On June 5, Delaware became the first state to take advantage of a Supreme Court ruling that legalized sports betting outside of Nevada. Loyal readers of this blog will remember that in May, we gave you a primer to that ruling, painting its effects on the landscape as a whole. For those new to the blog, you can access the story here.
In that post, we outlined DraftKings’ metamorphosis from Daily Fantasy Sports (DFS) site to a major player within the world of sports betting, and are actively pursuing this expansion. The rise of a new company has firmly established itself as a new challenger to the throne of legal sports betting since that post as well. Those who are familiar with betting on European sports know the name Paddy Power, who merged with online casino service Betfair in September 2015. Under the name of Paddy Power Betfair (PPB), the Ireland-based sportsbook acquired DFS site DRAFT in May of this year.
The purchase of DRAFT is not the only action that PPB is taking to challenge DraftKings. After the Supreme Court ruling to legalize sports gambling, PPB announced that they were merging their US group with DFS site FanDuel. Football fans and viewers of cult comedy The League are familiar with FanDuel. They are nipping at the heels of DraftKings, offering a comparable platform. This new partnership is mutually beneficial. Despite a user base of 7 million accounts, FanDuel was roughly $76 million in debt. After the merger, both FanDuel and PPB will essentially break even, a huge gain and financial windfall for FanDuel.
Both companies have fired opening salvos in this war for the lion’s share of what appears to be the first battleground in New Jersey. The war, however, will remain up for grabs. DraftKings just recently opened office buildings in New Jersey, and as on June 1 announced that the will partner with Resorts Atlantic City to establish a sportsbook under the casino’s gaming license. In addition, they are hiring new staff exclusively for sports betting, and is already advertising the book on billboards in both Atlantic City and the Newark airport. Not to be outdone, PPB/FanDuel have created partnerships of their own. On June 8, Betfair US – a subsidiary of PPB – announced that it was bringing mobile and online betting to two racetracks. One of these tracks is part of the Meadowlands complex in East Rutherford, N.J. a complex that houses MetLife stadium, the home of the New York Giants and New York Jets. The location of this sportsbook has tremendous potential in foot traffic and revenue.
So now, the race is on. The merger between PPB and FanDuel is expected to come in the third quarter of this year, and Betfair US says that the Meadowlands sportsbook could arrive as early as mid-July. A bill to secure structures around sportsbetting was approved by both the NJ Assembly and Senate on June 7, and signed by the Governor on June 11. The first legal sports bet in New Jersey is scheduled to be placed on June 14 at the Monmouth Park racetrack. New Jersey was a key factor in the establishment of legal sports betting. Now, it appears that it will represent a stronghold for one of two entities to become a leader of an unprecedented era in sports.
What state will be next? Which entity will thrive? We’re not sure who we are betting on yet, but we certainly look forward to exploring this landscape further.
-Matt Mellinger, Communications Coordinator
