Gambling Insider Q&A: SBA President Joe Maloney Outlines Industry Challenges

Maloney says he’ll measure the SBA’s success by its ability to support the expansion of legal wagering and help rein in tax rates. While there are a number of pro-gambling bills on the dockets as this year’s legislative sessions kick off, many are underdogs to pass. Meanwhile, an increasing number of states are looking to raise taxes on operators.

After a two-year stint with the American Gaming Association, Maloney was named to his new role in December, coinciding with DraftKings’ and FanDuel’s exit from the group. His experience in the regulated gaming industry dates back prior to 2018, when the US Supreme Court overturned PASPA. As a founding partner of Locust Street Group, a Washington, DC-based public affairs agency, he helped tell the story of casinos and their potentially positive impact on communities. In 2020, he moved on to the District’s NFL franchise, where he guided the organization through the new legal environment, in addition to his involvement in the team’s search for a new stadium.

During a 30-minute phone call last Thursday, Jan 15, we chatted with Joe about his transition from the AGA to the SBA, the challenges prediction markets present to the regulated industry, rising tax rates, game-fixing scandals, and the bright futures of the NFL teams he follows behind rising star quarterbacks.

Gambling Insider: Were your feelings of excitement about sports betting shared among other people in the Commanders’ offices? What was the overall temperature there? Was there trepidation, was there excitement, was there unfamiliarity and nervousness? 

Maloney: I worked for an owner, Daniel Snyder, who was extremely progressive in the category. The then-Washington Redskins were one of the very first clubs to formally partner with a DFS company [FanDuel in 2014]. Dan Snyder was one of a smaller cohort of owners within the league that was really viewing this with a very, very progressive mindset. 

From my experience with the Commanders, it was all systems go. It was very much seen as an important opportunity for our fans. It was an opportunity to deliver revenue for the club, [and] all that revenue becomes football-related income. It all goes back into the collective bargaining agreement [so it’s shared with players]. It helps lift all boats across the league, and it helps continue to help you reinvest in the club to presumably put a championship-caliber team on the field and win more football games. 

It was a very mission-aligned objective to be in that space and to deliver these partnerships for the club.

Gambling Insider: Your move from the AGA to the SBA came right after DraftKings’ and FanDuel’s decision to leave the AGA. Is that timing coincidental, or is there a more direct relationship at play here? 

Maloney: My decision was focused on the opportunity that was put in front of me. I think the timing was purely coincidental. It was really just an opportunity to take on a leadership position with these companies specifically and focus on legalization efforts. …

The developments with respect to the AGA probably broadens the portfolio of things that we will have to take on, [with some members] not continuing to be able to have the AGA take on some really important obstacles for the industry. [The AGA] is gonna continue to do a lot of important work on behalf of this category. 

We say this every year, that each year is like a new inflection point, but this year certainly feels that way with some of the national narratives that we face that could potentially hold up further commercial and tribal expansion of legal regulated gaming.  We’re gonna have to continue to find ways to work together. 

Gambling Insider: The SBA has no official position on prediction markets. Do you anticipate it will at some point, and what will shape that position? 

Maloney: That’s a hypothetical that I’m not gonna respond to. We don’t have a position right now, given that some members have launched prediction market products and others haven’t. 

Here’s what I will say: For the conversations we’re having on expanding legalization opportunities, we have to communicate that in jurisdictions such as California, Texas, Minnesota, not only were we consistently pointing to illegal market actors … now we’ve got several very large national players operating prediction markets that are easily able to access residents in those states under a federal registration and regulatory framework. … 

The emergence of prediction markets is a very important additional data point in the overall discussion that we’re having with these state-based stakeholders on how they’re considering the development of legally regulated marketplaces. 

Gambling Insider: What are you hearing from them?

Maloney: They’re acknowledging the reality, and we just have to continue the multi-stakeholder dialogue, continue to espouse the benefits when it comes to consumer protection for residents of those states, and when it comes to the opportunity for tax revenue to fund a lot of critical priorities that states are facing right now on really both verticals –  online sports wagering and online gaming as well. …

It is a constant topic of conversation, and it undoubtedly is putting additional visibility on online gaming. Our efforts to continue to communicate the benefits of the traditional online sportsbook model are all continuing in the same fashion as they always have. 

It’s just we went from talking about Bovada and BetOnline.ag and demonstrating Google results for illegal market actors to now having several very prominent national brands in the prediction market space really leveling up that conversation in a meaningful way. 

We don’t yet know what it means. Sessions just went in. We’re in the legislation drafting process.  We’re in that multi-stakeholder dialogue place, and so time will tell if that actually moves the needle

Gambling Insider: Let’s talk about today’s news. Indictments came down, alleging point shaving in college basketball. How [do scandals such as this] sort of enter the discussion with states in your lobbying efforts? I would imagine it’s part of the discussion, and what do those conversations sound like? 

