State of the Union: BetMGM Sets Wager Floor in Illinois and More
Welcome to iGB's State of the Union, a look at the biggest North American sports betting stories we've covered over the week and briefs on others we found interesting.BetMGM sets $2.50 floor on all wagers in IllinoisBetMGM is the latest sportsbook to respond to Illinois’ new tax on the handle generated by legal sports betting operators.Beginning Wednesday, BetMGM increased the minimum bet amount to $2.50 for all wagers, according to a note disseminated to its Illinois customers.The change applies to every bet, including same-game parlays, round-robins, bonus bets and tokens with a minimum bet requirement of $2.50. A similar policy has already gone into effect at Hard Rock Bet, which has established a $2 minimum on bets placed in The Prairie State.In May, Illinois lawmakers included a last-minute amendment in the state budget with the nation’s first-ever tax on sportsbook handle. The provision established a $0.25 tax on all bets up to an operator’s first $20 million in handle. When an operator clears the threshold, they will be taxed at $0.50 per wager.Three others – DraftKings, FanDuel and Fanatics – responded by announcing plans to impose a surcharge on customer wagers. Fanatics is imposing a charge of $0.25 on all wagers, while the two others will institute a per-wager charge of $0.50 in response to the new tax.When the state passed the budget, Truist Securities analyst Barry Jonas outlined three pathways that operators could opt to take to defray the added costs.Jonas predicted that any floor on minimum wagers would be greeted unfavourably by bettors. Just as penny-stock traders thrive on low-cost trades, some bettors capitalise on parlays under $2. A thread on Reddit contains a laundry list of payouts on high-risk bets. One bettor posted a slip of a 50-cent, 8-leg parlay that paid more than $40 (+7953).MLB’s Manfred confident automated system will resonate with fansFor the first time in a regular season, Major League Baseball tested an automated ball-strike system for challenging umpire calls at Tuesday’s All-Star Game.As the sports betting industry continues to embrace cutting-edge technology for streamlining operations, experiments such as the one on Tuesday will be closely watched by those who dabble in microbetting. For instance, Wimbledon organisers this month deactivated a Hawk-Eye tracking system in a fourth-round match after officials blamed the system for a missed call.In Tuesday’s 95th MLB All-Star Game, the American League went 3-for-3 on challenged calls, including a first-inning pitch from Tarik Skubal that was initially called a ball. Cal Raleigh, a Mariners catcher, challenged umpire Dan Iassogna’s call on an 0-2 pitch to Manny Machado. Seconds later, a digital graphic from the ABS system indicated that the ball grazed the lower boundary of the zone, triggering a satisfied smile from Skubal.Prior to the game, MLB Commissioner Rob Manfred expressed optimism that fans will develop an affinity for the system. The league experimented with the system in more than half of MLB spring training games.“There’s always adjustments that are made, you don’t want to bring something to Major League Baseball until you have a really good feeling about how predictable the outcome will be,” Manfred told the MLB Network.Of the five challenged calls on the night, four were overturned. iGB reached out to four leading sportsbooks for input on whether they offered markets on if the next pitch would result in a strike. At least two, FanDuel and Fanatics, did not have such a market.Sport betting allegationsMLB experimented with the automated system despite an ongoing investigation into suspicious betting activity pertaining to two games involving Guardians pitcher Luis Ortiz. The investigation is reportedly focused on two balls from Ortiz that hit the ground when badly missing the strike zone.The investigation served as a hot topic at last week’s National Council of Legislators from Gaming States meeting, as regulators, integrity monitors and West Virginia Attorney General JB McCuskey weighed in on the subject.As with other league commissioners, Manfred is not a major proponent of microbetting.“Certain types of bets strike me as unnecessary and particularly vulnerable – things where it’s one single act and doesn’t affect the game outcome necessarily,” Manfred said.Analyst: Increased odds that Penn opts out of ESPN BET partnershipAs Penn Entertainment prepares to report second-quarter earnings, a prominent Wall Street analyst believes there is an increased likelihood that the operator will discontinue its ESPN partnership that enables the ESPN Bet sportsbook brand.Penn is approaching the two-year anniversary of a partnership formed in August 2023. Under the 10-year, $1.5 billion deal, both sides have an opt out to exit the agreement after three years. Jeffrey Stantial, a Stifel analyst, will focus on commentary related to Penn’s online sports betting strategy at next month’s call.“On the Interactive front, we see increased probability that Penn exits the ESPN Bet relationship, although it is likely priced into shares already with overly conservative expectations for long-term iCasino market share,” Stantial wrote in a research note.On a long-term basis, CEO Jay Snowden has targeted nationwide OSB market share of at least 20% by the end of 2027. While Snowden appears encouraged by new rollouts from ESPN BET for the football season, the operator’s share still lingers in the single digits.In April, Snowden and Penn Chairman David Handler wrote in a letter to shareholders that the company had underperformed in sports betting by metrics on market share and financial performance.Penn traded at $17.75 a share on Thursday, up about 1%. The stock has jumped about 6% since the company held its annual shareholders meeting last month. Penn is scheduled to report second-quarter earnings on 7 August.Feds end probe of offshore prediction market PolymarketWith news on Kalshi breaking at a rapid pace in recent months, it may come as a surprise that several other prediction markets stole the spotlight this week.US Justice Department prosecutors have closed an inquiry into crypto-based prediction market Polymarket, Bloomberg reported. Despite being banned on US soil, Polymarket still handled trading volume in excess of $100 million on the 2024 US presidential election.One unidentifed “French whale” made a profit of approximately $85 million on his winning trades on Donald Trump. The US Commodity Futures Trade Commission also completed its probe into Polymarket, according to Bloomberg. Prior to the election, FBI agents conducted a “court-authorised” search of Polymarket CEO Shayne Coplan’s home last November.Also this week, PredictIT announced it had reached a new agreement with the CFTC that will allow it to expand operations, including raising limits on positions for individuals.The CFTC issued a letter to PredictIT in 2014 that allowed the New Zealand-based prediction market to offer election betting.Eight years later, the CFTC rescinded the letter, leading to a protracted legal battle. The developments regarding PredictIT prompted leading gaming blogger Steve Ruddock to muse whether Polymarket is “waiting in the wings”.Browns’ battle at QB highlights NFL training campBesides political markets, Polymarket offers a plethora of event contracts on sports. Perhaps the most burning question ahead of NFL training camp concerns which quarterback will start for the Cleveland Browns in Week 1.As of Thursday afternoon, Joe Flacco held the lead with a 42% probability. Former Steelers QB Kenny Pickett ranked second at 34%, while rookie Shedeur Sanders trailed the field with a probability of only 7%.Separately, reports surfaced that DraftKings has held discussions with prediction market Railbird Exchange.Regarding the deal speculation, DraftKings said it speaks to many companies in the normal course of business, but it declined comment on any specific negotiations with Railbird.ICYMI on iGBSources reported that a deal was reached to accelerate the timing of bookie Matt Bowyer’s sentencing.Online gaming and sports betting drove New Jersey gambling revenue in June.There were reports that DraftKings is in discussions to acquire Railbird prediction market.Hard Rock suspended a top executive amid AML allegations involving a prominent illegal bookie.At the NCLGS legislative conference, the debate over online-retail cannibalisation in gaming continued amid other controversies.Tennessee sports betting handle dipped to a 10-month low in June.Personality-driven sports are shaping the future of betting products.Growth from iGaming and sports betting pushed Pennsylvania gambling revenue up in June.
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