Former Gambling Executive Jason Ader Offers 2023 US Industry Forecast

The gambling industry focus in 2022 was about mergers and acquisitions, the failed attempt to legalize sports betting in California, and successful mobile launches in New York and Ohio — plus the quickening pace toward legalization of online casino.

It’s 2023. So now what?

Gaming Today asked Jason Ader, the co-founder of SpringOwl Asset Management and a former executive at Las Vegas Sands, IGT, Bwin, Stars Group, and Playtech, to lay out what will happen this year.

iCasino Will Continue To Dominate US Companies’ Plans

JASON ADER: Sports betting was always a Trojan Horse in my view. It was the way for states to get to know the business.

But in any market that’s developed digital gaming — and we can look to Europe and other parts of the world — live dealer games are the most profitable online. Casino is by far more profitable than sports.

Sports is casting a wide net, and the [professional] leagues want it.

And it improves engagement, but it’s a slim-margin business. It’s a volatile business. There were plenty of times when we were shareholders of Stars Group, we would look at the Sky betting results, and I think it was the year that Leicester City just kept winning every match.

There’s just a lot of volatility in sports betting, and it’s unpredictable, and it’s not that great from a profitability and cashflow perspective.

Sports betting was always a Trojan Horse in my view. It was the way for states to get to know the business.

So you need live dealer, you need Evolution games. The Evolution games are so profitable, and you can see it in their valuation.

That’s critical to the success in the US. I don’t think it’s going to happen so quickly. You’ve already starting to see the signs of a backlash, your political backlash against the proliferation of gaming, sports betting advertising, underage gaming.

I wouldn’t hold my breath [a proliferation of online casino legalization], but all the operators will try for it. I don’t think there’s an investment case yet in that part of the gaming ecosystem.

California Voters and Lessons About Ads, Patience

JASON ADER: [The ad blitz around Props 26 and 27] just was too much. I think it’s a cautionary tale. It’s been very hard there. This isn’t the first time with California.

In California, there’s been lots of efforts to not just bring digital gaming, but gaming to the marketplace.

There are quite a few counterparties that would fight to see that not happen – as you can imagine, the tribes and of course Las Vegas as well. I’m not sure if we should get our hopes up for any sort of expansion in California in the next few years based on the results.

Dissecting Sports Betting Defeats in California

JASON ADER: The European investors in digital gaming were very, very optimistic about the US. The US investors, I think, probably were a little bit more savvy, recognizing that not only is the state-by-state process very difficult, pooling bets between states remains a challenge and the highest concentration of people in New York, Florida, California, Texas were untapped.

More telling than California is the tax rate in New York. I mean, my God, if that’s, if that’s the future of gaming — the tax rate in New York is just so prohibitive — then what’s really the point?

Investing your money in a US government bond would generate more income than over-50% tax rate in the market.

There’s a good reason why [gambling company] stocks are down. I mean, in some cases, 80%. They were too high. The probability of profits does matter, especially when you have in the marketplace the biggest and most successful companies like Google, like Facebook, like Amazon, like Tesla, down 50%, now.

You have the biggest companies in America, down 50%.

Smaller companies that are losing money have sort of no chance of profit in 2023, and probably in 2024 are going to be really be penalized. And I think that’s been the storyline for the small digital gaming companies and even up to DraftKings size in the US.

NYC Casino: When, Where, Who?

JASON ADER: Citi Field seems like it makes sense.

Times Square … I mean, just the traffic and logistics are so bad now. It’s hard to imagine what that would be like.

Citi Field, New York Mets [owner] Steve Cohen ….  Las Vegas Sands still has a lot to offer that seems very positive.

But just in terms of flow of traffic, infrastructure, parking, highways, proximity to various population centers like West Chester, Long Island City, I think that’s a great option.

Is Barstool Still Worth the Trouble for Penn Entertainment?

JASON ADER: It’s a fascinating business. I love some of their YouTube programming. I watch it with the kids.

We were watching these two guys at the World Cup who were going around and pretending to be Americans who knew nothing about soccer, but like, watching soccer with British people and talking about four quarters when there’s obviously two [halves]. It’s really funny.

I like their sports media business. Once you cross over into gaming though, obviously you have regulatory oversight and then Dave Portnoy put himself into politics, which has proven to serve very few people well.

Steve Wynn, probably case in point. As soon as he became [National Finance Committee chairman] of the Republican Party it was sort of the end of his gaming life, which is sad because he created a lot for Las Vegas and [sexual harassment] allegations were very old, but that’s what happens.

And so Dave became a political figure for the right, appeared with President Trump, appeared with Fox News quite a bit, so they’re going to take him down, you know?

I just don’t think, Massachusetts — which is a liberal state [with] probably liberal regulators — is going to view kindly the privilege [of] having a gaming license in the state for something so controversial. Look what they did to Wynn and now look what’s sort of happening with Penn.

Barstool’s Place in Modern Sports Betting Environment

JASON ADER: With Barstool, why should a gaming company own a sports media company really speaks to customer acquisition versus customer retention.

If you own a sports media company, does it drive a competitive advantage in customer acquisition and customer retention, and also a lifetime value?

I do believe that there is a very synergistic relationship between sports betting and sports media. So Barstool does help Penn in terms of customer acquisition, customer retention, and lifetime value. However, the offsetting now is the controversy and the risk to license, none of which is great. That’s the risk. ESPN, Fox Sports, Bleacher Report, you sort of go down the list, those are all going to be well-positioned as the business matures.

Barstool has a great gaming demographic, and good programming for sports betting. I’m sure it’s giving the Penn board some heartburn, but I think they’re better off owning it than not.

UPDATE: On Feb. 17, Penn announced it had completed its acquisition of Barstool and noted that in three years since investing in the brand that Barstool had:

  • Increased its audience by 194%.
  • Amassed total podcast downloads of 1.6 billion.
  • Amassed 128 billion video views on 875,000 videos.
  • Increased ad sales by 160%.
About the Author
Brant James

Brant James

Senior Writer
Brant James is a senior writer who covers the sports betting industry and legislation at Gaming Today. An alum of the Tampa Bay Times,, espnW,, and USA Today, he's covered motorsports and the NHL as beats. He also once made a tail-hook landing on an aircraft carrier with Dale Earnhardt Jr. and rode to the top of Mt. Washington with Travis Pastrana. John Tortorella has yelled at him numerous times.

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