NY Times Shock Probe Into US Regulated Sports Betting Industry
It's been a difficult last couple of weeks for the U.S. regulated sports betting sector. In addition to brands shutting down and wagering accounts getting hacked, now the industry finds it must defend itself against a scathing New York Times investigation.
Forget the betting companies for a moment. The real irony here is that a large number of the Times media colleagues have gotten into bed with the very sportsbooks cited in the report.
Whether by design or ineptitude, any news related to the DraftKings account hackings of this past week is being drowned out by affiliates abusing Google News to push their promo codes (see below).
Affiliates partner with gambling companies and typically receive a cut of player losses, as much as 45% in some cases.
Outside of gambling industry-focused sites like Gambling911.com, the New York Times is one of the few mainstream media outlets that are yet to climb into bed with the industry by benefitting from player losses.
ESPN is another that has steered clear up until now. While the outgoing CEO of ESPN's parent company has made overtures, the return of Bob Iger signals a likely shift away from the sports betting black hole.
Under Iger's tenure, Disney fought off gambling expansion in the state of Florida years before DraftKings and FanDuel tried to find an entry point.
Iger made his position clear during a 2019 earnings call saying that he did not foresee Disney ‘getting involved in the business of gambling’, and that “Getting into the business of gambling, I rather doubt it.”
ESPN's David Payne Purdum is among the most vocal when it comes to the overall lack of transparency in the wake of the early week account hackings.
DraftKings confirmed some $300K had been withdrawn from accounts. Customers, many of whom were locked out of their wagering accounts, claimed it was difficult to find any DraftKings customer service during the hacking period. Links and numbers to customer assistance on the website also appeared to be in disarray, some broken while others redirected to dead pages.
Purdum has since called the company (and industry as a whole) out via Twitter.
It’s Thanksgiving Eve, so I get it, but as someone who covers the sports betting industry, the response and communication from sportsbooks and regulators regarding the recent cyber-attacks is troubling to me.
— David Payne Purdum (@DavidPurdum) November 24, 2022
Customers deserve better. Period.
As for the New York Times probe, Howard Stutz of the Nevada Independent summarized its findings. The New York Times, we would note, is one of the few media outlets able to generate enough revenue through firewalls and its subscription-based model.
The newspaper published a four-part series following a nearly yearlong investigation into the national expansion of legal sports betting and questioned some of the consequences.
Within the articles, the Times questioned different state-by-state sports betting tax structures and the lobbying practices used to influence lawmakers. The articles also disputed figures cited by the industry surrounding illegal offshore gambling operations, criticized efforts by sports betting operators to advance responsible gaming practices and examined questionable customer acquisition efforts that target college students.
The NY Times probe is reminiscent of a 2010 investigation launched by Gambling911.com that found Full Tilt Poker and PokerStars were under a federal investigation one year prior to the day of reckoning forever known now as "Black Friday". Both companies were indicted on Friday April 15, 2011 with principals in Full Tilt Poker found to be embroiled in a ponzi scheme.
As a result of the G911 investigation, which sought to uncover information pertaining to the government probe of Full Tilt Poker in particular, a federal judge in New York ultimately ruled that the U.S. government is not entitled to withhold information from Internet news sites related to sealed indictments.
The honorable District Court Judge Laura Taylor Swain recognized Costigan Media's Gambling911.com as an entity that "reports on issues affecting the gambling industry, including legislation, criminal prosecutions of industry participants, and efforts to legalize various forms of gambling. Costigan Media is a
source of gambling-related information and commentary for numerous news outlets."
"Her ruling was significant for all online media outlets whether it be the Huffington Post, The Daily Beast, Perez Hilton or TMZ.com," commented Jagajeet Chiba for Gambling911.com at the time.
Between the time of the ruling and subsequent indictment, gaming industry news sites and affiliates continued to bombard search engines and social media platforms with promotions for Full Tilt Poker and PokerStars much the same way more mainstream news outlets continue pushing U.S. regulated sportsbooks these past couple of days, all the while turning a blind eye to what transpired over the weekend with the customer account hackings.
Las Vegas-based gaming industry advisor Brendan Bussmann stated in reference to the Times piece that “one of the most regulated industries, and the portrayal that it is anything less in this series of articles is ludicrous.”
Days after the customer account hackings at DraftKings, mostly crickets.
- Alejandro Botticelli, Gambling911.com
