{"id":25,"date":"2018-02-24T14:46:55","date_gmt":"2018-02-24T14:46:55","guid":{"rendered":"https:\/\/njsportsbookinfo.com\/?p=25"},"modified":"2018-06-20T00:05:53","modified_gmt":"2018-06-20T00:05:53","slug":"from-fantasy-to-reality-implications-of-legalized-sports-betting-for-daily-fantasy-operators","status":"publish","type":"post","link":"https:\/\/njsportsbookinfo.com\/index.php\/2018\/02\/24\/from-fantasy-to-reality-implications-of-legalized-sports-betting-for-daily-fantasy-operators\/","title":{"rendered":"From fantasy to reality: Implications of legalized sports betting for daily fantasy operators"},"content":{"rendered":"

Since daily fantasy sports (DFS) exploded onto the scene in 2015, operators like DraftKings and FanDuel have enjoyed a near monopoly of the action space outside of Nevada. However, with the Supreme Court seemingly poised to pave the way for legalized sports betting in New Jersey — <\/span>and potentially as many as 18 other states<\/span><\/a> — <\/span>the U.S. gaming market is staring the reality of widespread sports betting square in the eye<\/b>. So what are the implications for the DFS titans? \u00a0<\/span><\/p>\n

First and foremost, they will need to deftly pivot their official stance on sports betting, <\/span>a process they have already set in motion<\/span><\/a>. Of course, due to <\/span>the inescapable irony that their very existence<\/span><\/a> was spawned by a piece of ANTI-gambling legislation<\/b>, DFS operators have always maintained that they do not run gambling sites and therefore should not be lumped in with the sports betting industry. But let\u2019s not mince words: that was a measure of self-preservation aimed at helping them keep their distance from precisely the types of operations the <\/span>Unlawful Internet Gambling Enforcement Act of 2006<\/span><\/a> sought to curtail. <\/span><\/p>\n

Yes, <\/span>any sort of association to the dark and seedy world of sports betting would have not just represented poor brand management, but a brazen middle finger to the Feds <\/b>that surely would have invited even more scrutiny than DFS operators already faced. A Supreme Court ruling in favor of New Jersey will go a long way toward eradicating that pesky conflict of interest.<\/span><\/p>\n

That\u2019s the PR side, but what about the business angle?<\/b><\/h2>\n

If DraftKings and FanDuel, <\/span>which are already dealing with stagnating growth<\/span><\/a>, don\u2019t want to lose a chunk of their market share to sports betting — or at a minimum, see their revenues significantly diluted on account of their user base earmarking a portion of its DFS bankroll for sports betting — <\/span>they will need to commit even more resources to an exploration of the space<\/b>. <\/span><\/p>\n

On an institutional level, that will entail convincing New Jersey gaming licensees and state lawmakers — <\/span>who will be tasked with implementing and rolling out sports betting<\/span><\/a> — that it\u2019s in their interest to give DFS operators a piece of the action. <\/span>Both DraftKings and FanDuel can present compelling cases; each boasts a massive user base and a strong presence in New Jersey.<\/b> And since they\u2019ve surely been anticipating the eventuality of legalized sports betting for some time, they figure to have ideas for new types of sports wagering options that New Jersey gaming operators may not have considered.<\/span><\/p>\n

Make no mistake: This will require significant lobbying efforts on the parts of the DFS giants, as the empowered interests in New Jersey <\/span>will no doubt aim to prioritize their own casino and racetrack operators<\/span><\/a> when it comes to <\/span>getting the industry off the ground<\/span><\/a> and fostering its growth. In order for DraftKings and FanDuel to avoid being relegated to the sidelines, they will have to either 1) seek a partnership with an existing gaming licensee; or 2) allocate resources to lobbying for the rapid adoption of an online sports betting model.<\/span><\/p>\n

Both options present potential pitfalls and benefits. Partnering with a casino or racetrack would mean embracing the optics of suddenly being folded in to a brick-and-mortar sportsbook, as well as agreeing to revenue sharing. But it would also represent a unique and tangible brand extension for a DFS company. <\/span><\/p>\n

As for <\/span>online sports betting<\/span><\/a>, that is surely where the industry is headed — New Jersey is one of three states to have already adopted online gambling, while mobile sports betting in Nevada and Europe <\/span>has grown exponentially since its introduction<\/span><\/a> — but it\u2019s unlikely New Jersey will be in a rush to introduce it at scale. The onus would therefore be on the DFS operators to successfully lobby gaming licensees and lawmakers in order to accelerate that process.<\/span><\/p>\n

The online route is probably the most viable — and ultimately lucrative — for DraftKings and FanDuel, but it would also likely be the most labor intensive. In addition to the anticipated lobbying efforts that would be necessary, becoming bookmakers would represent a new frontier on the business side for DFS operators. <\/span><\/p>\n

What\u2019s the next step for DraftKings and FanDuel in advance of the Supreme Court decision?<\/b><\/h2>\n

Very few outside the bookmaking industry are versed in its core competencies<\/b> — from setting opening lines to moving numbers, adjusting juice, diagnosing sharp money, identifying scalpers, forecasting parlay liability etc. — <\/span>which is to say<\/b> a highly specific skill set will be thrust into demand once New Jersey wins its case.<\/b> But will enough of a market exist for DFS operators to sufficiently staff what is essentially an entirely new domain of their operation? <\/span><\/p>\n

It\u2019s safe to say DraftKings and FanDuel are already entertaining those potential staffing demands — whether through training current analysts and managers in the basics of bookmaking, or by looking to secure the services of industry professionals based in Nevada or offshore —\u00a0<\/span>but it\u2019s tough to know exactly how much firepower they are committing to the space. \u00a0<\/span><\/p>\n

The element of the unknown is certainly part of the allure of this uncharted territory New Jersey finds itself on the verge of pioneering. No matter how you slice it, though, these are at once anxious and exciting times in the sports betting world — particularly for DFS operators.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Since daily fantasy sports (DFS) exploded onto the scene in 2015, operators like DraftKings and FanDuel have enjoyed a near monopoly of the action space outside of Nevada. However, with the Supreme Court seemingly poised<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,34,37],"tags":[8,6,7,4,2,5],"class_list":["post-25","post","type-post","status-publish","format-standard","hentry","category-daily-fantasy","category-market-analysis","category-new-jersey-sports-betting","tag-daily-fantasy","tag-draftkings","tag-fanduel","tag-new-jersey","tag-sports-betting","tag-sportsbooks"],"_links":{"self":[{"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/posts\/25","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/comments?post=25"}],"version-history":[{"count":9,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/posts\/25\/revisions"}],"predecessor-version":[{"id":41,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/posts\/25\/revisions\/41"}],"wp:attachment":[{"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/media?parent=25"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/categories?post=25"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/njsportsbookinfo.com\/index.php\/wp-json\/wp\/v2\/tags?post=25"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}