SPORTS BETTING IN FOCUS

BetMGM Sets $2.50 Minimum Bet in Illinois

BetMGM is the latest sportsbook to respond to Illinois’ new tax on the handle generated by legal sports betting operators.

Beginning on July 16, 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 already went into effect at Hard Rock Bet, which has established a $2 minimum on bets placed in the Prairie State.

In May, Illinois lawmakers approved a last-minute amendment in the state budget with the nation’s first-ever per-wager tax. 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 they would initiate a surcharge on customer wagers in September. Fanatics plans a charge of $0.25 on all wagers, while the two others are instituting 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 unfavorably by bettors. Just as penny-stock traders thrive on low-cost trades, some bettors capitalize 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).

Analyst: Increased Odds Of Penn Opt Out From ESPN BET Partnership

As 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 partnership with ESPN 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, though 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 20-plus percent 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 July 17, up about 1 percent. Penn has jumped about 6 percent since the company held its annual shareholders meeting last month. Penn is scheduled to report second-quarter earnings on August 7.

MLB’s Manfred Confident Automated System Will Resonate with Fans

For the first time in a regular season, Major League Baseball tested an automated ball-strike system for challenging umpire calls at its July 15 All-Star Game.

As the sports betting industry continues to embrace cutting-edge technology for streamlining operations, such experiments will be closely watched by those who dabble in microbetting. For instance, Wimbledon organizers this month deactivated a Hawk-Eye tracking system in a fourth-round match after officials blamed the system for a missed call.

In the 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. GGB 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.

MLB experimented with the automated system despite an ongoing investigation into suspicious betting activity pertaining to two games involving Cleveland 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.