Sports betting is a hot topic of conversation just about anywhere you look, now that 35 U.S. states and the District of Columbia feature retail or mobile betting, but rarely is Nevada mentioned in those conversations. It’s one of the 35 states after all, like Maryland, Ohio and Indiana.
You’d think the casino capital would be at the top of the list. Not so when it comes to operators. Why? Simple: The state requires customers to sign up for an account in person, at an existing casino. The casino industry doesn’t see big profits in sportsbooks in Nevada, so it insists guests come into their building to register, where they might play slots, or blackjack or grab a bite to eat.
Sportsbooks are fine with that, but not at the expense of their livelihood. The latest sportsbook ventures—Fanatics Betting and Gaming and ESPN Bet—have no plans to set up shop in Nevada, according to the Nevada Independent.
Fanatics operates in five states; eight more will be on tap through the acquisition of PointsBet.
ESPN Bet comes online in November in 16 states replacing Barstool Sports for Penn Entertainment as part of a 10-year, $1.5 billion partnership.
Neither has Nevada on its radar.
At the insistence of the casinos, the in-person registration remains, even if it hinders growth in the marketplace.
“Nevada, which accounts for a little more than 1 percent of the U.S. online gambling revenue, is not a must—not even close—for FanDuel and DraftKings,” analyst Chris Krafcik of Eilers & Krejcik Gaming wrote in an email to the Independent.
Krafcik, who follows sports betting and digital gaming for the southern California-based advisory firm, wrote in a monthly market report that Nevada trailed five states in online wagers over the past 12 months.
New York led the pack with $17.2 billion, followed by Illinois with $10.2 billion, New Jersey with $9.9 billion, Pennsylvania with $6.7 billion and Arizona with $6.2 billion. Nevada was sixth, with more than $5.5 billion.
The Nevada Gaming Control Board (NGCB) reported that sportsbooks in the state enjoyed an 11 percent increase in revenue in the 12 months ending in August, or $250.9 million. Still, a handle of $4.9 billion fell 7 percent from the prior year.
The American Gaming Association reported that sports betting revenue in the U.S. rose 60 percent through August to $6.14 billion. Mobile sports wagering in Nevada amounts to 65 percent, or almost $3.2 billion, of total sports bets. In the U.S., the figure is 80 percent.
Since DraftKings and FanDuel—the top two operators in the country—declined participation in Nevada, two that did, BetMGM and Caesars Entertainment, are both eager to grab market share where they can. In the U.S. total overall, BetMGM and Caesars Sportsbook occupied the third and fourth places.
Eilers & Krejcik said they counted 61 online sports betting businesses in the U.S., but a dozen have shuttered since January 2022.
It’s interesting to note that Nevada lacks a category for online sports betting. Regulators license casino firms to run sports betting at multiple properties. Individual casino owners agree to use a platform supplied by a gaming equipment provider. Mobile sports betting obtains approval as an associated technology.
“We’re in one of the most competitive markets in the world. Anyone who thinks that it’s over in the first inning is just foolish,” DraftKings CEO Jason Robins said on October 11 during a Global Gaming Expo keynote session with FanDuel CEO Amy Howe.
Krafcik suggested that revenue and wagering percentages could grow if the requirement disappeared. “However, we doubt Nevada will make those changes anytime soon,” he told the Independent, “which leaves Fanatics and ESPN Bet on the outside looking in.”
Fanatics Vice President Kevin Hennessy said it was “way too soon to even contemplate (Nevada) at this point in our evolution.”
Penn Executive Vice President Eric Schippers said much the same thing.
“(I’ll) be happy to circle back as plans firm up (for) Nevada,” Schippers wrote in an email to the Independent. Penn runs M Resort in Henderson and a couple of small properties in Jackpot, near the Idaho border.
FanDuel and DraftKings do have a presence in Nevada, just not as traditional sports betting operators. Earlier in 2023, the sportsbook at Boyd’s Fremont Hotel and Casino was rebranded as a FanDuel sportsbook, but under Boyd’s management.
A Boyd spokesman said the company has not changed its position in favor of on-site registration requirements.
DraftKings has more than 1,000 employees in southern Nevada with local headquarters in a complex in southwest Las Vegas. The company also owns the Vegas Sports and Information Network (VSiN), which has studios at South Point Casino Resort and Circa Casino Resort.
Fanatics operates in Kentucky, Massachusetts, Maryland, Ohio and Tennessee, with retail sportsbooks at three stadiums, one in Maryland and two in Ohio.
ESPN had a studio presence at The Linq resort in partnership with Caesars Entertainment, and where the locale of “The Daily Wager” show originated.
The relationship concluded once the deal with Penn was finalized. The show has since returned to Bristol, Connecticut.
“We don’t believe either [ESPN] deal was ever lucrative to Caesars or DraftKings,” Stifel Financial gaming analyst Steven Wieczynski told investors in a research note. “We fully understand ESPN has more of a financial stake now with Penn versus those other one-off partial deals, which should help both parties.”
Wieczynski was one of several gaming analysts who attended a private meeting on the first day of G2E with Penn CEO Jay Snowden and ESPN Vice President of Sports Betting Mike Morrison.
J.P. Morgan gaming analyst Joe Greff said the discussion focused on the big picture and avoided financial forecasts.
“ESPN noted that it will devote resources from the entire ESPN ecosystem and anything in print or linear referencing odds will be branded ESPN Bet,” Greff wrote following the meeting.
Truist Securities gaming analyst Barry Jonas said in a note to investors that sports betting operators “sounded generally prepared for ESPN Bet’s entry into the market.”
States such as Colorado and Arizona offer better sign-up bonuses and wagering menus than Nevada. Some sports bettors cross state lines into Arizona for such advantages.
