DraftKings, FanDuel Scrap Nevada Push to Chase Bigger Market Play

• Moves are parts of agreements with Nevada Gaming Control Board (NGCB).
• Regulator is heavily opposed to prediction markets.
• Neither company offers sports betting in the state.

Flutter Entertainment’s FanDuel will surrender its Nevada licenses and DraftKings will drop pursuit of related permits as both operators opt to focus on prediction markets over attempting to procure sports wagering approvals in the state.

The moves stem from agreements reached with the Nevada Gaming Control Board (NGCB), which made the announcement earlier today. Neither DraftKings nor FanDuel accept sports bets in the Silver State. The pair are the two largest online sportsbook operators in the US.

Today, the NGCB accepted the surrender of Flutter Entertainment PLC’s Order of Registration, as well as all related licenses and approvals including those for FanDuel Sportsbooks and its license as a provider of an information service, and granted administrative approval of requests for withdrawal for all active and pending applications,” according to a statement.

Currently, FanDuel’s consumer-facing Nevada footprint is limited to providing branding and odds to the sportsbook at Boyd Gaming’s (NYSE: BYD) Fremont Hotel Casino in downtown Las Vegas. In August, Flutter wrapped up the $1.758 billion acquisition of the 5% of FanDuel it didn’t previously own from Boyd. DraftKings’ Nevada footprint largely consists of an office in the Southwest area of the city.

Nevada Taking Hard Line Against Prediction Markets

With DraftKings announcing DraftKings Predicts and FanDuel saying earlier today that FanDuel Predicts will debut next month, it’s clear the members of the US online sports betting duopoly will leverage event contracts to states in which they currently don’t operate.

The NGCB said it warned DraftKings and FanDuel sports event contracts could jeopardize their statuses in the state, echoing refrains heard from gaming regulators across the country.

“It has been made clear to the Board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts,” said the regulator. “This conduct is incompatible with their ability to participate in Nevada’s gaming industry.”

The NGCB also noted that Nevada licensees offering event contracts in other states while running afoul of those jurisdictions’ regulations are subject to punishment in Nevada.

Sigh of Relief for Nevada Operators

While the online-only models of DraftKings and FanDuel made them ill fits for Nevada — a state requiring in-person registration for mobile sports betting accounts — prevailing wisdom previously indicated a day would eventually come when those companies booked bets in Nevada.

That no longer seems like a possibility and that may be relief to BetMGM, Caesars/William Hill, Circa, and STN Sports – Nevada’s top mobile sportsbooks by market share. Whether or not those companies bring event contracts to the state remains to be seen, but the NGCB isn’t closing the door to that.

“If a Nevada licensee chooses to offer sports event contracts in Nevada or decides to partner with other entities offering sports event contracts in the state, the Board will consider these developments as it evaluates the suitability of the entity to maintain a Nevada gaming license under NRS 463.170,” concludes the regulator.