DraftKings Drops Oregon DFS, Works On Sports Betting Deal

DraftKings Drops Oregon DFS, Works On Sports Betting Deal
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DraftKings has been in discussions to take over the so-called “single-source” sports wagering operation in Oregon, a state where sports betting handle has been far lower than other similarly sized states that also have sports betting. In an associated move, DraftKings DFS is now dropping its real-money contests in the state.

For gambling In Oregon, the state lottery has operated sports wagering under an app with the brand name “Scoreboard” in conjunction with SBTech, a Bulgaria-based technology-sports wagering firm that has been merged into DraftKings as a result of the Boston-based gaming company’s combination with SPAC Diamond Eagle last year. The idea would be for the Scoreboard app to “transition” to the DraftKings sports betting platform, according to a DraftKings announcement.

As part of the DraftKings-Oregon Lottery discussions, DraftKings is ceasing its DFS operation in Oregon, an obvious concession to state authorities. Daily fantasy sports, as a contest activity, resides in what some call a “gray“ legal area, meaning that the legality of DFS has been debated yet some DFS companies have opted to continue to operate there without a clear prohibition.

DraftKings has been one of the DFS companies that has operated in Oregon — until it opted to drop DFS as it pursued the presumably more lucrative sports gambling partnership (note: DraftKings said it still “respectfully disagree(s)” with the state’s DFS position). Meanwhile, rival FanDuel DFS announced on Twitter that it will continue to serve Oregon DFS customers.

Some would argue that the Oregon Lottery certainly needs some help, if the goal is to actually attract substantial online sports betting handle and consequently, provide funding to the Public Employees Retirement System.

In June, Oregon with an overall population of about 4.2 million people and with its single-source sports wagering approach attracted sports betting handle of about $25 million. There are some limitations on sports that are eligible for betting in Oregon; for instance, the lottery app doesn’t allow for betting on college sports.

Iowa & Colorado Have Higher Handles

Two active sports wagering states bracket Oregon (No. 27) in population: Iowa (No. 32) on the low side, and Colorado (No. 21) on the high side.

In June, Iowa sports betting — which has about a million fewer people than Oregon (Iowa’s population is 3.2 million) but in contrast to Oregon has multiple sports wagering operators — saw a sports wagering handle of $111.2 million, more than four times Oregon.

Colorado sports betting for May (latest month available), which has a population of 5.8 million (about 38% greater than Oregon) and also has multiple operators, the sports wagering handle was $249 million, just about 10 times that of Oregon.

Room for Improvement in Oregon

It’s a reasonable assumption that DraftKings believes it can improve Oregon’s sports wagering activity, and DraftKings was clear in admitting that it was willing to abandon real-money DFS to improve its chances at the lottery partnership.

There has been some social media lamenting from DraftKings DFS customers as the announcement became more widely publicized. The shutdown occurred at 7 a.m. PT, July 26. DraftKings assured customers they can withdraw money on deposit and also play some free contests.

Regarding accumulated customer perks and contests-in-progress, DraftKings informed its customers by email of the following:

“DraftKings will be exchanging the following items for cash at 11 a.m. ET/ 8 a.m. PT on Wednesday, July 28, 2021, based on the plan below:

  1. DraftKings will convert Crowns, Contest Tickets, and DK Dollars in your account to the equivalent of real cash that can be withdrawn, as follows: DK Dollars are equivalent to $1 to $1 cash, Crowns are 550 Crowns to $1 cash, Contest Tickets are $1 to $1 cash
  2. DraftKings will award the cash value of any Ironman Achievement payouts to any player who was tracking to hit an Ironman Achievement (based on ratios in 1, above). For example, 25,000 Crowns would be paid out as $45.46 cash
  3. DraftKings will award the cash value of the remaining July Daily Rewards previously earned and the cash value of any August Daily Rewards earned by 10 a.m. ET/ 7 a.m. PT, Monday, July 26, 2021 (based on ratios in 1, above). For example, $10 in tickets, 5,500 in Crowns and $20 in DK Dollars would be paid out as $40 cash.
  4. Any entry fees for fantasy sports contests that start at or after, or continue past, 10 a.m. ET/ 7 a.m. PT on July 26 will be refunded. Including all previously drafted Best Ball entries.”