FanDuel Acquisition Could Be Needed for Nevada Entry

Entry into Nevada may require acquisition of FanDuel

Despite growing competition from other states, Nevada remains one of the U.S. sports betting meccas, but the industry's two largest operators - DraftKings (NASDAQ: DKNG) and FanDuel - still don't have a presence there. State provides services.

When that will change is unclear, but executives from FanDuel and parent company Flutter Entertainment (NYSE: FLUT) spoke to the Nevada Gaming Control Board (NGCB) during a meeting on Wednesday. provided some clarification on the matter and pointed to the potential need to acquire the largest online sports betting operator to enter the Silver State.

Flutter Chief Financial Officer Paul Edgecliffe-Johnson told NGCB members that FanDuel is looking to expand in any state, including Nevada, where it makes "economic sense" for the company. Complexities unique to Nevada make it difficult for FanDuel to enter the state without an acquisition, he said, adding: "We're constantly reviewing everything."

That said, Nevada requires bettors who want online sports betting accounts to go into a brick-and-mortar casino and fill out paperwork to obtain those accounts. Most states that offer mobile sports betting do not have this onerous requirement. Neither DraftKings nor FanDuel operate brick-and-mortar casinos.

FanDuel has a small presence in Nevada

While DraftKings has an office in southwest Las Vegas, FanDuel has a smaller office in Nevada. It provides branding and odds for Boyd Gaming's (NYSE: BYD) Fremont hotel-casino in downtown Las Vegas, and that's it for now.

Boyd owns a 5% stake in FanDuel, and there has been speculation that the casino operator, which is renovating its Suncoast Hotel & Casino in suburban Las Vegas, could have a similar relationship with FanDuel as it opens new sports properties Same as gambling. But even so, FanDuel won’t offer mobile betting in Nevada. Flutter’s Padraig O’Riordain reiterated elements of the acquisition to the NGCB.

The challenge we have in Nevada is, from a sports perspective, we have a very developed risk and trading system globally," O'Riordan said. "If you don't get something here and get another license If we don't have proof, we can't bring it in. We need to figure out how to solve this problem. Under review. "

FanDuel and Flutter executives did not comment on the potential Nevada acquisition.

NV MISSED

Some experts point out that Nevada, which does not impose a state income tax, is missing out on important revenue by continuing to use an in-person registration requirement. That keeps big-name operators like FanDuel and DraftKings away from the state. In the United States, these two operators are expected to control nearly 80% of the online sports betting market.

Again, emerging players like ESPN Bet and Fanatics are not active in Nevada due to on-site registration requirements.

Of the four, only ESPN Bet could change its Nevada status in the short term, as owner Penn Entertainment (NASDAQ: PENN ) operates the M Resort Spa Casino in Henderson.Penn recently said ESPN Bet's status in Nevada was unlikely to change anytime soon.