The biggest operator of online sports betting sites in the United States says it will deliver significant benefits to Massachusetts bettors and the state’s bottom line if granted a mobile wagering license, which it is on track to obtain.
Representatives from FanDuel Group spent Monday making their case to the regulator of sports betting in Massachusetts for one of the seven standalone permits for online wagering.
After a closed-door, “executive” session in the afternoon, members of the Massachusetts Gaming Commission (MGC) found the operator had met expectations for the license, albeit with some requests for supplemental information.
Monday’s work by the MGC puts FanDuel in line to receive another approval later this month to offer legal sports betting in the commonwealth. Given the start of mobile event wagering in Massachusetts is slated for March, FanDuel is poised to launch on the first possible day in the New England state.
A big vision
FanDuel President Christian Genetski told commissioners on Monday that their product, customer acquisition and retention capabilities, and database — including more than 350,000 users of the company's fantasy sports and horse-racing sites in Massachusetts — position them to bring the most benefit to the state of any potential online operator.
FanDuel has become the leader in market share in the U.S. sports-betting industry, generating more than 40% of gross gaming revenue during the three months that ended September 30, according to its parent company, Dublin-based Flutter Entertainment PLC. It also holds that pole position in states near Massachusetts, such as New York and Connecticut, Genetski noted.
“Our leadership position gives us a scale advantage that will allow us to invest more in product, promotions, and brand to grow the market in the commonwealth and ensure that the commonwealth market reaches its full potential,” Genetski said. “We've demonstrated this ability to grow state markets and generate a material portion of sports-betting tax revenue across the country.”
FanDuel was responsible for 47% of all tax revenue generated by online sportsbooks in the states in which it operated in the first six months of last year, according to Genetski.
Moreover, FanDuel's chief financial officer, David Jennings, said they expect to generate more than $200 million in tax revenue for Massachusetts in the first five years of operation there. FanDuel anticipates spending more than $50 million on local media within the first five years of operation in Massachusetts as well, Jennings said.
"As we've seen elsewhere, this level of investment prompts competitors to invest heavily also, leading to a thriving and competitive market," he added.
Taking the long view
The comments from FanDuel suggest the operator feels confident about its prospects in Massachusetts, even without a brick-and-mortar casino partner like some of its rivals. Those competitors may be able to establish some connection with customers that come into the casinos to place sports bets when retail wagering begins at the end of January.
But FanDuel is applying for one of seven “untethered” licenses for mobile sports betting available in the state, rather than one of the eight permits that are “tethered” to casino, racetrack, and OTB operators. The operator claims it is eyeing a longer game that doesn’t revolve around an earlier-mover advantage some others may enjoy.
“We're focused on the long term,” Genetski said. “We're committed to building a sustainable, long-term business and in turn, a long-term, sustainable market in Massachusetts.”
While the MGC looked favorably on FanDuel’s application on Monday, the operator will be subjected to a group evaluation next week as part of the unique nature of the application process for standalone licenses.
The others applying for the standalone licenses are companies connected to Bally Bet (which has also been found by the MGC to meet expectations), Betr, DraftKings, Betway, and PointsBet.
Barstool Sportsbook, Caesars Sportsbook, BetMGM, WynnBET have already earned approvals as part of the "tethered" application process.
