#6: Regulators Come For Barstool

Kyle: Rough couple of weeks for Portnoy et al. The froth last year extended to gambling promotion. Regulators paid a lot of lip service to advertising and promotional restrictions, but a lot of stuff seemed questionable at best. I think this is less about Portnoy and more about how deeply Barstool’s content and ergo its sportsbook is aimed directly at college bros. 

Jason: It is very clear that regulatory seesaw has moved towards reining in the operators. The optics are tough considering that Caesars essentially sponsors the entire LSU campus and 5 states allow betting for 18+.

This is how the federal government gets involved. When you have some states allowing the branding of college campuses, others tacitly allowing NIL deals, and then Ohio going after ad targeting parameters. Bawhgod that's the central regulating body's music!

The on campus show must be difficult to monitor. Who can scan a code or register in person? But the regulations are in place for a reason and PENN will have to clean things up a bit.

REAL-TIME UPDATE. Looks like Ohio regulators have a problem with hosting a pre-game show on a college campus and directly compelling students to pre-register for a sportsbook.

Well I nailed that.

There's more.

Would appear the new wave of states is applying, like, a lot more scrutiny to operators. Perhaps to be expected given we’re now into the “less eager to approve sports betting” part of the country.

Wait until California in 2088.

Nothing like steep advertising restrictions in a post-apocalyptic hellscape.

But for real, home state for DraftKings continues to give issues to other operators. Time to fire up that horrible AI to draw a picture of Jason Robins fighting Julius Caesar.

Nailed it.

So, as we’ve detailed here before, I’m super skeptical of this push to create a documentary about every marginal sports league in an attempt to recreate the F1 success. But, ATP tour might work. It hits all the same checkboxes: great worldwide sport, excellent product just not truly loved by Americans, beautiful people with funny European accents. And also I took up tennis this year. This will explode the profiles in the US for the athletes featured in the show. I'm in.

I have no thoughts on this, but I suspect you're not nearly as good at tennis as you claim to be.

This is wild, and close to our sphere. Kendall helped construct one of the largest sports betting affiliates ever, and sold his assets somehow TWICE to Catena Media. Now he’s buying Milk Road (one of our favs) with the founder of JM Bullion. That is a Mad Libs I did not envision this morning.

Wait…..250K subscribers for Milk Road, that did not come cheap. Also, somewhat surprised to see Kendall going after crypto. Gives me some comfort that the bottom may be in. Buy low….

Also goes without saying that our little newsletter thing here just got some juice!

Here’s why I love this play. We know and have made our bones in affiliate marketing. But this past year, as we explored what to do next, it became clear you needed a strong brand and not just a bunch of SEO mousetraps to do this in competitive industries in 2022 and beyond. Hence literally this email. I respect the hell out of Kendall and am a big fan of Shaan Puri (founder of Milk Road). Milk Road instantly gives an affiliate savant a brand and 250k email addresses. Meanwhile, he now has a moat in that the business is better diversified and not stuck to whim of Google. Quite the power move here.

The SEO mouse trap will always have its place, but the core weakness of that biz model is you do not own the audience. Lower funnel sites are transactional, not brand relationship building. The ease of building a following via a newsletter platform like beehiiv has opened the door to both concepts working well together.

So this is interesting. Looks like affiliate behemoths Catena and XLMedia (our former company) are positioning themselves as pure play US opportunities.

Well, the value of that sale is damn close to the current market cap of XL Media.

Those two companies combined would make for a pretty compelling US listing that based on public filings would dwarf the North American revenue of Gambling.com, which is listed on the Nasdaq.

Btw….if we use this in the newsletter we need to mention that we are XL Media shareholders 😎