Maloney: Absolutely, and look, these incidences are disappointing for sports fans, and it’s absolutely a setback for the overall commitments to integrity within sport. But we really view these incidences as opportunities. 

Once these press conferences take place, once these charges are made against offenders, it’s the opportunity for us to now talk about the work that we do. … As these charges have come to light, authorities, US attorney’s offices, the FBI, they’re really pointing to the coordination and the collaboration with legal operators in exposing these bad actors. 

So this is certainly not an obstacle. This is very much an opportunity for us to talk about how we engage and identify this activity, how we report this activity, and ultimately how we collaborate and cooperate with law enforcement and with leagues and with the NCAA and in bringing these bad actors to justice. 

Gambling Insider: There’s a lot happening in Illinois. The SBA came out with a statement recently about the per-wager tax causing a decline in the number of bets. At the same time, October was a record month for handle in Illinois. Those things seem to conflict. What’s your read on that?

Maloney: The important trend to point to is back-to-back months, consecutive months, [the number of bets is] declining in the state of Illinois. And let’s be clear, that’s not happening in any other jurisdiction. 

You can point to handle continuing to grow, but this is truly an outlier, and the only difference that you can point to the new per-wager taxes and the increased tax environment generally speaking in that jurisdiction. …

There are a number of responsible gaming advocates that literally predicted this. You potentially could see a world where there are fewer bets, or bettors are potentially just increasing the size of their bets, which contributes obviously to higher handle. … 

This decision was put forward in the previous legislature, [and] it moved through the implementation and the enactment process. We’ve been at the table for those meetings, and we continue to be at the table, and we are pointing to data trends that potentially reveal something problematic that the legislature should continue to keep an eye on.

Gambling Insider: Meanwhile, the city of Chicago is imposing their own [10.25% sports betting] tax. What did conversations with the city sound like before the SBA took legal action [seeking an emergency injunction to block enforcement of the city’s new sports betting regulations]?

Maloney: What we’re trying to clearly communicate [to the city council and Mayor Brandon Johnson’s office] is how such punitive tax measures will only make it far more expensive for Chicago sports fans. … It’s not our job to tell them how to manage their budget, but it is our job to defend our industry and continue to promote a legal regulated marketplace that provides for growth and innovation. 

Unfortunately, the city left operating members of the SBA and other operators with no real lawful path forward, and so we’ve had to take this beyond a policy disagreement to a constitutional disagreement where we believe the Illinois law is very, very clear: Only the state licenses and taxes online sports wagering companies. 

We’re waiting on the General Assembly potentially to say otherwise, but until then we’re gonna have to continue to pursue this in court. 

Gambling Insider: In your new role, what does success look like? If we’re talking in January of next year, what makes you look back and say, ‘I’ve done a good job so far’?

Maloney: Success is 100% gonna be tied to our efforts to increase the number of jurisdictions that legalize sports wagering and legalize gaming. Period, full stop. I’ve come in under the leadership of our chairman, Jeremy Kudon, the terrific team that he’s built, and our SBA member companies to move forward legalization and ultimately, the measure of success for the SBA will be continued legalization efforts. 

[Another] important objective is to continue to defend the industry from potential market restrictions and higher taxation levels. We’ve got to continue to communicate the benefits of legal regulated markets that promote that growth and innovation. 

Success will also be judged on our ability to communicate and continue to evangelize the benefits of online sports wagering and iGaming, and the commitments of our operators to responsible gaming and to integrity as well. 

We’ve got to also be able to confront some of the difficult national narrative right now on that discussion. … 

Hopefully a year from now we’re looking at more American adults with the opportunity to participate in [legal online gambling].”

Gambling Insider: Do you enjoy betting on sports yourself? 

Maloney: I do. I bet on football mainly.

Gambing Insider: College, pro, both?

Maloney: Both.

Gambling Insider: What do you like to play? Straight bets, parlays, in-game? 

Maloney: Straight bets, and I am a fade-the-public bettor. I had a wonderful regular season, and I don’t think I bet correctly on a game in two weeks. 

Gambling Insider: I’m guessing you’re a Commanders fan. What’s your outlook for next season or the next couple of seasons?

Maloney: I think we will be division winners three out of the next five years. 

Gambling Insider: Wow, that’s a bold prediction. 

Maloney: The era of Jayden Daniels here, and if he’s healthy, we will go very, very far. 

More from our chat: We spoke with Joe last Thursday, before the Divisional Round of the NFL Playoffs. Asked for his Super Bowl prediction, Joe offered Bills and Seahawks.

He was born and raised a Patriots fan in Holyoke, Mass., but living in the DC area and having worked for the team there, he now roots for the Commanders.

“If anyone from my hometown reads this, they will be so upset that I didn’t pick the Patriots,” he said. “But Drake Maye’s time will come.”

The Patriots face the Denver Broncos for the AFC Championship on Sunday.

This interview has been edited for clarity and brevity.