How Soon Will DraftKings And FanDuel Offer Bets In Nevada?
It’s not so much if it will occur, but when will the two most universally recognizable companies in American sports betting apply for licenses in Nevada, the country’s ancestral home of legal gambling.
FanDuel CEO Matt King confirmed as much when asked at the Global Gaming Expo in Las Vegas in October. He said returning to Nevada as a sports betting operator has been a goal since the company’s daily fantasy operation left the state nearly five years ago after an unfavorable ruling about its legality.
“Absolutely,” King said. “We want to go where our customers are. We know a lot of our customers travel here. We know a lot of our target audience lives here, and so we'd be excited to be back in Vegas one day.”
DraftKings CEO Jason Robins has likewise said he wants his company to offer bets in every state that legalizes.
“Nevada has a reputation as the gold standard for gaming regulation, and I think being licensed in Nevada is the gold standard,” said David Schwartz, former director of the Center for Gaming Research at UNLV. “So I definitely think it would be a big moment for both companies.”
Until then, Johnny Avello is a one-man operation, having remained in Las Vegas after joining DraftKings as director of sportsbook in October 2018.
“I'd be pretty excited about it,” Avello told Gambling.com. “The goal for us is to be everywhere, and you strategically plan where you're going to be. And of course, there were other obstacles at times, and you've got to be licensed in certain states and you have to have a plan on where you want to go.
“So, in due time, we want to be everywhere. We're exploring everything and eventually I think you'll see us land here also.”
DraftKings, FanDuel Had DFS Operations There
Central among those “other obstacles” was a 2015 decision by the Nevada Gaming Commission that determined that daily fantasy sports constituted gambling and required to be licensed as such in the state. DraftKings and FanDuel ceased operations in Nevada, however, and have yet to re-apply to offer sports betting even after both companies added wagering to its business model with the repeal of the Professional and Amateur Sports Protection Act in May 2018.
That’s why King spoke of coming back.
DraftKings and FanDuel are each taking bets via mobile, retail or in combination in sportsbooks in New Jersey, Indiana, Iowa, New York and West Virginia. DraftKings currently has Mississippi and New Hampshire to itself.
Neither company’s executives have made clear a timeline for applying for a sports betting or DFS license in Nevada. But their vigorous expansion plays in the second half of 2019 — the first full year when legal sports betting was a possibility in every state — would make a move in 2020 no surprise.
Also, October will mark the five-year anniversary of the decision that prompted their departure from Nevada. It would make for an end note to an eventful chapter for rivals that attempted to merge in 2017 before the Federal Trade Commission intervened.
Michael Lawton, a senior research analyst in the Administration Division of the Nevada Gaming Board confirmed to Gambling.com that neither company has applied for a gaming license.
There are a few puzzle pieces yet to fill in, King said.
“We've got a few new states that are in the queue,” he said at the G2E conference, “but our expectation is that over time, our plans will include Vegas. But no time has been set.”
The procedure for attaining a gaming license in Nevada is as follows:
- An application is filed with the Nevada Gaming Control Board.
- The license is assigned to investigators.
- A report is remanded to the NGCB.
- The board reviews the report, hears the matter in a public meeting, and makes a recommendation to the Nevada Gaming Commission.
- Two weeks later, the commission hears the matter in a public meeting and makes a final determination on whether to approve the application.
FanDuel Enters 2020 With Momentum
FanDuel Group in October became part of what would this year have been the largest gaming company in the world when its parent company, Flutter Entertainment, which also owns Paddy Power Betfair, announced a $12 billion all-share merger deal to acquire a majority stake in The Stars Group. FanDuel had been performing mightily without all the extra allies before making the latest consolidation play.
FanDuel has established itself as the top sports betting earner among sportsbooks in Pennsylvania and New Jersey, and reported a 67% revenue increase in the third quarter of 2019. The company claims 250,000 online sportsbook customers since launch.
“The third-quarter performance exceeded our expectations, with exceptional customer and revenue growth,” King said after the Q3 report.
DraftKings Expansion Includes Going Public
DraftKings has had an eventful push into 2020. It has established a dominant niche in the legal Chicago market through its Indiana sportsbook in Ameristar East Chicago, and in December announcing a merger with Diamond Eagle Acquisition Corp., and acquisition of SB Technology preceding a push to go public this year. The deal is expected to close in the first quarter of 2020 with the company trading on the Nasdaq. It has a $1.3 billion market cap.
Continuing a newsy trend, DraftKings renewed a partnership as the official sports betting and daily fantasy sports partner of the New York Knicks and Rangers and today had its NFL wild-card round fantasy tournament embroiled in collusion allegations involving two former reality show contestants.
Not Leaving Las Vegas
There would be symbolic value in gaining a license in Nevada for DraftKings and FanDuel. Once the lone depot of legal sports betting in the U.S., the state has been eclipsed on multiple occasions by the burgeoning betting market of New Jersey, but remains a powerhouse and a bastion of West Coast sports betting.
Companies such as William Hill and MGM already operate in multiple states including Nevada. But as mainstream brands through their daily fantasy backgrounds, DraftKings and FanDuel would represent the merging of a new sports betting culture with the establishment.
Schwartz believes the companies would fare well in Nevada. Exactly how the companies impact the more mature Nevada market could be a case study in the next generation of American betting culture. In Nevada, placing bets with ticket writers remains the norm for tourists, Schwartz said, but they would come in increasing numbers with DraftKings or FanDuel accounts from states where those companies operate.
“I think a lot of the local bettors definitely would be a lot more reliant on mobile and I think that as the funnel widens, with gamblers getting used to betting online in other states, I think you’ll see more people betting online in Nevada,” Schwartz said.
Schwartz said “good service, good interface, good core product, good lines” would determine whether the newcomers convert local bettors from their existing choice of sportsbook. And the almost complete absence of DFS in Nevada probably wouldn’t negate the impact of DraftKings’ and FanDuel’s brand-recognition, Schwartz said.
“Not necessarily,” he said. “I think they still have that name recognition. I think in Nevada, which is a very savvy market with a lot of very savvy players, I think it’s all going to come down to what kind of product they put out.”
That will become apparent. Eventually.
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