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First Louisiana Daily Fantasy Sports License Approved

First Louisiana Daily Fantasy Sports License Approved article feature image

Sean Gardner/Getty Images. Pictured: Mercedes-Benz Superdome in New Orleans.

Louisiana daily fantasy players can set lineups through a legal provider as early as Friday after DraftKings earned the state’s first DFS license earlier this week.

DraftKings had not publicly announced a launch date as of publication, but this week’s licensure approval all-but guarantees the DFS giant will accept players ahead of the lucrative football season. Rival FanDuel is also expected to launch its DFS product in Louisiana before the fall.

Louisiana was among the last states where the nation’s leading DFS providers didn’t operate.

“As DraftKings continues our nationwide expansion, we welcome Louisiana to the DraftKings family, an area rich with culture, heritage, and die-hard fanbases in both professional and college sports,” said Matt Kalish, co-founder and president of DraftKings North America, in a statement. “The Bayou will now have access to our world-leading Daily Fantasy Sports product as we ramp up toward the kickoff of football season.”

Details and Background

Louisiana is the first state to approve DFS sites on a parish-level basis. The majority of Louisiana parishes, the state’s county equivalent, will allow DFS operators. That includes all parishes in and around Baton Rouge, New Orleans, Shreveport and most of the state’s population centers.

This week’s licensure announcement comes nearly three years after voters in most parishes backed DFS legalization on the fall 2018 ballot.

Daily fantasy sports became a political football in a complex legislative quagmire that at one point would have seen Louisiana allow DFS games on physical video lottery terminals. No other state permits DFS on these machines and Louisiana’s enactment legislation failed to pass in 2019.

It wasn’t until a special legislative session in summer 2020 that the DFS measures passed the legislature as part of a broader package of gaming legislation, including a bill that placed a sports gambling referendum on the 2020 ballot. State officials then had to promulgate further daily fantasy provider rules and license each company, a process that took more than a year.

Louisiana’s daily fantasy laws and regulations will create an avenue for major providers such as DraftKings and FanDuel, they could be cost-prohibitive for many smaller companies. Former Fantasy Sports & Gaming Association Chair Peter Schoenke called the $15,000 investigation fee the “most problematic” aspect.

With other state regulations, operating costs, taxes and additional expenses, it’s hard for smaller operators to make a net profit and comparatively steep fees like Louisiana’s make that even more difficult, Schoenke said. He said this could limit Louisiana to only three total operators.

“Louisiana residents now have the ability to enter paid fantasy sports contests, which caps a decade-long quest for the fantasy industry,”  Schoenke said in a message to the Action Network. “However, the state’s current regulations are too costly for most smaller operators and we hope for improvements to allow more of our member companies to offer contests in the Bayou State.”

Sports Betting Expected in Fall

Louisiana’s DFS launch comes a few months before the state’s retail and online sportsbooks go live. Like the 2018 daily fantasy ballot measures, voters in the majority of parishes (including all the most heavily populated) backed a 2020 retail and mobile sports gambling legalization referendum.

Most if not all of the state’s 20 total horse tracks, land-based and riverboat casinos are expected to open retail sportsbooks at their respective properties. Each aforementioned facility can also open two online sportsbooks apiece, though it may take years for all 40 potential digital books to go live.

Eligible bettors age 21 and up can remotely register, deposit and wager from a mobile device in any parish that approved the 2020 referendum. Bettors do not have to register in person at a gaming facility beforehand.

Along with DraftKings and FanDuel, which have capitalized on existing DFS player databases to promote their respective sportsbook products in other states, many current Louisiana gambling stakeholders are expected to launch retail and mobile sportsbooks. That includes Caesars, which operates the state’s lone land-based casino in New Orleans, as well as Penn National (Barstool), Churchill Downs (TwinSpires) and Boyd (B Connected).

Regulators are working toward a September 2021 launch, though no date has been finalized yet. Still, the legislative and regulatory turnaround should be far quicker than the drawn-out DFS approval process.

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