly relationship with Flutter, the arbitrator’s decision, and the poor performance of Fox Bet, it’s hard to see Fox Sports wanting to sink any more time and money into it.
The sportsbook itself may not shut down, but merely revert to the PokerStars brand. However, I predict that Fox Bet, as a brand and as a joint venture, won’t make it out of 2023.
Prediction No. 6: SI Casino Launches, Flops
In August, SI Sportsbook became the latest entrant to the Michigan market, thanks to the shutdown of TwinSpires. Its parent company, 888 Holdings, has said it will ramp down efforts in sports-betting-only states in order to focus on those where iGaming is possible. Because SI Sportsbook doesn’t operate in New Jersey, Pennsylvania, West Virginia, or Connecticut, that means Michigan.
At the moment, there is no SI Casino, but that plan makes it clear that one is in the works. It’s possible that the brand launches in another state in the meantime, but chances are the new casino product will debut in Michigan.
However, I have doubts that it will perform well being so late to market. Even Michigan tribes with popular retail casino brands like Four Winds and FireKeepers haven’t managed to grab more than 1% to 2% share of the market. Sports Illustrated may have some brand power, but it’s long past its prime. More importantly, the product mockups 888 presented to investors were uninspiring. It would require something special to overcome those other disadvantages and make a dent in the market. So I predict that SI will languish at the bottom of the Michigan revenue table.