DraftKings to close Atlantic City casino partnership for sports betting

It’s becoming clear that some daily fantasy sports operators are going to pursue sports betting. DraftKings is one of those companies, however, as reported by PlayNJ, the operator would need to secure a land-based casino partnership in order to offer sports betting itself. It seems like a substantial hurdle to clear, but perhaps not. At least some industry insiders now believe a deal is almost done.

The April report from gaming consultancy Eilers & Krejcik Gaming on the DFS industry included this tidbit:

Sources close to the process say that the company is close to inking a deal with a casino partner that would see DraftKings act as an omni-channel provider.

It’s become much more than speculation at this point. Suddenly opening a new office and forming a sportsbook staff are pretty hard evidence on their own. And last month, we finally got it straight from the horse’s mouth.

In a statement on March 30, DraftKings revealed that the process was perhaps further underway than we anticipated. “In preparation for the possibility of sports wagering in New Jersey,” it said, “DraftKings has naturally had discussions with potential land-based casino partners, as required under the state’s online gaming regulations.”

Now, the speculation turns to exactly how DraftKings plans to offer sports betting. And who this potential partner could be.

All we can assume so far — and watch this turn out to be wrong — is that it won’t be Resorts, which already has an in-house fantasy sports product called FastPick.

Apart from that, the remaining eight casinos would seem to be contenders, including the soon-to-be-opened Hard Rock Atlantic City and Ocean Resort Casino.

From DraftKings’ standpoint, expanding into sports betting makes plenty of sense. There’s a reason there was so much speculation leading up to the confirmation.

Although DFS operators have historically separated themselves from the industry, change has come. Sports betting has replaced DFS as the hot topic. Acceptance is growing across the country, too, both among lawmakers and the general public. And from a financial standpoint, the wagering market is immensely larger than the DFS market. It all makes sense.

It’s not clear, though, how good a partner DraftKings would be for a casino.

Atlantic City casinos already have ties with online gambling providers, and most of those providers are prepared to expand into sports betting immediately. DraftKings does not, presumably, have the tech ready to go. It’s not even clear whether it would develop such a platform in-house or need to partner with a third party itself.

What DraftKings does have is a significant database of sports gaming enthusiasts, maybe as large as 10 million players. (How many of those are actually “active” or could be activated is a valid question.)

The report also cites a potential “omni-channel” product, which could include a branded sportsbook inside of an Atlantic City casino. DraftKings has certainly paid for plenty of brand recognition among sports speculators, but it’s not clear if it would pull weight in the brick-and-mortar realm. Are bettors more likely to visit the DraftKings sportsbook than the Golden Nugget sportsbook next door?

Time may indeed tell, as the rumors of a partnership mount.