The Nevada Gaming Commission Thursday gave the okay for the FanDuel brand to launch in the state by the end of year.
The Commission voted 5-0 to allow FanDuel to extend its existing partnership with Boyd, which has a 4.5% ownership stake in the company, which is one of the largest sportsbooks operators in the nation. Outside of Nevada, FanDuel provides services to 12 Boyd sportsbooks across six states.
FanDuel and Boyd are redeveloping and rebranding the sportsbook at the Fremont Hotel & Casino in downtown Las Vegas under the FanDuel brand. No other properties are included.
Boyd will continue to operate the sportsbook with FanDuel providing information, advice, and support for setting odds and prices and risk management.
FanDuel attorney Erica Okerberg of Las Vegas firm Greenberg Traurig told the Commission that FanDuel has no plans to pursue operating a sportsbook in Nevada or offer its daily fantasy sports menu. FanDuel isn’t eligible for a sportsbook license, because it doesn’t have a brick-and-mortar location, she said.
In addition, FanDuel doesn’t plan to bring any technology into Nevada at this time. The Fremont uses the IGT platform, which will be updated to incorporate some FanDuel specifications, Okerberg said.
FanDuel applied for a license as an information service, manufacturer, and distributor and will share in gaming revenue at the Fremont sportsbook.
“There are no immediate plans for FanDuel to deploy any technology in Nevada,” Okerberg said. “Of course, if that were to change, we would meet with the Gaming Control Board’s technology division and seek approval.”
FanDuel Chief Operating Officer Andy Giancamilli told the Commission that FanDuel, however, is considering having employees in Nevada as part of its customer service for the western states. It has commissioned a study and Las Vegas is under consideration.
FanDuel CEO Amy Howe said her company has a history of opening state-of-the-art sportsbooks, of which the one at Fremont will be an example. It has room for about 80 patrons to watch live events on high-definition televisions. There will be four betting windows, in addition to self-service kiosks.
FanDuel’s role won’t be like at Boyd properties outside Nevada, where the FanDuel sportsbooks and apps operate out of the casinos. FanDuel operates 26 retail locations in the U.S., including those that are non-Boyd, in which they provide pricing of odds and management.
“We have decades of experience in risk, trading, and pricing and making sure we can provide subject-matter expertise to Boyd. But at the end of the day, they’re the ultimate decision maker,” Howe said.
Boyd will make all decisions regarding patron disputes, but FanDuel will have a mutual agreement, because it may have an existing relationship with the customer with which to provide additional information to Boyd.
FanDuel said they make joint decisions with Boyd on how much they’re going to market. Boyd is leveraging its database to market to consumers, but both will work together to make sure they’re marketing to the right customers and doing so responsibility, executives said.
Under its previous ownership, FanDuel, which today is part of Flutter Entertainment, an Irish holding company created by the merger of Paddy Power and Betfair, was issued a cease-and-desist order from the Nevada Gaming Control Board in 2015 for offering daily fantasy betting without a license. That was not an issue Thursday.
Commission members did, however, ask several questions about past fines in the UK regarding marketing and responsible gaming, including one for $2 million. FanDuel executives said they addressed those matters to improve their practices and procedures after their merger with Betfair and Paddy Power.
Commission members were satisfied that the company has addressed those issues.
“We’re constantly evolving and improving our processes,” said FanDuel Group Director Jeremy Jackson. “We track and monitor 150 pieces of information around how our customers are playing with us and that helps us identify new and different thresholds we can use to monitor and control customer behavior.”
For fans of FanDuel and other major operators outside of Nevada, analysts said they don’t expect the company to enter the market anytime soon beyond this branding initiative by FanDuel.
Josh Swissman, founder of The Strategy Organization, said Boyd has an investment in FanDuel and that it’s good to see the casino operator make strategic use of that brand in Nevada.
“The FanDuel brand is one of the market leaders,” Swissman told CDC Gaming after Thursday’s hearing. “FanDuel is the first online brand that has started to show itself in Nevada. Others (like DraftKings) are building offices in Las Vegas, but FanDuel will be the first that’s consumer facing.”
The online operators have been hesitant to launch in Nevada, due to its in-person registration not required in other states, Swissman said.
“Until Nevada changes its in-person registration requirements, I don’t think FanDuel, DraftKings, or any of the other pure online operators really put a ton of effort and resources into setting up a business in Nevada,” Swissman said. “It’s just too much of a disadvantage against the companies that have land-based casinos, like Caesars, MGM, and Wynn.”