Massachussetts sports betting: DraftKings requests regulator to review staggered launch dates

With in-person sports wagering set to go live in the state in January, and online following in March, online betting giant DraftKings has requested the Massachusetts Gaming Commission to reconsider its proposed sports gaming launch timeline.

The Commission will tackle this and other issues in its Thursday meeting, a day that could see updates on the regulations needed for the new industry to launch. The agenda for the day does not include a vote on DraftKings' proposal.

Massachusetts governor Charlie Baker signing the sports betting bill into law.

At a hearing in mid-September, Chris Cipolla, DraftKings Senior Director of Legal and Government Affairs, stated the company believes it is important that all sports wagering operators have a chance to launch on day one, and argued before the regulators that “the fairest and best approach to new markets” is setting one launch date and allowing everyone to work toward it, as reported by MassLive. 

Cory Fox, vice president for product and new market compliance at DraftKings' rival FanDuel, also urged commissioners to set a universal launch date. He stated that, at a minimum, all mobile sports wagering operators should start on the same day, as operators who have launched first in other states have “enjoyed significant, sustained advantage and market share" versus operators who launched days later.

Fox referred to FanDuel’s experiences in 2019 in Pennsylvania and Indiana, which he said highlight the advantage companies get when they launch before competitors. In Pennsylvania, Fox noted, FanDuel launched mobile sports wagering about three months before DraftKings, whereas in Indiana, DraftKings launched mobile sports betting approximately three weeks before FanDuel.

Based on publicly available data, he said, "FanDuel has maintained its position as the market leader in Pennsylvania ever since, and DraftKings has continued to benefit from their early launch as well,” the aforementioned source reported.

“If there’s no specific date, the operators will race to get licensure, and we’ll put significant pressure on the commission to ensure that they are first to market because of the competitive onus on us to make sure that we’re first to market in the commonwealth," he stated at the time.

The approval of these staggered launch dates split up the start of retail betting at the state’s casinos and online betting through up to seven yet-to-be-approved companies. This came after a pair of hearings where commissioners decided the launch dates and at no point considered unifying them into one integral launch.

By early September more than 40 entities, including casino and sports betting operators such as MGM Resorts International (MGM Springfield) and FanDuel and DraftKings, had expressed interest in applying for a sports betting license in the state. Applications and a $200,000 processing fee are due back to the commission by November 21.

The state’s sports betting law considers three different categories of operators, covering the state’s casinos and slots parlors; another that applies to live horsing racing tracks and simulcasting facilities; and a third one allowing for seven digital betting licenses, not connected to a brick-and-mortar operation.  

The state is expected to rake in at least $70 million from sports betting, and another $70 million per year in revenue once it kicks off, according to what Massachusetts lawmakers said at a Suffolk University panel discussion Wednesday.

As reported by the Boston Herald, state Rep. Jerry Parisella, the lead House negotiator on legalizing sports gambling this past summer, stated that licenses must be renewed every five years, “so every five years we are going to get that revenue from the license fees." 

Parisella said the new state law incentivizes in-person gambling at casinos, with those bets taxed at a 15% rate compared to 20% for online wagers, thus generating economic development. “We’re probably going to be one of the most productive states, in terms of revenue for sports betting,” he stated.