Books stung by negative sports outcomes in Q1

Welcome to iGB’s State of the Union, where we explore the pivotal North American sports betting stories of the week, alongside additional insights into noteworthy trends.

Impact of Unfavorable Outcomes in March Madness on Sportsbooks

This week, high-level executives from major sportsbook operators such as Flutter Entertainment, DraftKings, and PENN Entertainment addressed the significant effects of unexpected sports outcomes during first-quarter earnings calls, overshadowed by broader concerns like macroeconomic factors and the ongoing global trade war.

During these discussions, executives faced intense scrutiny regarding the surprising results from March Madness, which contributed to disappointing financials for the second consecutive quarter. Notably, after a strong showing from NFL favorites covering the spread during the last quarter of 2024, operators observed a stark reversal as underdogs primarily failed to progress in the NCAA tournament this year.

DraftKings reported a revenue decline of $170 million and an adjusted EBITDA impact of $111 million due to these outcomes, while Flutter, parent company of FanDuel, experienced an even more substantial blow, reporting a $230 million decrease in US revenues and subsequently revising its fiscal year revenue guidance from $7.7 billion to $7.4 billion.

PENN Entertainment’s ESPN BET also felt the pinch, registering a $15 million revenue decline alongside a $10 million reduction in EBITDA for the first quarter. Despite encouraging insights from their risk management, DraftKings CEO Jason Robins remains confident that the recent volatility is random and not indicative of an emerging trend.

Florida Legislative Updates: Shelving Non-Tribal Online Sports Betting Bill

This week marked a significant development in Florida’s gambling landscape as the legislature withdrew two prominent sports betting bills, signaling a minor victory for opponents of the Seminole Tribe of Florida. The first bill, SB 1404, aimed to criminalize non-tribal mobile sports betting platforms, a move traditionally seen as an effort to solidify the tribe’s dominance in the online wagering market.

This bill also sought to redefine online gambling, encompassing various cash games of chance, such as digital slots and video poker. The Social and Promotional Games Association praised the withdrawal, emphasizing that it alleviates fears surrounding sweepstakes casino products.

Furthermore, the companion bill CS/HB 1467 sought to criminalize illicit sports betting platforms throughout the state. Legal ramifications linked to allegations against executives at the US Sports Specialty Association (USSSA) are also unfolding, with two whistleblowers alleging financial misconduct. While both legislative measures have been shelved, they remain slated for potential revival in future sessions.

Alberta Advances Sports Betting Legislation

As anticipation builds for the Edmonton Oilers’ potential Stanley Cup run, Alberta takes notable steps toward expanding legalized sports betting. This week, the Alberta Legislature’s Committee of the Whole passed the Alberta iGaming Act, also known as Bill 48, which remains pending Royal Assent for final approval.

Although sports wagering is currently permitted in Alberta, it operates under stringent limitations via the Alberta Gaming, Liquor and Cannabis Commission’s Play Alberta platform. A fully commercialized sports betting framework, akin to Ontario’s burgeoning market, could generate an estimated $700 million in annual gross gaming revenue, according to JMP Securities.

The timeline for launching this expanded market remains undefined; however, Penn Entertainment’s CEO, Jay Snowden, expressed optimism regarding the timeline, indicating that Alberta’s market is likely to come online in the coming quarters. Meanwhile, as the Oilers continue their playoff quest, FanDuel has placed them as favorites with championship odds of +300.

Leadership Appointment for World Cup Task Force

As preparations intensify for the 2026 FIFA World Cup, Andrew Giuliani, son of former NYC Mayor Rudy Giuliani, has been appointed to lead the World Cup task force by US President Donald Trump. Giuliani’s background includes tenure as associate director for the Office of Public Liaison during Trump’s first term.

Prior to this appointment, Senators Marsha Blackburn and Catherine Cortez-Masto urged the Justice Department to investigate the connections between illegal sports betting operations and organized crime, particularly in light of the World Cup and subsequent events like the Summer Olympics in Los Angeles in 2028.

At the US venues hosting the World Cup, five states are poised to offer mobile sports betting, which could substantially enhance betting handles. The gambling industry is also expected to closely monitor illegal data scouting during the tournament, with current futures placing France and Spain as co-favorites at FanDuel, while the US is a longshot at +3400.

Defy the Odds Partners with EDGE Markets for Responsible Gaming

Aiming to promote responsible gambling practices, the startup Defy The Odds, led by prominent female industry executives, has partnered with EDGE Markets, the developer behind EDGE Boost—the first debit card solution specifically designed for responsible gambling.

This strategic partnership was announced following EDGE Markets’ recent funding round of $17.2 million. Since its inception in 2024, EDGE Boost has processed over $300 million in transactions. “EDGE Boost is dedicated to equipping bettors with essential financial tools while ensuring responsible gaming remains a priority,” stated Seni Thomas, CEO of EDGE Markets.

Defy The Odds seeks to create opportunities in the gambling sector through community development, mentorship, and networking. Co-founder Paris Smith highlighted the benefits for operators, stating that the initiative facilitates identifying responsible players without increasing costs or complexity. Moreover, EDGE Boost bank accounts are FDIC-insured, safeguarding users’ financial information through encrypted platforms.