Staggered vs. Universal Launch: Will It Matter for MA Sportsbooks?

In fall 2022, DraftKings submitted a request to the Massachusetts Gaming Commission for a universal start date instead of a staggered launch. The MGC rejected that request, leaving the door open for a staggered launch.

MGC Executive Director Karen Wells kept that door open on Feb. 9.

“(The online launch) is really dependent on the quality of the internal control submissions the applicants have submitted,” Wells said at a MGC meeting. “ … We do have the option of launching some but not all of the operators.”

Retail sports betting in Massachusetts went live on Jan. 31, and online sports betting is planned to launch March 10. Most often, the goal is to have a universal launch to ensure that no brands could pull ahead and dominate the market.

However, a recent example shows that, really, it doesn’t matter whether the launch is staggered or universal.

The titans will reign supreme anyway.

Indiana had a staggered launch in October 2019. DraftKings launched about two and a half weeks before FanDuel. DraftKings held a 30-month lead in terms of market share until FanDuel finally overtook it. And it’s created even more of a gap since then.

In the Indiana Gaming Commission’s 2022 annual report, FanDuel had captured 38% of online sports betting market share. DraftKings’ mobile market share was 29%.

While launching first had a medium-term benefit, FanDuel’s operational capabilities made up for its slightly later start in Indiana. In Flutter Entertainment’s Aug. 2022 Interim Results, FanDuel credited its rise to the top of the market to two factors:

• Increasingly efficient conversion from DFS customers
• Improvements to FanDuel’s parlay products

Using FanDuel vs. DraftKings in Indiana as an Example

During each new state launch, FanDuel refines the way it converts DFS customers to sportsbook customers. According to its Interim Results, FanDuel has gotten its customer cost per acquisition below $300 this way.

But FanDuel has also focused on “higher margin parlay products,” like the Same Game Parlay Plus, or SGP+, which allows bettors to build parlays from multiple SGPs. These wagers dramatically increase potential payouts, but their chances of winning plummet. It’s an easy way to entice bettors to place bets that are less likely to win for the same amount of money.

DraftKings has also developed similar Same Game Parlay products. But according to its November 2022 8-K, DraftKings has also spent a lot of resources on “new multi-player prop and player flash products.”

It’s possible that FanDuel has tapped into a more profitable product in its SGP than DraftKings has in its prop bets. FanDuel may also be doing a better job at converting DFS customers to sportsbook customers in new markets. FanDuel’s customer acquisition speed could be undermining the advantage that an early start brought in the early days of the sports betting industry.

Staggered vs. Universal Launch in Massachusetts

Sportsbooks can’t eliminate the importance of launching earlier than their competitors.

But launching first is no guarantee of long-term market leadership.

DraftKings and FanDuel have been the best companies at tapping into their DFS customers. Their digital marketing backgrounds propelled them ahead of other brands who were less widely known for sports gambling nationwide.

FanDuel has a commanding lead in the market, but its ability to overtake its main competitor after a two and a half week delay suggests the sports betting industry has entered a new phase. The deep pool of customers on sportsbooks’ digital marketing lists are bearing fruit.

While major industry exits are still months away, FanDuel’s dominance followed by DraftKings and a handful of other recognizable brands is a glimpse of a likely future for the sports betting industry. 

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