It’s finally over. And yet it’s just beginning.
We will remember 2018 as the year of legal sports betting in the United States following the Supreme Court‘s decision in May to overturn PASPA.
By the close of the year, eight states featured sports betting operations. That number appears certain to grow in 2019 as state legislatures take up the issue.
The Legal Sports Report team sat down for a (virtual) fireside chat about their memories of a wild year in legal sports betting … enjoy the first part of that talk today, and the remainder tomorrow.
Wait, what just happened?
Gentlemen, what a year. Let’s discuss.
Is it even possible to put the enormity of 2018 into perspective?
I still think of it this way, and it’s kind of amazing: Last December, I sat in the Supreme Court listening to oral arguments, and at the time we could bet on single games legally in exactly one state. Now, you can bet on them in eight states.
I knew there would be an appetite for legal sports betting, but I’m not sure I thought that much would happen in 2018.
And (Dec. 27) marks just 18 months since the Court first agreed to even *look* at Christie v. NCAA. That was sort of the first “break” for the possibility of legal sports betting in the US.
In the year and a half since, a decades-old federal ban has been erased, seven states have begun regulating the industry, and another 20 or so have legislation in the works.
What was I doing 18 months ago? Probably writing something about daily fantasy sports, I guess? It’s a brave new world to be sure.
It’s also interesting to see how many different approaches have been taken in those few months: There’s the robust online and land-based model in NJ sports betting (and soon West Virginia and Pennsylvania), land-based only at casinos in Mississippi, and the lottery-led approaches in Rhode Island and Delaware.
Comparing them all in terms of revenue and in their efficacy in competing with the black market, it’s pretty obvious that New Jersey (and online betting) is the model to emulate. Luckily, a lot of states are looking at this kind of model in 2019.
Remember the merger?
I’ll tell you what you were writing about. One of your stories the week before was this one, about whether or not DraftKings and FanDuel would fight the FTC over their proposed merger. Remember when those two definitely-not-gambling companies wanted to merge?
Today, they are arguably the two leaders in the US sports betting space — they certainly are in New Jersey. Both have world-class apps and retail sportsbooks bearing their logos. Both are taking bets in multiple states already, and FanDuel has points of entry into many more.
Oh, and DraftKings is dealing blackjack now. The proliferation of those two DFS companies is, by far, the most shocking development of the year to me.
This is definitely one of the wildest narratives of the post-PASPA era. Both DraftKings and FanDuel would tell you that they would have been OK without the advent of legal sports betting.
I am here to tell you that one or both of them would be in dire straits without it. And now, not only are they surviving, they are thriving, based on some smart decision-making and good tech.
If you had told me back in May that DraftKings and FanDuel would be destroying existing casino and sportsbook operators in the early days of legal sports betting, I would have thought you were crazy. The pivot has been nothing short of extraordinary.
Of course, it’s still early days, but it’s quite a start.
Don’t forget the little guys
I’m sure we will write plenty of words about DraftKings and FanDuel in this exchange. But calling back to what Dustin said just above, I see one of the most interesting stories of the year might not be the most obvious: the DC sports betting bill.
It featured a new jurisdiction wrestling with how to implement sports betting, an area speeding to beat its neighbors to market, a battle over integrity fees that somehow brought together DraftKings/FanDuel (there they are again) with MLB and MGM, and a clash over the single- vs. multiple-operator model. It’s like all of 2018 and a preview of 2019 wrapped into one.
And that’s not even to mention the futuristic stylings of Ted Leonsis and potential exclusivity zones.
That’s a good one, Adam. When you step back and look at it, it’s crazy to think all of these companies are now in the same team. Sounds like the start of a joke… “A casino, a DFS site and a pro sports league walk into a bar…”
But in all seriousness, who would have guessed that would happen? MGM CEO Jim Murren used to love to lob insults at DraftKings and FanDuel.
And yet another unique approach to crafting a regulated sports betting industry. It’s mostly by necessity, since DC doesn’t have any casinos.
We’re still trying to figure out exactly what the implementation will look like, but it is the first jurisdiction that expressly wants to put sportsbooks inside of its stadiums and arenas. Those “designated facilities” will be the primary license holders in DC.
I designate you to continue following this story in 2019.
While Eric gets started on that, let’s break for some leftover egg nog before we dive into the most important figures in 2018 tomorrow …