[toc]Gaming tribes across the US have pretty much stayed on the sidelines when it comes to offering daily fantasy sports. That is changing in a major way, as a tribe in Minnesota has launched a DFS site in advance of the upcoming NFL season that will be shopped to other tribes with gambling interests.
Grand Fantasy Sports, at a glance
Grand Fantasy Sports went live this week; it was developed by Mille Lacs Corporate Ventures, the business arm of the Mille Lacs Band of Ojibwe. That tribe owns and operates Grand Casino Mille Lacs and Grand Casino Hinckley in Minnesota.
It is more than a standalone fantasy sports platform, however; the underlying software is called EZFantasy, which is a white-label B2B platform developed and launched last year by 2020 Casino Solutions, another company under the MLCV umbrella.
Contests offered are based on the dominant form of DFS in the marketplace, the salary-cap model offered by the likes of FanDuel and DraftKings. It comes just as daily fantasy football season kicks off.
The site started as a free-play offering for Grand Casino patrons, and a real-money version of the platform was developed during the NFL offseason. The site has a deal with sports data company Sportradar to provide statistics.
Grand Fantasy will run promotions designed to drive traffic back to the brick-and-mortar facility, as well as allow the casino to communicate with new audiences of potential customers on a daily basis, according to Sarah Barten, public relations for MLCV.
MLCV is also planning on integrating its DFS offering at two planned upgrades to its casinos: Brand Burger Bar at its Grand Casino Mille Lacs location and a sports viewing bar (Rival House Sporting Parlour) at its Grand Casino Hinckley location. Both projects are currently under construction.
“By combining its fantasy sports offering with new restaurants, Grand Casinos will be catering to a different generation of clientele, as well as give regular sports fans an exciting new entertainment experience,” Barten told Legal Sports Report.
Where is Grand Fantasy live?
The contests at Grand Fantasy are offered in just 11 states:
- California
- Colorado
- Kansas
- Minnesota
- Mississippi
- Nebraska
- North Dakota
- Oklahoma
- South Dakota
- West Virginia
- Wisconsin
Of course, the idea is not that customers from all these states will flock to the Grand Fantasy platform. Rather, the hope is that tribes in these states will use the EZ Fantasy platform with their own branded version of the site. Then, user bases will be shared across all sites in the network.
According to Barten, 2020 has primarily marketed its platform to land-based casinos.
The list of sites where the site is operational is far short of the 40 or so that most DFS operators serve in the US, based on various legal concerns. Most of the states above have tribal gambling and generally have gambling laws considered to be conducive to offering DFS as a game of skill. But some of the states also made the cut for other reasons:
- There are friendly DFS laws on the books in Kansas, Colorado and Mississippi, with the latter two featuring relatively light regulation in their laws.
- West Virginia’s attorney general issued a positive opinion about the legality of DFS.
- California sticks out on this list as the one state with the least legal clarity of the bunch; however, the state’s large population would provide a huge boost to liquidity if gaming tribes there sign on.
Tribes, online gambling and DFS
Tribes with casino interests have not been on the front lines of daily fantasy sports, to date, as this is the first real foray into the industry.
That’s not to say that tribes have not been involved at all, as some have eyed DFS as encroaching on their gaming compacts in states. That sentiment has been expressed by tribes in:
- California
- Florida
- Oklahoma
- Arizona
More on the backstory of tribes and DFS here and here. (Of note: At one point, DFS operator DraftDay had an agreement with the Seneca in New York, a relationship that was not meaningfully leveraged.)
The resistance to DFS has come in that tribes have not wanted to grant what they view as an expansion of gambling in their states. They have rallied against giving an advantage, or equal footing, to non-tribal interests. (Of course, that stance ignores the fact that DFS companies are already operating in almost all of the states where tribal resistance has manifested.)
If tribes start getting invested in the DFS space — instead of just being interested observers or trying to pump the brakes on the advance of DFS — that could dramatically shift the dynamic for the discussion across the US. In that scenario, tribes would more actively lobby against the relatively friendly legislation that the DFS industry (or at least DraftKings and FanDuel) has passed in eight states or would like to see passed in others.
Tribes have increasingly eyed online gambling, as well:
- Tribes in California have long been involved in discussions over regulating online poker, a legislative effort that failed once again this year.
- A tribe in Iowa is working on an international online gambling site.
The backstory of DFS legality in Minnesota
Minnesota has generally been considered to be a state where DFS is legal by most operators. That did not stop an effort earlier this year by the state legislature to clearly legalize and regulate the DFS industry.
That effort, failed, however; a bill passed the House but stalled in the Senate.
The legality of DFS has been called into question in a court case involving a smaller DFS operator, which is arguing that DFS is illegal in Minnesota to get out of paying its debt to the NHL franchise in the state.
Can the B2B model work in the US and for tribes?
The B2B model for DFS has been around for years now, although it has not yet gained traction in a meaningful way. One of the newer entrants, iTEAM network, has had success in gaining new white-label clients but is still relatively small. Star Fantasy Leagues and DraftDay also offer white-label DFS solutions.
But we have seen more evidence that the B2B model in DFS could pick up steam. That includes USFantasy, a DFS operator in Nevada that has partnered with a number of sportsbooks in the state. It also includes Global Daily Fantasy Sports, an operator eyeing international regulated markets that has a distribution deal with gaming company NYX.
The appetite for the B2B model — in the US and especially for gaming tribes — is not yet known. And tribes are entering the DFS industry in a big hole, attempting to compete with the giant market advantage enjoyed by DraftKings and FanDuel.
However, Grand Casino and other tribal casinos have some advantages that current DFS operators do not, such as a theoretically lower customer acquisition cost by targeting casino patrons that they already have access to.
For now, the Grand Fantasy DFS offering is niche and won’t move the needle in the larger DFS industry in the short-term. But if you’re a tribe wanting to get into the DFS business, you have to start somewhere.
