DraftKings Launches Sportsbook in New Jersey
On Wednesday, daily fantasy sports juggernaut DraftKings officially launched their mobile betting sportsbook. The online and mobile app called “DraftKings Sportsbook” has launched on an invitation-only basis, but users may only place wagers using the app if they are physically located in the state of New Jersey.
Users will have a chance to gain access to the sportsbook by registering on the normal DraftKings website. The project, which has reportedly been in the works for over a year, comes shortly after the U.S. Supreme Court’s ruling that the federal ban on sports gambling in the United State was unconstitutional.
The SCOTUS ruling upheld a New Jersey law installed in 2014 that allowed sports betting at the state’s land-based casinos and race tracks. The suit pitted the state of New Jersey against 5 major American sports leagues, including Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League and the National Collegiate Athletic Association.
New Jersey became the first state to legalize and regulate sports gambling after the Supreme Court’s ruling came down. Since then, others have followed and more are expected to do so in the years to come.
Both DraftKings and rival FanDuel almost immediately announced plans to try and capitalize on the ruling by opening sportsbooks of their own. Both sites plan to have their books open to users by the time football season gets underway in September.
DraftKings and FanDuel were once on the verge of a merger before the agreement was scuttled in court. Shortly thereafter FanDuel was acquired by U.K.-based giant Paddy Power Betfair. Paddy Power Betfair reportedly put nearly $160 million into FanDuel’s business operation, which included helping the site pay down nearly $80 million worth of debt.
While the DraftKings app is currently only available to users in New Jersey, expansion is coming. Neighboring New York will likely be one of the next states to finalize rules when it comes to the legalization and regulation of sports wagering.
Interestingly enough, both DraftKings and FanDuel will be eagerly dipping their toes into the sports gambling marketplace after arguing for years that their fantasy sports-for-money product was more skill-based than traditional gambling. The illegal sports betting industry generates about $150 billion on an annual basis, so it’s easy to see why companies are excited to get in on the ground floor now that sports gambling is set to become widely legal.
Dan Hannigan-Daley, who has been in charge of the DraftKings Sportsbook project, told fortune that research indicates that about 75 percent of the site’s users already gamble on sports in some capacity or another. As a result, the site’s brass believes that their sportsbook will be a rousing success among those that already populate their fantasy sports product.
While New Jersey has been quick to embrace sports betting with open arms, other states have been slower when it comes to rolling things out. Rhode Island legalized sports betting in June, but bettors are not expected to be able to place bets legally until October and the law has no provisions as of yet regarding online or mobile betting.
New Jersey’s law says that mobile providers such as DraftKings must operate through casinos and racetracks within the state’s borders that already have land-based sportsbook operations. DraftKings does not own their own casino property, but they have partnered with the Resorts Casino Hotel in Atlantic City, which is owned by Mohegan Gaming & Entertainment. New Jersey’s Department of Gaming Enforcement gave DraftKings the green light for its soft launch period ahead of the full-scale launch expected later in the year.
FanDuel has a land-based partner at Meadowlands Racetrack in New Jersey, but the site has not yet launched its sportsbook operation.
Existing DraftKings users will not have to create a new account, they can simply use the account they already use to participate in the site’s daily fantasy product.
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