Mission Impossible? PropMe Wants To Change The WV Online Sports Betting Market

At present, the extent of permissible online sports betting in West Virginia is limited to the offerings of the three licensed sports betting apps in the state. However, the PropMe sports betting app aspires to bring innovation to this domain, although it requires assistance to achieve this goal.

In order to achieve their objectives, PropMe, a mobile sportsbook concept, requires some adjustments from the WV Legislature. This concept emphasizes prop bets and a robust social aspect.

What is PropMe and how would it change sports betting in WV?

David Ealy, an entrepreneur from West Virginia and co-founder of the company, elaborates on the distinctiveness he finds in the online gambling products his company intends to provide.

The year was 2016 when a group of individuals gathered at a college baseball playoff game. Engaged in friendly competition, we attempted to place bets on each pitch, but to our surprise, we couldn’t find an app that facilitated such wagers. Frustrated by this simple problem, we decided to tackle it ourselves by establishing the [company]. Thus, we introduced PropMe, a peer-to-peer marketplace, which became the inspiration behind our company name.

However, the number and variety of prop bets available could potentially be the most distinctive feature of the platform.

Ealy explained, “We like to think of ourselves as experts in props. Our app has been available on the Apple and Play Store for quite a while. However, we currently lack the necessary payment and registration systems, as well as the ability to make payouts. Despite these limitations, Apple and Play Stores have allowed our app to be listed. It’s been running for two years now, and it’s incredibly thrilling because we offer unique and playful props.”

PropMe offers an additional distinctive feature for West Virginia establishments such as bars and restaurants, enabling them to establish partnerships. According to Ealy, this collaboration is based on a straightforward cross-promotional agreement.

The WV Lottery already governs the activities of bars and restaurants, so our mobile platform offers them a special feature on our menu. This feature allows them to promote our contests and prop bets without requiring any physical presence in their establishments.

Despite attracting attention from prominent figures in the state, the unique nature of the platform has not yet resulted in ultimate success.

Regulatory setbacks in taking PropMe to its zenith

PropMe encountered several regulatory obstacles while attempting to bring its product to the market. Nevertheless, the company managed to gain the support of a formidable ally based in Charleston.

Online wagering is allowed in West Virginia law, but it is required to be conducted through a facility partner with a master license. This is how BetMGM WV Sportsbook, DraftKings WV Sportsbook, and FanDuel are able to legally accept online bets in the state.

The number of master licenses and skins issued by each master licensee in WV is limited by law. A maximum of five master licenses are allowed, which are distributed among the five WV casinos. Each master licensee is permitted to operate up to three skins, resulting in a total of 15 skins across the state.

According to Ealy, in order for a new WV sportsbook to obtain one of those skins, they must also obtain their own management services provider license from the WV Lottery. However, attempting to secure a skin with a facility partner and a license creates a frustrating cycle of circular logic for the company.

Ealy explained that the problem with the current process is that we are unable to secure commercial contracts with banks, payment gateways, ACH or credit card providers in order to obtain a license because we lack a skin. Without a skin, we are unable to acquire one of these four requirements. As a result, we find ourselves trapped in a continuous loop. The lottery advises us to acquire a skin, but we cannot do so without obtaining a license. Thus, we are caught in an endless cycle.

Earlier this year, WV Delegate Shawn Fluharty, a strong advocate for gambling expansion, attempted to address the issue of circular logic by proposing an adjustment to the state’s gambling laws. His proposal aimed to separate online sports betting from the reliance on physical gambling establishments in the state.

Fluharty supports a new WV sports betting option

During the previous legislative session, Fluharty made an attempt to garner support for a bill granting bars and restaurants in WV the opportunity to acquire management services provider licenses similar to those held by BetMGM, DraftKings, and FanDuel. Unfortunately, these efforts did not succeed.

Fluharty clarified that in the previous session, the bill was scheduled to be included in the Judiciary Committee agenda.

In nearly every state legislature, the introduction of a “gambling” bill sparks increased interest among various stakeholders. However, unfortunately, before we could gain significant momentum on the bill, the session came to an end. Nevertheless, the bill did manage to generate substantial discussion, which is a significant achievement in itself. When I initially pushed for the enactment of sports betting and iGaming legislation in West Virginia, it did not succeed during the first attempt.

With some adjustments to the approach, Fluharty is hopeful that similar legislation can be successfully passed in the upcoming session.

Ealy expressed their determination to strategize and confront the legislative aspect with great effort. As an illustration, in our initial endeavor, we initially excluded sportsbook operations, but now they have been included. We are planning to provide a comprehensive range of mobile gaming options, including games and user experiences that are not currently available in the market. In fact, I consider the setback we faced to be advantageous since it will ultimately make us stronger and enable us to offer a superior gaming experience for WV.

Despite facing several setbacks, the company managed to achieve a significant victory with the addition of Ted Arneault, a prominent West Virginia gaming executive and businessman, to their team.

Arneault’s investment ups the ante for PropMe in WV

Arneault’s investment in PropMe during mid-July goes beyond mere capital infusion, as he brings much more to the table for the company.

Arneault’s true worth might lie in his extensive network of connections. A notable example is his remarkable ability to secure massive amounts of funding, amounting to hundreds of millions of dollars, for his previous gambling projects. This achievement suggests that Arneault could potentially resolve PropMe’s banking challenges in West Virginia. Ealy elaborated on the valuable contributions Arneault brings to the table.

Having Ted on our team sends a strong message to potential license providers – we have both financial backing and competent leadership, which significantly reduces our risk profile. Furthermore, Ted’s extensive connections with lobbyists and expertise in navigating legislative processes adds further value to our team.

Despite the initial frustration, it seems that progress is being made for a legislative push in the upcoming fall to permit untethered licensing. It should be noted, though, that there are still influential entities within the West Virginia gambling industry that have not taken action on this matter.

A final possible ‘gatekeeper’ to consider moving forward

In addition to Arneault, Fluharty discussed another major interest involved in the expansion of gambling, which also possesses its own lobbying capabilities.

Fluharty stated that casinos in West Virginia have made significant investments and have been thriving. He emphasized that the intention was not to disregard their presence by introducing sports betting and iGaming. The importance of allowing the existing successful model in West Virginia to persist was acknowledged, as they were deemed most capable of excelling in this novel realm.

If the law is amended by the legislature to permit the lottery to issue licenses for online wagering without requiring a casino skin, it would significantly decrease the worth of those skins for West Virginia casinos. Moreover, BetMGM, DraftKings, and FanDuel may consider terminating their current agreements.

Because of this, casinos may utilize their lobbying efforts to resist this modification. Persuading lawmakers in their favor could involve convincing fellow legislators that the sports betting scene in WV must evolve to remain pertinent.

Fluharty further expressed, “In light of the current increase in market competition and the emergence of new prospects, I believe it is our responsibility to explore all possibilities and adapt accordingly.”

We do not want any barriers to entry when there is a demand for additional licenses in the market, especially if only three out of the available 15 licenses are currently being used.

This fall, the future of PropMe in West Virginia will be decided by lawmakers in Charleston. If Ealy and Fluharty have their say, the Mountain State could become home to some of the most cutting-edge prop betting markets in the country.