New Hampshire Sports Betting Launches, But Consumers Lose

New Hampshire Sports Betting Launches, But Consumers Lose
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New Hampshire talks a good motto. But “Live Free or Die” was obviously not taken much into account when state regulators finalized plans that led to the opening of legal sports betting in the state on Monday.

What New Hampshire began with on Monday was a DraftKings monopoly. And that is not good for the consumers who are supposed to support and benefit from sports betting.

More choices mean more interest and more money for everyone.

One gaming industry insider described the single-source system to as "borderline communism. State-run wagering.” Live free or die, indeed.

This is a bad idea already in practice in Rhode Island and Delaware, where sports betting is also under the auspices of the lottery.

New Hampshire Lottery Commission guidelines allow for up to 10 retail sportsbooks and five online providers to maintain an industry the state projects will generate $7.5 million for education in fiscal year 2021 and $13.5 million in 2023. Instead of five online providers, New Hampshire went with one.

From New Hampshire’s perspective, revenue will almost certainly not be realized, which is imperative given that legislators are mandated to land the best deal possible to fund education.

And from the consumer’s perspective, lack of legal, regulated choice will send existing bettors willing to give this new market a try back to illegal bookies and offshore websites if dissatisfied.

DraftKings Offer Entices New Hampshire

This is not to discount or criticize DraftKings, which won the right to take the first legal bets in New Hampshire by obliterating other suitors’ proposals to join them. The Boston-based company will maintain the right to offer mobile betting and oversee retail sportsbooks until 2026.

It got a good deal in a busy and heady period of growth. The company is now live with a mobile platform in five states and has global plans, according to CEO Jason Robins, after announcing last week a merger with SB Technology and a move to go public. It has staked out a sizeable market share in the highly competitive New Jersey market, followed suit in Pennsylvania and is leading the way in Indiana.

It knows what it’s doing, provides the comfort of name recognition for residents and regulators in a state that doesn’t have a casino. It graded out best in a study the state conducted of potential new partners, well ahead of other national brands, including rival FanDuel, which was only considered for mobile.

Not surprisingly, DraftKings’ ability to roll out ahead of its competition — retail sports betting won’t debut for months — was a perk for the state. As was the fact that the company dangled the best financial package in paying the lottery 51% of gross gaming revenue from mobile and 50% from future retail, percentages that reduce dramatically if other operators are allowed into competition with it.

In essence, DraftKings leveraged its might to negotiate a monopoly. And that’s the shame of it for New Hampshire sports bettors.

DraftKings will certainly bring a solid product, but won’t have to compete on promotions, user experience, customer service, and most importantly, the pricing of lines. The 1.4 million residents of New Hampshire would feel absolutely fawned over if the likes of a FanDuel also offered bets in the state.

New Hampshire Takes Sports Bettors for Granted

The Division of Sports Betting was so close there, for a while. A competitive bid process yielded one of the nation’s top mobile sportsbook platforms at a remarkable fee.

Certainly Gov. Chris Sununu was eager to roll sports betting out ahead of the New England Patriots’ next playoff foray as estimates of a possible launch moved from March Madness to January in a short span. But commencing with one operator creates a situation like in too many states not named New Jersey, where there is immediately something to fix.

Will New Hampshire want to fix it? If one more operator is allowed to compete with DraftKings, the state’s take from gross gaming revenue dips to 21%. If it allows in four, the figure shrinks to 16%.

But Sununu hit his deadline and on Monday placed his $82 wager on the Patriots to win the Super Bowl using the only lines anyone could legally offer him. He seemed happy enough about it.

But he seems comfortable with bad bets.

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