Why DraftKings Massachusetts Hoped For A Universal Launch

DraftKings’ proposal for a universal start date for both retail and online sports betting in Massachusetts was rejected by the Massachusetts Gaming Commission (MGC) on October 27. Among all the brands, DraftKings Massachusetts stood alone in seeking a uniform launch date. The other brands opted for a staggered approach, scheduling retail sports betting to commence in January, while online sports betting was planned for late February or early March.

Upon initial examination, this appears to be illogical. DraftKings, a prominent sportsbook brand in the United States, faces tough competition from FanDuel, which held the leading position in the industry as of July 2022. As DraftKings currently ranks second, it must find a strategy to regain its position at the forefront.

Retail Launch vs Online Launch

The announcement of licenses for Massachusetts retail sportsbooks is still pending, leaving us in the dark about the specific partnerships between sportsbooks and casinos. However, an online brand that initiates with a retail sportsbook can seize the opportunity to establish a customer base within the state. Moreover, through in-person pre-registration, a substantial customer base can be built on the very first day of launching a mobile sportsbook app. Consequently, any retail sportsbook that manages to launch before online sportsbook apps will enjoy an advantageous position over other online books.

If DraftKings intends to operate independently by providing a sportsbook app without collaborating with a casino, it will be launched approximately two months after the retail sportsbooks. On the other hand, if FanDuel plans to offer both a physical sportsbook and an online sportsbook, the well-known sports gaming brand will have a head start of two months in terms of customer registrations compared to DraftKings. This strategic launch sequence would immediately grant FanDuel a significant advantage in the market.

Massachusetts lawmakers anticipate revenue from sports betting

Other DraftKings Massachusetts Launch Possibilities 

There are alternative reasons behind DraftKing’s letter. One possibility is that they might be aiming to expedite their launch in Massachusetts. While most states have comparable prerequisites, the paperwork or interviews involved may vary. This results in a lengthy, inefficient, and costly licensing process for applicants. If DraftKings is aware of being near fulfillment of Massachusetts’ license requirements, they could be anticipating generating revenue at an earlier stage.

DraftKings is facing competition from another applicant that may have both retail and online strategies. BetMGM, currently holding the third position in market share by gross gaming revenue (GGR), is an offshoot of a thriving casino brand that has effectively utilized its online presence to enhance its retail operations. If BetMGM manages to establish itself early in Massachusetts, it could pose a more formidable challenge to DraftKings than it would otherwise.

Regardless of the circumstances, both DraftKings and every sportsbook have a strong incentive to launch as soon as possible. The licensing process is an investment that needs to be recouped in order to attain profitability in a new market.

Encore Boston Harbor places a strong emphasis on responsible gambling through the implementation of PlayMyWay.

Why Is Getting Customers First So Important? 

Launching first would not hold as much significance for a brand’s long-term market share if sportsbook customers were as flexible in switching between sportsbook brands as they are with social media apps.

On the other hand, signing up for sportsbooks can be a cumbersome process. Unlike other apps, they demand personal details such as the last digits of a user’s Social Security Number. These sportsbooks are bound by stringent anti-money laundering regulations, which carry severe consequences for providing funds to illicit individuals. Additionally, the risk of enrolling a bettor who is on a state’s self-exclusion list further incentivizes sportsbooks to identify the recipients and sources of money they deal with.

Certain sportsbooks may require users to undergo additional identity verification for compliance with regulations. This could involve uploading a government-issued ID or a utility bill, despite the fact that customers are simply downloading a widely-used app.

When customers register for a sportsbook, they typically remain loyal to that brand and perhaps a couple of others. Being the first sportsbook to enter the market offers long-term benefits. FanDuel was the pioneer in New York, and it continues to dominate the largest sports betting market in the United States. DraftKings is undoubtedly aware of this lesson and is the strongest rival to overthrow FanDuel in a new market.

It provides a clearer explanation of DraftKings’ universal launch than magnanimity does.