Today all the casual investors in the sports betting space got a taste of the political shit that this space can throw at you on a whim. I think everyone, myself included, did not see IL going back on mobile registration after Pritzker’s exec order. (1)

I knew of multiple companies who were gearing up for MASSIVE pushes in IL. Guys who aren’t even FD/DK were ready to spend well north of $10M on advertising in just 5 months. God only knows what DK was preparing for given their only competition would be BetRivers for a bit (2)

My guess would be easily $30M or more. So you spend pretty much all your last month plus getting everything ready for IL. TV, radio, creative, you name it....and the door gets slammed in your face at quite literally the 11th hour. Why? (3)

This is where politics come in. BetRivers in particular hates DK/FD for running what they believe were illegal operations in the state for years, which has given them an enormous customer base to now draw from. IL is their home turf, and they have gone to war on this (4)

That’s why the original plan in IL was to ban FD/DK for 3 years before it got whittled down to 18 months. FD/DK have managed to get casino partners (or FD is apparently buying a track), so they at least got in, but in casino registration harms revenue generation severely (5)

After Pritzker’s exec order, it seemed as though they’d both skipped through, especially DK which was on the verge of pouncing on the whole market. (6)

I would strongly suspect that BetRivers was heavily involved in making the return to in-person registration happen through political influence just to quite literally give DK and FD the double bird. Now it’ll be ~16-17 months before those guys can tap the market. (7)

Now you have to drive to East St. Louis (no thanks) to create a DK account. There’s no question in my mind that this is all the result of politics. BetRivers has political influence in IL. FD/DK not as much. (8)

Politics plays a big role in big states. Take NY for example. People are constantly riding high that NY will allow mobile sports betting because of COVID and the continual upbeat attitude of Gary Pretlow. The reality is much more dire (9)

It’s long been known that Cuomo HATES online betting of any kind. Had he been vulnerable at some point, he might have considered it. But because of his COVID response, he now feels he’s bulletproof as governor. No chance online sports betting happens with him as governor. (10)

Then in CA, as @DustinGouker noted, we had a perfect chance for sports betting this year: public appeared to want it, legislators wanted it, COVID happened meaning perfect opportunity to pass something for more $....and tribes still managed to kill it (11)

And then let’s talk about Texas, where some idiot analyst said Texas might open in 2021. There is a negative 0 percent chance that happens. (12)

So here’s where we are:

CA: years away from true mobile and honestly may never get it cuz tribes
NY: Cuomo has to be gone for mobile
IL: brakes put on for year and a half
TX: probably goes blue before sports betting

Those are the big states, the ones that truly move the needle. I’m not even including FL because it’s owned by the Seminoles. No one is getting in there unless the Seminoles allow it, so it might come, but it’ll be 100% controlled by them. (14)

What’s the point of all this? That there are a lot of politics in this space. And it impacts outcomes significantly. It doesn’t necessarily mean it impacts companies directly but I think it really extends the time horizon on an investment. (15)

Like if NY, CA, etc were opening, then maybe it makes perfect sense for $DKNG to worth $20B and Flutter to be worth $40B. And for crazy day trading too. Everything is upside. That’s probably still there, but more drawn out. (16)

I will say this though, I think delays hurt FD/DK much more than others. They have been racing to get into each state and build a big lead. And while a big lead doesn’t necessarily mean you’ll win long term, it helps (17)

While FD/DK’s biggest advantage is their databases, the second is their tech, which can’t be ignored. Forcing others to go mach speed on the tech side with you when they can’t is a big advantage. (18)

But when COVID struck combined with what just happened in IL, it really helps guys like William Hill, BetMGM. Their platforms are improving. So are others. And a slower approach may also be something a sleeping giant like Bet365 may love. (19)

But today can’t have been a good day for $DKNG. And we may see more days like this in the future. There’s been this expectation that sports betting will just be this wave that overtakes the US and of course legislators will pass it post-COVID! That’s faulty thinking (20)

There’s a lot that goes into making the sausage that I think many people miss. And IL is no better example of that. We all thought DK outsmarted BetRivers and at the last second they got the door slammed on their fingers. Politics, bruh. Get you every time (21)