Taking a gamble

Hi folks, it’s Brad in San Francisco. Sunday’s Super Bowl is primed to break records in the field of online sports betting. But first…Today’ [View in browser]( [Bloomberg]( Hi folks, it’s Brad in San Francisco. Sunday’s Super Bowl is primed to break records in the field of online sports betting. But first… Today’s must-reads: • [Google invested $400 million in a ChaptGPT rival]( • [Activision must pay a $35 million fine]( • [SpaceX got a NASA contract worth up to $100 million]( Place your bets A year ago, a Bloomberg Businessweek cover story [heralded]( the “first Super Bowl of the online betting era.” Apps like DraftKings and FanDuel would let people in more than two-dozen states gamble “on a nacho platter of options” — not just who would win the game but on ephemera like who would catch the first completed pass, who would commit the first turnover and the precise length of the National Anthem performance. (Winning bet: one minute and 50 seconds.) But last year, it turns out, was only a chips ‘n dip appetizer for the decadent banquet of betting about to take place when the Philadelphia Eagles play the Kansas City Chiefs in Super Bowl LVII. Legal sportsbooks are projected [to take in over $1.1 billion in bets](, a 16% increase from last year’s total. That would make it the most bet-upon sporting event in US history. A few factors are contributing to the continued surge. This year, sports betting became legal in several more states, including Louisiana, Maryland, Massachusetts and Ohio, bringing the total to 33 states, plus Washington, DC. It continues a trend that began in 2018, when [the Supreme Court struck down the law]( barring sports betting. Companies like DraftKings Inc. and Flutter Entertainment Plc (owner of FanDuel) and casinos like Caesars Entertainment Inc. and MGM Resorts International, co-owner of the BetMGM app, have become fixtures at sporting events and broadcasts with promotions starring the likes of Jamie Foxx, Kevin Hart, the Manning brothers and JB Smoove. In this weekend’s game, we’re sure to see more commercials urging viewers to download an app and start wagering money. Market leader FanDuel, for example, is making its first ever Super Bowl ad, in which the retired tight end Rob Gronkowski will attempt [to kick a field goal live](. As a result, a nascent industry is booming — while the anachronistic act of actually visiting a sportsbook remains relatively stagnant. Not everyone is comfortable with the idea of unleashing sports gambling on the masses. In November, California voters roundly [defeated]( two ballot propositions that would have legalized it in the state. One of those initiatives, opponents said, was deceptively promoted as a solution to homelessness. The nation’s second- most populous state, Texas, has also stayed off the bandwagon, though legislators are [reportedly]( considering it. In the financial markets, there’s evidence that the feverishly optimistic early days of online sports betting have come to an end. The stock price of DraftKings is down 76% from its mid-pandemic highs. Flutter is still looking for an opening [to take FanDuel public](, while smaller players, including [Churchill Downs](, [Fubo Sportsbook]( and [MaximBet](, the online arm of the men’s lifestyle brand, all folded their cards and exited the sports betting business over the last year. “The tide very much turned over the last 12 months,” said James Kilsby, chief analyst of Vixio GamblingCompliance, a market research firm. “These companies, generally speaking, are all being pressured to show a pathway to profitability.” More modest pressure is also coming from regulators in states wary of being overly permissive of what is, after all, considered a vice. When states like Ohio and Massachusetts legalized sports betting recently, they followed the restrictive approaches of Italy and Spain, where sports betting has long been legal. In these states, for example, online sportsbooks are prohibited from marketing to people under 21 and restricted from offering “[risk-free bets](” to try to entice new gamblers. Maine, now in the process of legalizing sports gambling, is considering [even stricter limitations]( on advertisements, including an outright prohibition on celebrity endorsements. Still, the odds are that these will be minor hurdles and that the underlying trend of more people gambling more money online on high-profile extravaganzas like Sunday’s big game will continue. You can bet on that. —[Brad Stone](mailto:bstone12@bloomberg.net) The big story The five Guillemot brothers are clinging to control of Ubisoft, the video game company behind Assassin’s Creed. They’re [fending off potential takeovers]( and under pressure from Walt Disney, Microsoft and Apple, which are grabbing up independent studios and vying for gamers' attention. Get fully charged A judge in Spain ruled that Amazon drivers should have been hired as employees, not freelancers, marking [the first time a court has found against the Amazon Flex service](. Cryptocurrency giant Binance returned to South Korean crypto markets two years after it exited, [buying a majority stake in the troubled exchange GOPAX](. Watch: Why are tech companies laying off so many people [when the US labor market is thriving](? GM’s driverless car rollout is encountering problems in San Francisco, where [vehicles have blocked traffic, clogged bus lanes]( and interfered with firefighters. Silicon Valley investor and crypto evangelist Tim Draper received a frosty response in Sri Lanka as the South Asian nation [rejected his proposal to adopt a decentralized currency](. Follow Us More from Bloomberg Coming Soon: Bloomberg’s newsletter chronicling corporate bankruptcies, distressed debt and turnaround stories, delivered Tuesdays and Fridays. [Sign up for The Brink]( This week on the [Crash Course]( podcast, host Tim O'Brien explores the past, present and future of the multi-billion-dollar sports betting boom. Find this special miniseries of the Crash Course podcast on [Apple]([‎Crash Course on Apple Podcasts](), [Spotify]( or wherever you listen. Get Bloomberg Tech weeklies in your inbox: - [Power On]( for Apple scoops, consumer tech news and more - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Game On]( for a playthrough of the video game business - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley Like getting this newsletter? 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