DraftKings—a daily fantasy sports company—has announced its plans to offer a sportsbook in New Jersey before the state moves to legalize sports betting.
One of the biggest daily fantasy sports contest providers in the United States has announced their plans to offer sports betting in New Jersey.
A DraftKings sportsbook is in the works after the fantasy sports company signed a partnership deal with NJ-based Resorts Casino Hotel to offer online sports betting service in the future, once the state legalizes sports betting.
DraftKings is just one of the many betting organizations rushing to get into the growing US sports betting scene, after the US Supreme Court (SCOTUS) repealed an act banning sports-related betting in the country. The state of New Jersey is set to approve a bill regulating sports betting in early June.
Jason Robins, DraftKings CEO, said:
“It’s a new thing, so people are trying to see how they want to go about it, who they want to partner with. Anytime you’ve got a big market about to be created, there’s so much opportunity out there that everyone should benefit, as long as you do it the right way.”
DraftKings is planning to offer traditional and in-game betting—together with its usual weekly and daily fantasy sports contests—accessible through mobile applications and web-based platforms. However, the specifics of the sportsbook are yet to be disclosed.
Morris Bailey, owner of Resorts Casino Hotel, added:
“We are at a pivotal moment in the development of sports betting in the US. We are delighted to be able to have DraftKings utilize our gaming license in New Jersey. [Today’s] announcement is the first step in being able to offer customers in New Jersey the most dynamic sports betting platform.”
DraftKings, a Boston-based gaming company founded in 2011, currently holds gaming licenses from Malta Gaming Authority and UK Gambling Commission. The deal with Resorts Casino suggests that DraftKings is applying to be licensed by the state of New Jersey.
Sportsbooks to Join the Party
The SCOTUS earlier this May declared the Professional and Amateur Sports Protection Act (PASPA)—the act outlawing states from sponsoring, operating, licensing, or authorizing betting on competitive sports—as unconstitutional, paving the way for states to legalize sports betting in their respective jurisdictions.
Samuel Amlito, a Justice of the SCOTUS, wrote:
“The legalization of sports gambling requires an important policy choice, but the choice is not [the SCOTUS’s] to make. Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”
The state of New Jersey is vocal with its plans to legalize sports betting. In fact, the state was the one who challenged the constitutionality of PASPA. Therefore, it is logical for betting companies like DraftKings to enter the imminent US sports betting market by setting up shop in the Atlantic City.
Churchill Downs, the host of the annual Kentucky Derby, has already signed a deal with Golden Nugget Atlantic City. British bookmakers William Hill will offer sports betting at racetrack Monmouth Park. Borgata Hotel will also welcome sports punters in the future.
Sports Leagues to Spoil the Fun
While betting organizations are scrambling to get a piece of the once-illegal sports betting market, the sports leagues are also fighting for their own slice.
The National Basketball Association (NBA) and the Major League Baseball (MLB)—two of the biggest leagues in North American sports—have asked legislators for a one percent cut of all bets made on their sports, calling it the integrity fee.
While states are not impressed with that idea, the leagues argue that the integrity fee—apart from being a royalty fee—is an important insurance to prevent their games from being corrupted and their integrity from being damaged.
Dan Spillane, NBA general counsel, said:
“Sports betting is built on our games. If something goes wrong, if there’s… something that tarnishes the image of the game, that’s going to be a cost borne by the sports leagues, and less of a cost borne by the operators that offer sports bets.”
Casinos and bookmakers have expressed their displeasure over the leagues’ proposal. According to these operators, sportsbooks do not make a lot of money, and the integrity fee would cut their profits even smaller.
Dan Shapiro, vice president of strategy and business development for William Hill, said:
“This is a low-margin business. Any other taxes or fees would make it difficult for legal bookmakers to price the product competitively.”
Resorts Casino’s Bailey added:
“[The integrity fee] is totally inappropriate. It’s the height of hypocrisy to take the position they did.”
It will take some time—after a series of state legislations and tax regulations—before punters and operators see how the potential US sports betting industry will materialize.