FanDuel, one of the largest sportsbook operators in the U.S. by market share, is about to get its foot in the door in Nevada after the Gaming Control Board on Wednesday recommended a limited entry into the state as a partnership with Boyd Gaming.
If approved by the Nevada Gaming Commission at its meeting on Aug. 25, FanDuel, in which Boyd has a 5% stake, will bring its brand and information services to Boyd’s Fremont Hotel & Casino in downtown Las Vegas. Boyd will continue to operate the sportsbook and use its mobile betting app.
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 by the Nevada Gaming Control Board in 2015 for offering daily fantasy betting without a license. Flutter executives were part of the recommendations for licensing that will go before the Nevada Gaming Commission.
FanDuel attorney Erica Okerberg of Las Vegas firm Greenberg Traurig told the Board that FanDuel doesn’t plan to import any technology into Nevada at this time. Fremont uses the IGT platform that will be updated with some FanDuel specifications incorporated into it. FanDuel already has a relationship with IGT.
“FanDuel will provide a line and odds feed, as well as information advice and guidance, to the Fremont sportsbook for their determination in setting lines and odds and managing their own risk,” Okerberg said. “There won’t be any FanDuel employees there. The plans are only to provide information and guidance based on customer patterns, knowledge, and information through FanDuel and Flutter models. There will be no pooling of risk from any other FanDuel sportsbook.”
She added, “Obviously, they’ll be a revenue share with operating that retail sportsbook.”
FanDuel’s role in Nevada won’t be like Boyd properties outside the state, where the FanDuel sportsbooks and apps operate out of their casinos. FanDuel has 26 retail locations in the U.S., 13 with Boyd and 13 that are non-Boyd in which they provide pricing of odds and management. Boyd partners with FanDuel for igaming as well.
FanDuel CEO Amy Howe addressed the Gaming Control Board in a hearing that lasted more than 90 minutes. She noted that they will redevelop the Fremont sportsbook with the FanDuel brand, while Boyd operates the book. It’s under renovation and will be completed by late 2022, Howe said.
Howe said it will be a great experience for consumers, with a state-of-the-art sportsbook that has room for 80 patrons to watch live events on high-definition televisions. There will be four betting windows in addition to self-service kiosks.
“The intent is not to bring in the FanDuel app at this time,” Howe said. “There may be a future time when the app might be brought in, but the (Boyd) app will continue to appear to the patron as it does today. The retail book (however) will be branded with FanDuel.”
That would require a return to gaming regulators for approval.
Board Chairman J. Brin Gibson raised concerns about the consumer being misled by the FanDuel branding when Boyd is operating the sportsbook.
“Does that concern you at all?” Gibson asked Howe. “If a patron has a dispute, are they going to presume it’s FanDuel?”
Howe responded that they do due diligence about their partners and Boyd has been one with high integrity.
“We’ve been co-branding sportsbooks since we started operating, but we understand our brand is on that sportsbook,” Howe said. “I don’t have concerns around situations like this where a company is licensing a brand. What’s important is to make sure we deliver a high-integrity and positive experience to the consumer; otherwise, it reflects poorly on our brand. I don’t have any concerns about misleading customers because the FanDuel brand is on this.”
Howe said in this case, it would be co-branding, combining the Fremont and Boyd logo and name with the FanDuel brand.
Board members expressed concerns about the blurring of the responsibilities with FanDuel, which wouldn’t be licensed to operate a sportsbook and use its app.
“I understand the Board members’ concerns regarding this,” Howe said. “The team has experience with this similar model with a couple of other jurisdictions, particularly in tribal markets. They’re very familiar with this and it’s not a first-case impression in understanding where the lines are. I feel confident the team understands those lines and the Boyd team understands those lines and everybody wants to work together to make sure they’re not crossed.”
Howe said FanDuel has no immediate plans to open an office in Las Vegas.
“One of your competitors does,” Gibson said, referring to DraftKings, which has an office, despite not having a license to operate in Nevada.
“We will always keep our options open,” Howe responded amid the laughter.
Casino consultant Brendan Bussmann, managing director of B Global, told CDC Gaming Reports that FanDuel is “dipping its toe in the water” for future opportunities that would bring one of the largest sportsbook brands in the U.S. and globally to Nevada. The problem is the same one DraftKings faces: The state has an “archaic system” that requires in-person registration, rather than through those companies’ mobile apps, as is done in other states. That needs to change before those companies jump in fully, but FanDuel is doing it now for branding and to work with a partner in Boyd Gaming, he said.
“Only two jurisdictions have in-person registration, Nevada and Puerto Rico,” Bussmann said. “What does that tell you? You’re getting ready to host a Super Bowl. You’re going to host a Final Four. You’re going to host a college- football playoff (championship game), and you’re going to host an F1 race. You’re leaving sports-betting revenue on the table because of an archaic system. You have brands that want to do this; otherwise DraftKings wouldn’t have opened an office. But the regulations haven’t caught up with modern technology.”