GME3: Teaching a Bo-Dog New Tricks, Ad-justing the Framework & X-tinction in Progress?

In this week’s GME3 we’re looking at the departure of Bodog from the province of Nova Scotia, a new round of expert witnesses providing feedback on the upcoming Bill S-269, and an update on the performance of X two years after being acquired by Elon Musk. Read the full stories here!

Gambling

Teaching a Bo-Dog New Tricks

The online sports betting and casino platform Bodog has told customers in Nova Scotia that it will no longer offer services in the jurisdiction and will close accounts permanently as of October 3rd.

In the email sent out to clients, the company stated that “Decisions like this are made on a province-by-province basis and are never easy, nor made lightly, particularly when it affects loyal players like you. As our time together draws to a close, we’d like to thank you for playing with Bodog, and to assure you that we’ll be monitoring your province for regulatory changes.” The email continued to advise customers to withdraw their account balances, noting that futures scheduled to result after October 2 have been voided, with the amounts refunded to customers.

While it’s not immediately clear what spurred this sudden departure from the Nova Scotia market, there are some details that could help shed light on the decision. For one, this comes shortly after the offshore sportsbook, Bovada, departed from several U.S. states after receiving cease-and-desist letters from regulators.

Bodog and Bovada share a common origin, both being part of the “Bodog Brand.” Bodog was founded in 1996 by Canadian Calvin Ayre, before being purchased by Alwyn Morris and the Morris Mohawk Gaming Group (MMGG) in 2006.  Ayre and three others were indicted in the U.S. in 2012 for, surprise surprise, running an illegal sports betting business. While the felony charges were eventually dropped in 2017, the domain name of the Bodog website was temporarily seized as well.  While this was all going on, the “Bodog Brand” announced that it would withdraw from the U.S. In December 2011, Bodog Brand announced that U.S. residents would be blocked from using Bodog and that MMGG would no longer use the brand, instead pivoting to their new platform, Bovada.

While the two entities are legally distinct from each other, Bovada and Bodog have been accused of maintaining ties. A class action lawsuit filed in Kentucky in 2023 claimed that Bodog listed Bovada as a site within the “Bodog Network” and that Bodog redirected users in the state toward Bovada. The suit’s claims have not been proven in court.

It’s currently unclear whether Nova Scotia regulators had a hand in Bodog’s departure, but the Atlantic Lottery Corporation (as well as Loto-Québec) have made it clear in the past that they intend to push back against offshore and unregulated gaming sites doing business in Canada.

Bodog’s exit from Nova Scotia raises questions about the pressures facing offshore gaming operators in Canada. With growing regulatory scrutiny in Canada, it will be interesting to see if this signals a broader trend for offshore operators or if Bodog’s exit is an isolated event. For now, Nova Scotia players are left to adjust, as the local gaming landscape continues to evolve.

Media

Ad-justing the Framework

Expert witnesses took to the floor earlier this week as part of a Senate hearing on Bill S-269, the National Framework on Advertising for Sports Betting Act. Among these experts was Paul Burns, the President and CEO of the Canadian Gaming Association (CGA).

In his opening statement, Burns argued that he doesn’t believe S-269 is necessary, as most of what the bill aims to do is already in progress. He specifically noted Ontario’s advertising restrictions and regulations around responsible gaming messaging. Anecdotally, Ontario has seen a far higher uptake of RG messaging and practical tools than operators are legally required to offer. Burns instead called for more research into the topic, so regulators can become more informed.

“There’s value in coordinated research across the country,” he said. “There’s a gap, especially around advertising. We as an industry would love to see more. What we learn from evidence-based research gives us tools to better protect players.”

Furthermore, another witness Dr. Kahlil Philander (who also co-authored a CGA study on gambling ad regulations) noted that current research into how advertising impacts problem gambling is falling short of the mark.

“Despite prevalent assumptions and even claims by well-credentialed researchers, the evidence linking gambling ads directly to gambling problems is largely non-causal. While advertising can influence gambling behaviours, the scale and nature of this influence is poorly defined by the limitations of existing research… To evolve Canadian gambling policy in an effective way over time, it’s essential that Canada invest in its researchers and research institutions.”

Data also shows that the initial explosion of gambling ads is beginning to ebb. Catherine MacLeod, the president and CEO of ThinkTV, provided statistics showing that the number of online gambling ads ThinkTV reviewed has been declining, from 442 in 2022 to 299 in 2023. ThinkTV further forecasts that 2024 will end with 60 fewer gambling ads than it reviewed in 2023, representing a 20% year-over-year decrease.

As the Senate continues its review of Bill S-269, expert testimony highlights the complexity of regulating advertising in the sports betting industry. While voices like Burns and Dr. Philander call for more comprehensive research into the impact of gambling ads, current data shows a decline in ad volume, suggesting the market may be self-correcting. The upcoming clause-by-clause review of the bill will be key in determining whether additional legislative measures are needed or if existing frameworks, bolstered by research, will suffice.

Entertainment

X-tinction in Progress?

According to estimates from investment giant Fidelity the social media platform X is worth almost 80% less than two years ago purchased by Elon Musk. While the platform is no longer trading publicly since the purchase, Fidelity has been tracking the approximate value of the shares, serving as a barometer for the overall health of the company.

As of the end of August, those shares were worth just $4.2 million, according to a Sunday filing by Fidelity’s Blue Chip Growth Fund. This marks a 24% drop in value from what Fidelity estimated in July and a shocking decline of 79% from the $19.66 million that Fidelity estimated the shares were worth in October 2022 when the acquisition took place. If this valuation is accurate, X would now be worth just $9.4 billion, compared to the $44 billion that Musk paid for it.

Analysts say Fidelity’s plunging price tag for X likely reflects shrinking ad revenue at the company. Some advertisers have expressed concerns about extreme content on the platform that they don’t want their brands linked to. A recent global survey by Kantar found that 26% of marketers plan to decrease their spending on X next year. A mere 4% of advertisers think that X ads provide “brand safety” (certainty that their ads won’t appear near extreme content), compared with 39% at Google. X is also facing issues regarding user engagement and retention.

In August, X had 73.5 million monthly active users in the U.S. on iOS and Android combined. That represents a drop of nearly 11% year over year and a 20% decline from October 2022. These trends suggest that X is struggling to maintain both advertiser confidence and user engagement, raising questions about its long-term viability under the current operating strategy.