DraftKings To Become Legal Sportsbook If PASPA Is Lifted? CEO Says ‘Maybe’
DraftKings CEO Jason Robins recently suggested in an interview with Bloomberg that the daily fantasy operator would consider adding sports betting to its product portfolio.
This little gem came while Robins was at the Web Summit in Portugal announcing that DraftKings is set to begin live streaming EuroLeague games on their platform.
The EuroLeague live streams, which are set to begin this winter, are meant to serve as a springboard to attract other professional leagues to partner with the daily fantasy operator. DraftKings will show one free game per week, offering users that enter contests that cost at least $3 additional broadcasting options.
Hurdles In Blurring Lines Between DFS & Sports Betting
With Robins suggesting that changes to the DraftKings business model could be on the horizon in lieu of legalized sports betting, we wonder how the company would transition.
Daily fantasy sports operators have consistently fought to be excluded from the definition of gambling, which is why they have been successful with legalization in several states.
In states that have written specific legal exemptions for daily fantasy sports, it is hard to speculate how they would handle a DFS operator that also offered sports betting.
Even in states that would consider legalizing sports betting, there is no guarantee that their approval would be outside of the land-based realm. An all-in-one DFS and sports betting site may not be permitted in states that do not have regulated online gambling.
There are also potential pitfalls with the sports leagues, who have overall been resistant to regulated sports betting. The NFL, NBA, MLB, and NHL all have partnerships with fantasy sports sites, some of which are major investors. NBA Commissioner Adam Silver may be supportive regulating the inevitable, but having actual ownership in a sportsbook is another issue entirely.
Current State Of Sports Betting In The US
Though DraftKings is not the only DFS operator that would naturally have an interest in becoming a sportsbook, there can be no forward motion until the Supreme Court rules on the NJ sports betting case.
The Christie v. NCAA case is built upon New Jersey’s claim that the Professional and Amateur Sports Protection Act of 1992 (PASPA) is unconstitutional. PASPA effectively prohibited sports betting in the United States, with the exception of Nevada for single-game wagering.
Many states have already put preemptive laws on their books should the federal sports ban be lifted. There is no doubt that change is coming to the US sports betting market, and regulation would undoubtedly benefit sports bettors, state revenues, and DFS operators.
DraftKings, in particular, has had a bevy of financial struggles, at one point attempting to merge with FanDuel. Robins’ company reported an operating loss of $509 million two years ago, though 2016 saw the operator with a more comfortable $160 million to $92 million profit/loss ratio.
This year, Nevada had a $557.4 million handle with $44.4 million in revenue during the month of September alone. At this rate, Nevada is slated to top the $219.2 mill sports betting revenue it made last year. It is no wonder that DraftKings and other daily fantasy sites are anxiously awaiting their opportunity to get in on a piece of the proverbial pie in the other sports betting states.