DraftKings & FanDuel To Offer Sports Betting Services
Last week, the United States Supreme Court struck down a law that forbade states from legalizing and regulating gambling on sporting events. The SCOTUS upheld the legality of a 2014 New Jersey law that permitted wagering on sporting events at casinos and racetracks. It also voided the Professional and Amateur Sports Protection Act (PASPA), which was passed in 1992 in order to effectively ban sports betting on a federal level.
Now, states will be able to decide individually whether to offer sports betting, as is currently the case in Nevada. As of now, Nevada is the only state in the country in which sports betting is legal everywhere.
As you may have expected, some companies are wasting no time in jumping at the opportunity to take advantage of the new ruling. Almost immediately after the ruling came down, daily fantasy sports giants DraftKings and FanDuel individually announced that they plan to launch their own sports betting products some time in the near future.
In an interview with CNBC, DraftKings CEO Jason Robins said,
“This [sports gambling] is going to be a huge industry, and there will be a lot of competition, which is great for consumers.”
The subject of daily fantasy sports has been a touchy one in terms of legality for years, though most states currently allow consumers to play DFS for money. While the sites have insisted that daily fantasy sports does not constitute gambling, the fact that both DK and FD were so quick to offer sports betting products sure does make it look somewhat dicey. Providers have made the argument that building a winning DFS lineup is more skill-based than chance-based, which separates it from straight-up sports betting.
Sports betting in Nevada is a monstrous industry. Wagerers placed nearly $5 billion worth of bets in the state in 2017, which set a new single-year record. The industry is only getting bigger, and it’s set to explode now that it is on the verge of being legalized in a number of states.
Bradley Tusk, an investor in FanDuel, told ESPN that the value of their product doubled almost instantly after the SCOTUS ruling came down. Once betting starts to be legalized in more states, the value of providers will almost surely continue to grow.
Robins added that he believes legalizing sports betting – which is already a massive offshore industry – will prove beneficial to the U.S. He said,
“It’s really kind of a ridiculous notion that [the government thinks] that a product that you know people are currently partaking in online through illegal offshore black market websites and mobile apps, that you are going to eradicate that by only allowing it in certain offline places. I think the real goal is to take something that’s an unregulated black market activity and bring it to the light, and you have to have mobile online to do that the right way.”
On Tuesday, DraftKings shed some light on some of the features of its upcoming sports book. DraftKings is giving people the chance to sign up to an email newsletter that will offer state-by-state information on the potential legalization and regulation of sports betting. DK also plans to offer a multitude of betting options, including spread bets, moneyline bets and total bets, among others. Prop bets would also seem to be a natural addition to the site’s sportsbook package.
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