Pennsylvania Daily Fantasy Sports Generate $12.4 Million in Contest Fees During First Month
Posted on: June 23, 2018, 08:00h.
Last updated on: June 22, 2018, 06:48h.
Pennsylvania daily fantasy sports (DFS) has its first full month in the books, and it was a strong debut for the industry’s two major players.
FanDuel and DraftKings respectively reported adjusted revenue (income after distributing winnings) of $673,013 and $632,008. That accounts for 98 percent of the state’s entire DFS market.
Ten DFS operators have paid the Pennsylvania Gaming Control Board a $50,000 licensing fee to offer online fantasy sports contests.
After the two dominant leaders, DRAFT reported earnings of about $17,000. Yahoo Fantasy Sports was fourth with just $4,430, and Fantasy Draft rounding out the top five with $2,500.
Combined, the operators reported $1,331,706 in adjusted earnings. With DFS taxed at 15 percent, that means the state collected just short of $200,000 in May from the newly regulated activity.
Sports Betting Reluctance
Along with daily fantasy sports, Pennsylvania’s 2017 gambling expansion package included the authorization of up to 10 satellite casinos, slot machines inside certain truck stops and airport terminals, internet gambling, and the framework to regulate sports betting.
The sports wagering component was preemptively passed should a change come to the longstanding federal ban. The Supreme Court of the United States ruled against the 1992 Professional and Amateur Sports Protection Act (PASPA) last month in a 6-3 decision.
The PASPA repeal means states, as of now, can dictate their own regulatory conditions regarding sports betting.
Pennsylvania’s gaming board has opened up the application process to the state’s 12 land-based commercial casinos to obtain permission to operate a sportsbook. But with a one-time $10 million license fee required, and net revenues to be taxed at an exorbitant 34 percent, and it’s rumored that none of the casino operators have yet submitted an application.
Lobbyists are urging state officials to reduce the proposed tax rate before formally finalizing Pennsylvania’s sports betting rules.
Delaware and New Jersey are the first two states to join Nevada in offering full-fledged sports gambling in wake of the PASPA decision. Along with Pennsylvania, West Virginia and Mississippi have laws to authorize sports gambling, and 15 others have legislation introduced.
Some believe legal sportsbooks across the country will revoke the need for daily fantasy sports. The legality of online DFS has caused much debate and lawsuits, as operators argue the Unlawful Internet Gambling Enforcement Act (UIGEA) excludes fantasy sports, and that the contests are based more upon skill than chance.
According to the Fantasy Sports Trade Association, about half of all DFS players are also sports bettors who have wagered money in a more traditional form (moneyline, points spread).
FanDuel and DraftKings are both expected to get into the sports betting game. The companies believe their large pools of players, people who are already accustomed to betting money online, will provide them with an upper hand in the new sports betting arena.
FanDuel was acquired by UK betting behemoth Paddy Power Betfair last month. DraftKings has partnered with Resorts Atlantic City.