Part I of this two-part article looking back on 2022’s biggest and most intriguing stories in the gambling industry appeared Tuesday. We now complete the countdown to No. 1:
5. Online gaming accounts hacked, FBI called in
All those warnings you get from your online accounts that “your password can be easily guessed” or “don’t use the same password in multiple places” — it’s probably time to start heeding those rather than just clicking them off your screen.
In November, online sportsbooks customers, primarily at DraftKings but also at FanDuel and other sites, were victims of a data breach. Experts believed it to have been “credential stuffing,” whereby hackers accessed people’s passwords from other online log-ins, found that the same passwords worked on their online gaming accounts, and made off with customers’ money.
DraftKings and other sites announced plans to make everyone whole. However, they struggled in some cases to do so in a timely fashion, resulting in some of the most dire customer complaints the U.S. mobile betting industry has seen. How serious is this? The investigation quickly escalated to the involvement of the FBI.
In related news, New Jersey regulators began requiring multi-factor authentication (a two-step log-in) prior to the breach, and Pennsylvania has since followed — a trend likely to continue in other states in 2023.
4. Three states legalize, four states launch
Spoiler here, hinting at what’s in the No. 1 spot on this list: There’s one state that launched sports betting in 2022 that demands to be separated from the rest. But “the rest” were still plenty newsworthy.
Three states legalized sports wagering: Maine (finally!), Massachusetts (finally!!), and Kansas — which then turned around one of the quickest launches ever. Others that launched this year in addition to Kansas included Louisiana, Arkansas, Maryland (finally!!!), and, outside of U.S. borders, Ontario.
And then there’s Ohio, which legalized sports betting in 2021 and is poised to launch operations as early in 2023 as is chronologically possible.
3. Calvin Ridley suspended for betting on NFL games
The NFL’s policy is clearly spelled out: Players and personnel are not permitted to wager on NFL events. In March, the league determined that wide receiver Calvin Ridley bet on NFL games in November 2021. Even though he was on temporary leave from the Atlanta Falcons at the time — citing mental health issues — and could not directly influence the outcomes of the games he was betting on, the penalty was stiff: an indefinite suspension, taking Ridley out for at minimum the entirety of the 2022 season.
Sports Handle soon reported that Ridley bet more on the NFL than he admitted to and than was reported initially. The suspension remained the same, and he was traded in November to the Jaguars, so he’s positioned to sport the Jacksonville teal in 2023.
What Ridley did — wagering legally in Florida on a handful of games over a few days while he wasn’t actively playing — isn’t necessarily scandalous. But it’s a story with major resonance. This was the NFL putting its foot down and making an example of a well-known athlete.
2. California ballot measures fail spectacularly
Everyone knew well ahead of the Nov. 8 election that neither of the two ballot measures to legalize different forms of sports betting in California was going to pass. But nobody saw this big of a blowout coming. The ballot questions may as well have asked Californians if they wanted to legalize murder.
Proposition 26, which would have legalized in-person wagering at tribal casinos and four horse racetracks, was defeated 67-33%. Proposition 27, for commercial sportsbooks to offer online wagering, lost 82-18%!
Whether it was poor strategy (such as tying the measures to preventing homelessness), negative/confusing advertising (the tribes worked harder to dissuade support for 27 than they did to generate support for 26), or just bad timing, those hoping to bet on sports legally in the Golden State are stuck waiting at least two more years. Whatever happens, it is sure to be one of the top 10 stories in the U.S. gaming industry once again in 2024.
1. New York launches mobile, records instantly fall
Want to know what you’re missing out on, California? Mobile sports wagering launched in New York state in January, and faster than you could say “risk-free first bet,” the Empire State was tops in the nation in handle, revenue, and especially tax revenue.
With only in-person betting permitted from 2019-2021, New York’s record single-month handle in that span was $25.6 million in October 2021. In January ’22, the first month with online betting — and only a partial month at that — New York’s $1.69 billion set a monthly U.S. handle record that still stands. By football season, single-month revenue was nearing $150 million, and the state collected more than $75 million in taxes in November. Before New York launched, only once in history had all the states combined produced that much tax revenue in a month.
How sustainable is the industry in New York, with the 51% tax rate leading to a quick reduction in advertising and promotions and making it tough for smaller books to turn a profit? That remains to be seen. But in Year 1, the bettors flocked to their phones, the major operators made bank, and the state had some serious coinage to show for it.
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