2023 in US Gambling – The Biggest Losers
Everyone loves a winner, and the gambling business certainly produced a lot of them this year. But the story of the big losses are often somehow more interesting.
Herewith, the disappointments, the financial losses, and the questionable decisions.
Although 2023 was a record-breaking year for U.S. gambling overall, the market is a competitive one, and some smaller operators struggled to keep up.
Sports betting was especially cutthroat, with the market losing half a dozen operators over the year. On top of that, many of those were closed at a loss for their owners.
2023 also saw some big fines issued by regulators, and some changing conditions for various sectors – most notably in daily fantasy sports.
Biggest Operator Losses
The biggest “L” of the year, to use the modern parlance, was undoubtedly for European-based Entain, who jointly operate BetMGM, the online arm of MGM Resorts International.
The penalty saw it avoid a British criminal investigation into its gambling operations in Turkey, back when it was known as GVC Holdings. Just two weeks later, CEO Jette Nygaard-Andersen resigned, and leadership changes continue for the troubled operator.
In terms of settlements, it was also not a good year for social casinos. Slot maker IGT and its former subsidiary, DoubleDown, paid a $419 million lawsuit over their former social casino operation; giant Amazon is facing a social casino-related lawsuit in Washington; and California’s Fliff is also facing legal action.
Overall, the second-biggest “L” (at least the most publicized) of the year was probably Penn Entertainment’s sale of Barstool Sports. Just months after finalizing the $551 million purchase of Barstool that it started in 2020, Penn then sold the media portion of the brand back to Dave Portnoy for a reported fee of just $1.
Penn previously made a loss-making Q1 of 2023, mostly based on the relatively modest performance of Barstool Sportsbook. The ‘book had faced much regulatory scrutiny over Barstool’s media operations and the involvement of the controversial Portnoy.
However, Penn did then go on to replace Barstool with ESPN Bet (spending a reported $1 billion over the next few years to do so), which has been so initially successful we put it in our list of the biggest wins of the year.
Daily Fantasy Sports Declines
The year started off with a big hit for fantasy sports’ market prospects, with Bally’s closing down Monkey Knife Fight in January, having bought it only months earlier for $93 million.
That loss on Monkey Knife Fight for Bally’s was a sign of the changing winds for DFS operators. Sports betting has now well and truly taken over from its smaller cousin, which was popular before legalization.
Purely DFS operators know it, too – but in their attempts to diversify, 2023 has seen them clash with regulators in increasing frequency.
Many operators attempted to launch more sports betting-like games with prop bets, which promptly proved unpopular with various regulators and lawmakers.
Maine ruled them out of its upcoming sports betting market in 2024. New York sports betting regulators banned ‘Pick Em games in the state, and Florida lawmakers sent operators cease and desists over the games.
This comes as DFS revenues are down across the nation, with operators in some states seeing year-on-year declines of 50% or more.
Biggest Bettor Losses
With the increasing acceptance of sports betting comes wider coverage of high-profile sports bettors and gamblers.
And, oh boy, did high-profile bettors make some losses this year.
Chief among them, as has been much-memed online in recent years, was Drake. The Canadian megastar rapper lost $1 million betting on soccer in late 2022, with a failed bet on Argentina to beat France in normal time in the World Cup Final (they won on penalties). He continued that losing streak into 2023.
He lost a further $1 million dollar bet on Justin Gaethje to beat Charles Oliveria in a UFC championship bout early in the year. And he then also lost $400,000 betting on YouTuber-turned-boxer Jake Paul to win his exhibition bout with Tommy Fury. Although he did win several hundred thousand betting on the Denver Nuggets upset championship win, an event on which bettors also rinsed the ‘books nationally.
But Drake’s sports betting losses in 2023 pale in comparison to that of a legendary Texas furniture magnate.
Jim “Mattress Mack” McIngvale lost $8 million, with a potential payout of $50.9 million, betting on the Houston Astros to win the World Series.
Famous for his big bets, the 79-year-old was typically stoic about his loss. “Sometimes you get rained out, and you don’t look back,” he reportedly said.
To be fair, in 2022 he turned up to Nevada retail sportsbooks with a wheelbarrow to collect some $30 million he had won betting on the Astros. You win some, you lose some.
The last big betting loser for 2023 didn’t really happen in 2023 – it was only revealed in detail this year. But, if true, it would make Mattress Mack and Drake look like penny slots players in comparison.
In one of the biggest gambling stories of the year, famous sports bettor and convicted insider trader Billy Walters’ new book featured tales of the extraordinary figures that legendary golfer Phil Mickelson allegedly spent on gambling during their friendship.
And it was a lot. More than $1 billion over a decade, Walters claimed. The book also sensationally alleged that Mickelson asked Walters to place a $400,000 bet on his own team U.S. while playing in the 2012 Ryder Cup.
The golfing star was forced to make a social media post talking about his struggles with problem gambling over the years.
Lastly, let’s talk social media. Although there were, as usual, several candidates, the biggest “L” post of 2023 in U.S gambling has to go to DraftKings. On September 11, the operator offered its 300,000 X followers a 9-11 themed parlay wager, with special odds on three New York sporting matchups
Somewhat ironically, considering the leading U.S. sportsbook would probably like to forget it ever posted the swiftly deleted offer, the bonus wager was called Never Forget.