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Despite its immense popularity, player prop betting has been highlighted as a problem child of sports betting in the last couple of weeks, from student sports to professional sports. This news recap covers that and other interesting news items relevant to players, bettors, and industry professionals.
TLDR: a Bite-sized Overview:
- The National Collegiate Athletics Association (NCAA) is requesting a ban on college player props, as they pose a threat to the integrity of the competition and student safety. While regulation may be the answer to mitigating risks, over-regulation of legal US sportsbooks may have undesired consequences as bettors are likely to use illegal alternatives readily available online and offline.
- According to a recent study by Truist, ESPN Bet is poised to conquer market shares from FanDuel and DraftKings. While the survey suggests that ESPN Bet is in a good position to make the top three, Penn Entertainment’s previous sportsbook endeavors with Barstool Sports indicate that they must improve their product to compete with the top three of the best US sports betting sites.
- In six months, DraftKings has suffered two class action lawsuits relating to unfair marketing practices in two states. While the suits may not hold up in court, we may see greater transparency in marketing communication, such as welcome bonuses in the future.
- Toronto Raptor player Jontay Porter becomes the first NBA player to receive a lifetime ban from the NBA due to breaking the league’s gambling policies. Porter was found to be involved with betting against himself and his team to turn a quick buck. The full extent of his and his companions' illicit activities remains unknown. Still, it does show that the NBA needs to get better at informing and advising against this type of activity, as it’s relatively easy to discover with modern sports betting technology.
Regulating NCAA Player Props is Tricker Than it Seems
Following the annual buzz surrounding March Madness, NCAA president Charlie Baker has called for a nationwide ban on proposition betting in college sports. According to Baker, the issue is that prop bets on individual players threaten integrity and competition, putting student-athletes at risk of harassment. Baker has urged states to examine the current legislature and reconsider offering player prop betting.
Maryland, Ohio, and Vermont have banned all forms of prop bets on college athletes. Last month, the Louisiana Gaming Control Board (LGCB) announced that it would ban prop bets as of August 1, 2024. More states are expected to respond to the call for action from the NCAA, with New Jersey, Kansas, and Wyoming considering banning collegiate player prop betting. A majority of the remaining states have a mix of limitations around prop betting, most commonly states allowing prop betting exclusively on out-of-state college teams. North Carolina is an exception, with no restrictions on NCAA player props.
Today, on May 7, Mark Hicks, the Managing Director of the NCAA, is joining Martin Lycka’s Safe Bet Show during the upcoming SBC Summit North America to talk about these issues with industry stakeholders. Hicks is calling for multistate collaboration and a widespread commitment to ban prop betting on college sports.
From our point of view at JustGamblers, it’s hard to fault the NCAA in their request. While you can argue that adult pro athletes should be able to handle the pressure from the outside, we shouldn’t expect student-athletes to hear criticism from bettors who find themselves on the wrong side of an outcome. However, putting an outright ban on college player props won’t magically make the problem disappear. Harassment related to college player props is nationwide; it’s a 50-state issue even if sports betting is only legal in 38 states. This means bettors find alternative ways to place player prop bets outside legal US sportsbooks, including local illegal bookmakers and offshore betting sites. Slapping more regulations on legal alternatives will simply grow the illegal market for gambling.
ESPN Bet Reportedly Set to Conquer the US Sports Betting Market
It’s no secret that FanDuel and DraftKings are dominating the legal online sports betting market in the US. One of the primary reasons these two brands dominate today is their origins as daily fantasy sports providers. By the time sports betting laws were enacted in 2018, both FanDuel and DraftKings already had most of the audience in their bags. Traditional operators, including BetMGM and international sportsbook brands like Bet365 and Betway, have struggled to compete. Therefore, it may seem unlikely that the newly launched ESPN Bet (launched Q4 2023) could pose the biggest threat to FanDuel and DraftKings.
Similarly to FD and DK, ESPN Bet is at the top of mind with bettors for services adjacent to sports betting. According to a recent report by Truist, among respondents who frequent ESPN products and showed an interest in betting, a majority (52%) stated that they are likely to switch to ESPN Bet as their primary sportsbook. 45% of the remaining respondents said that they could start wagering with ESPN Bet.
If ESPN Bet is to become a podium player, they must step up their game. As evidenced by Penn Entertainment’s earlier forays into online betting, with Barstool Sports, they haven’t provided the same high standards as either FanDuel or DraftKings. At this point, the two juggernauts are still ahead regarding technology and user experience. If ESPN Bet were to capture the market, as per Truist’s surveys, they would need bettors to migrate and keep the new users on their app. With the current state of ESPN Bet’s technology, in our opinion, that’s unlikely since both Fanduel and DraftKings are too far ahead.
DraftKings Faces Another Lawsuit Relating to False Advertising
As of last month, DraftKings is facing a second class action lawsuit, this time in New York, relating to its promotional offering. This lawsuit relates to DraftKings' advertisement of “risk-free” bets, which, according to the claim, are not risk-free.
The lawsuit outlines the mathematics behind the promotional offer, arguing that the free bet is not worth the stated cash value and should not be considered risk-free. For one, when a risk-free bet is lost, the bettor must wager the cashback funds before converting them into dollars. Secondly, if a risk-free bet is won, it generates less money since DraftKings keeps the initial stake. According to the lawsuit, the legal violation argues that the promotion violates state consumer protection law by misleading customers. This is similar to the first class action from December 2023, which argues unfair and deceptive marketing practices made by DraftKings in Massachusetts.
The problem with these lawsuits is that information about promotional requirements is typically available one or two clicks away from the big juicy promo banner. At the same time, one can sympathize with consumers new to the online gambling industry who may get blinded by one-line offers without reading about the specific terms. In the case of using the term “risk-free”, sports betting operators should consider different wording that is more indicative of the offer. The term should only be used if it’s genuinely risk-free and has no strings attached. We’ll see how these lawsuits play out; ideally, a change would come about that limits the use of “risk-free” and “free”. Another positive change would be to improve transparency, simply making it mandatory to display critical information such as wagering requirements, minimum deposit, and time periods as part of the promotional banner instead of having the information 1-2 clicks away.
NBA Player Banned For Sharing Insider Information and Betting Against Himself
NBA player Jontay Porter was probably best known as Michael Porter Jr.'s younger brother before getting singled out in a betting scandal. It didn’t take long for Adam Silver and the NBA to drop the banhammer, relating to bets on his and his teammates' statistics and health, and even his betting against his team on more than one occasion.
This is the first time an NBA player has received a permanent ban for violating the league’s gambling policies. And what’s more, Porter was on a two-way contract between Toronto Raptors and Raptors 905, meaning that his ban applies to the NBA and the official development league, the NBA G League. Godspeed.
There are no signs of him being a victim of coercion. Porter was trying to pull a fast one together with a group of people he was connected to. This may indicate more significant issues within the NBA and other American sports leagues. First, the league needs to get better at educating players about the gambling policy and perhaps consult with iGaming professionals to show how gambling operators work to detect unusual betting patterns. We’re not living in the 1970s, where we’d rely on a whistleblower to unearth betting scandals. With modern technology, it’s relatively easy to uncover betting patterns that suggest illicit activities. This was the case with player props relating to Porter on two of his games earlier this year.
On two occasions, multiple bets of $10,000 and $20,000 were attempted on under bets for Porter player props, which raised flags with betting operators, causing them to alert the league and start an investigation with the NBA. If it’s the case that players on minor contracts can manipulate game outcomes and bet outcomes, the risks are that more incidents may happen. If the league proactively educated about the punishment and extent of surveillance, fewer players would attempt to follow in Porter’s footsteps.