Why DraftKings Massachusetts Hoped For A Universal Launch

On October 27, the Massachusetts Gaming Commission (MGC) rejected DraftKings’ request for a universal start date for retail and online sports betting. DraftKings Massachusetts was the only brand to ask for a universal start date. The rest of the brands lined up behind a staggered launch: retail sports betting in January and online sports betting in late February or early March. 

At a glance, this doesn’t make sense. DraftKings is one of the largest sportsbook brands in the United States. Its biggest competitor is FanDuel, which was the industry’s market leader as of July 2022. With DraftKings in second place, it needs a way to claw back to the top. 

Retail Launch vs Online Launch

Licenses for Massachusetts retail sportsbooks haven’t been announced yet. So, we don’t know which sportsbooks are partnered with which casinos. But, an online brand that starts with a retail sportsbook can begin building a customer base in the state. In addition, in-person pre-registration can build a large customer base on day one of a mobile sportsbook app. Thus, any retail sportsbook that can launch before online sportsbook apps has an advantage over the other online books. 

If DraftKings plans to be untethered—offer a sportsbook app without a casino partnership—then it’ll launch about two months after retail sportsbooks. If FanDuel plans to offer both a retail sportsbook and an online sportsbook, the already recognizable sports gaming brand will have two months of signups ahead of DraftKings. The planned staggered launch would hand FanDuel market dominance instantly. 

Related news: Lawmakers Expectations For Massachusetts Sports Betting Revenue

Other DraftKings Massachusetts Launch Possibilities 

There are other possibilities that led to DraftKing’s letter. DraftKings could just simply be trying to launch  in Massachusetts sooner. Most states have similar requirements, but different forms to fill out or interviews to undergo. This makes the licensing process long, inefficient, and expensive for applicants. If DraftKings knows that it’s close to satisfying Massachusetts license requirements, then it could be hoping to generate revenue that much sooner. 

One of the other applicants nipping at DraftKings’ heels could have retail and online plans. BetMGM is third in market share by gross gaming revenue (GGR). BetMGM is an extension of a successful casino brand that has become increasingly good at using its online brand to bolster its retail one. Getting a head start in Massachusetts could make it a more difficult competitor than it would be otherwise. 

Whatever the case, it’s in DraftKings—and every sportsbook’s—best interest to launch sooner rather than later. Each licensing process is an investment that must be paid back to achieve profitability in a new market.     

Related news: Encore Boston Harbor Prioritizes Responsible Gambling With PlayMyWay

Why Is Getting Customers First So Important? 

If sportsbook customers were willing to switch between sportsbook brands as easily as social media apps, then launching first wouldn’t be so important for a brand’s long-term market share. 

However, sportsbooks are tedious to sign up for. They require personal information, like the end of a user’s Social Security Number, that other apps don’t. Sportsbooks must comply with anti-money laundering laws that impose harsh penalties for awarding money to criminals. The danger of signing up a bettor on a state’s self-exclusion list further induces sportsbooks to know who they’re sending money to and accepting money from. 

Some sportsbooks require additional identity verification. Sometimes, users must upload a government-issued ID or a utility bill. This allows sportsbooks to comply with strict laws even though customers are just downloading a popular app.   

So, when customers sign up for a sportsbook, they often stick with that brand and maybe one or two more. Sportsbooks that make it to market first have lasting advantages. FanDuel was the first sportsbook to launch in New York, and it’s still the market leader in the largest US market to date. It’s a lesson DraftKings is no doubt aware of, and it’s the competitor best positioned to dethrone FanDuel in a new market.  

It explains DraftKings’ letter for a universal launch better than magnanimity.