July 11, 2024Lauren

It's been a big week in the USA as:

- Illinois' new sportsbook tax system comes into force
- The Betway Group announces the closure of its US sportsbooks
- BetMGM is named EGR's Sports Betting Operator and Employer of the Year
- Evolution's live dealers finally arrive at online casinos in Delaware
- And DraftKings Inc. gets a NJDGE fine and verbal dressing down

Get stuck in and read all about it!

Illinois Tax Hike Comes into Force

At the start of July, Illinois launched its new online sports betting tax rate, bringing into force a sliding scale system that starts from 20% and goes up to 40% of gross gambling revenue.

With taxes increasing from the previous flat rate of 15%, both DraftKings and FanDuel will be hardest hit by the new system, as both operators fall into the highest tax category. 

Illinois is now the USA's second most expensive competitive sports betting state for operators, lagging behind New York, which charges operators 51% (New Hampshire and Delaware both have 50% tax rates but are not competitive markets). 

The tax hike is controversial as it threatens the Illinois market, which reported a betting handle of over USD$1 billion for the ninth consecutive month (May 2024). At the 15% rate, this created US$15.1 million in tax revenue for the state.

Betway US Closure: No "Long-Term Path to Profitability"

Betway's parent company, Super Group, has announced it is withdrawing its sportsbook product from the USA market.

Speaking on July 10th, CEO Neal Menashe said, "As a global business, we constantly evaluate the optimal use of our resources across all markets in which we operate. We have recently concluded an extensive review of our U.S. operations and, at present, we do not see a long-term path to profitability for the sportsbook product."

It's not the end of the road for Super Group in the US. Instead of completely withdrawing, the company is doubling down and planning to focus on iGaming. 

According to Menashe, "The vast majority of Super Group's revenue is generated in iGaming and, in line with that strategy, we will continue to offer our leading casino product in New Jersey and Pennsylvania. We are open to expanding our U.S. footprint if the right investment or strategic opportunities arise."

BetMGM Double Awards Whammy

BetMGM won a double whammy at this year's EGR North America Awards on June 27th in New York. Taking both the Sports Betting Operator and Employer of the Year awards, company CEO Adam Greenblatt said, "Winning two EGR North America Awards is a tremendous honor. We have a passionate team at BetMGM dedicated to delivering best-in-class betting experiences, which saw exponential leaps in capability this year with unparalleled omnichannel opportunities, enhanced user interface, and increased brand visibility. These awards are a tribute to all the hard work and the strong culture that we are building at BetMGM."

2024 is the first time that BetMGM has won EGR's North American Sports Betting Operator of the Year Award. But the operator, active in 29 markets, is no stranger to the EGR Awards stage, winning North American Casino Operator of the Year in 2022 and 2023 — Caesars Entertainment stole this title this year.

Evolution Live Dealers Land in Delaware

Delaware's gaming scene just got better as Evolution's live dealer titles have arrived at DE online casinos for the first time. 

The available collection is set to shake up the market, offering Live Blackjack, Ultimate Texas Hold Em, American Roulette, Craps, Lightning Roulette, Three Card Poker, Power Blackjack, Infinite Blackjack, and Baccarat.

Delaware's gaming market was recently considered largely stagnant following a ten-year license deal with 888 Holdings (now evoke), which only broke the state's revenue sharing benchmark (under this licensing condition, the first $3.75 million of all online gaming revenue goes straight to the state) in 2020.

Rush Street Interactive took over the license at the beginning of 2024, providing all three of the state's online casino platforms. Revenue has increased significantly month over month since.

DraftKings Gets NJDGE Fine Financial Misreporting

DraftKings has landed on the wrong side of the NJ Division of Gaming Enforcement (NJDGE) for failing to comply with the Casino Control Act. The company over-reported money wagered on parlays while under-reporting other types of bets for December 2023 and January 2024. The NJDGE has issued DraftKings with a US$100,000 fine for the breach.

Alongside the sanction, DraftKings received a letter from NJDGE acting director Mary Jo Flaherty explaining the penalty. This letter has now been made public.

According to Flaherty, DraftKings' financial misreporting caused the NJDGE to correct financial records, which hasn't happened since 2011. It also placed them in the "difficult position of responding" to inquiries based on the industry data, specifically the parlay handle. 

Of particular concern for the Division was that DraftKings did not inform them of the issue when they became aware of it, only correcting the error following an inquiry, upon which DraftKings told the Division that the errors occurred due to a coding issue in their then-new database. 

Summarizing, Flaherty wrote, "These types of gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system. They evidenced weaknesses in DraftKings' business abilities and casino experience and unacceptable conduct in dealing with regulations and requisite reporting and financial systems".

DraftKings' has responded to media inquiries with the following statement, "We value our relationship with the DGE and are committed to ensuring compliance with all regulatory guidelines. There was an error in the reporting of our wagering mix breakdown to the state that we have corrected by implementing additional controls."

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