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But not everyone in the DFS market has followed that path. Some are trying to make it by just getting into regulated markets as they open up, or as they procure licenses.
Examples of that are USFantasy — a pari-mutuel DFS product — and PlayON — which holds gaming licenses in the UK, Ireland and Australia.
The former is now in its second state, joining its initial offering and license in Nevada.
USFantasy is now offering its pari-mutuel fantasy contests in Colorado, after receiving approval from regulators in the state. (DFS was formally legalized when a law was enacted earlier this year.)
It will be offered by Mile High Racing & Entertainment after the Colorado Racing Commission approved the USFantasy platform. USFantasy lets bettors place wagers on players in sporting events in a pari-mutuel pool much like horse race wagering is conducted. Payouts are based on the number of fantasy points the athletes accrue.
“We selected USFantasy Sports to provide our contests because of its skill based content which met the commission’s requirements,” K. Bruce Seymore, general manager of Mile High, said in a press release. “We are thrilled to offer the next generation of daily fantasy sports to the citizens of Colorado, and we look forward to the opportunities that USFantasy Sports contests will bring to our current and future clientele.”
The locations for USFantasy in Colorado:
“This is a significant step forward for USFantasy Sports and we are excited about the Colorado market and our potential for growth within the state,” said Vic Salerno, president of USFantasy. “We look forward to continuing our expansion across the United States.”
It’s also branching out in which sports it offers. While it launched with just contests for NFL, USFantasy has added basketball, hockey, boxing and mixed martial arts.
The expansion of both locations and contests at least gives the product a chance at growth.
By only going into regulated markets, and by the nature of how it is offered — only at physical locations and sportsbooks — the scope of what USFantasy can do is obviously limited.
But it does have advantages that other DFS platforms don’t. For instance, it has a lot more legal certainty. By only serving regulated markets, USFantasy doesn’t have the same potential problems that the direct-to-consumer DFS market might run up against.
Also, most states right now can’t offer sports betting at their casinos or racetracks because of PASPA, the federal law that bans most forms of sports wagering. USFantasy offers states a way around that, short of being able to provide single-sport wagering. (I’ve argued that New Jersey should try to push the envelope on sports betting via DFS.)
It’s not difficult to believe other states will add USFantasy — or some sort of similar product — down the road while straight sports betting is still off the table. Ten states have passed laws dealing with DFS in recent years.
USFantasy is also a lot easier to play than traditional DFS contests conducted with a salary cap model. All it takes is picking a player to have monetary interest on a game.
There are still questions about whether USFantasy’s product can gain real traction and generate meaningful handle, given some of its limitations. But to dismiss it entirely as a path forward in regulated US gaming markets would probably be a mistake.