Sports Betting News: DraftKings’ Latest Moves Reaffirm Nevada Investment

Sports Betting News: DraftKings’ Latest Moves Reaffirm Nevada Investment article feature image

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DraftKings will open a major new office in Las Vegas, bringing more than 1,000 employees to Nevada by 2022, the company announced Monday. One of the nation’s two highest-grossing sports betting operators by handle, DraftKings has steadily grown its presence in Las Vegas despite not operating a sportsbook in Nevada.

Monday’s announcement doesn’t in and of itself bring a DraftKings sportsbook closer to reality, but it shows the daily fantasy sports operator turned sports betting giant remains committed to Las Vegas and Nevada overall.

Though its total U.S. handle share continues to plummet as more states legalize sports betting, Nevada nevertheless remains one of the highest-grossing sports betting states as well as a symbolically important jurisdiction for regulated gambling.

“Our new office space and Las Vegas expansion further exemplifies DraftKings’ investment in its employees and the future of the company, as well as the local community,” said Matt Kalish, DraftKings North America co-founder and president, in a statement Monday.

“Our goal is to create another world-class workplace environment that will foster DraftKings’ innovation, further bolster our local presence, and deepen community involvement.”

Photographer: Andrew Harrer/Bloomberg via Getty Images. Pictured: The "Welcome to Fabulous Las Vegas" sign

Las Vegas Details

DraftKings’ new 90,000 square-foot Las Vegas office will be the company’s second-largest after its Boston headquarters. It will take up most of one building at UnCommons, a new, 40-acre mixed-used workspace in Southwest Las Vegas.

The company has increased its Las Vegas presence by 400% since opening its initial Nevada office in January 2020. Since then, DraftKings has become the primary sponsor for UNLV’s Center for Gaming Innovation and also opened its Gaming Innovation Studio at the university.

Nevada is one of the few remaining states where DraftKings doesn’t offer daily fantasy sports. DraftKings and FanDuel stopped offering daily fantasy contests in the state after Nevada officials required daily fantasy operators need to be licensed similar to sportsbooks or other gambling entities. The DFS leaders have long maintained that daily fantasy sports contests are not forms of gambling.

Earlier Moves Opens Nevada Sports Betting Door

DraftKings earlier this year announced it would acquire Golden Nugget Online Gaming, the digital gaming operator associated with the venerable casino brand. As part of a larger deal, the companies announced sportsbook partnerships for Golden Nugget casinos, though details remain vague.

The Golden Nugget along downtown Las Vegas’ Fremont Street would appear to be the likeliest location for the first-ever Nevada DraftKings sportsbook. Golden Nugget also operates a casino in Laughlin, Nevada, near the Arizona border.

The partnership could also be an avenue for a DraftKings sportsbook in Louisiana, where Golden Nugget operates a casino in Lake Charles. There are current or planned Golden Nugget Casinos in Mississippi, New Jersey and Illinois, though DraftKings already has a sports betting presence in each state.

Nevada Future Uncertain

These moves aside, DraftKings has still not announced Nevada sportsbook plans.

The Golden Nugget deal has not yet passed all still final regulatory approvals. Those measures, as well as the physical infrastructure necessary for a new retail sportsbook and the digital requirements of a mobile app, would take months to complete even if an opening was announced Monday.

A potential DraftKings Nevada sportsbook would then have to compete with several national rivals as well as an already crowded sports betting marketplace.

BetMGM signs are nearly ubiquitous along the southern part of the Las Vegas strip dominated by MGM resort casinos. Caesars, which too has a massive physical presence along the Strip, is investing hundreds of millions of dollars rebranding and promoting its eponymous sportsbook, which has had the most physical locations in the state since when it was under the William Hill name.

There are also multiple established local digital and retail operators such as Circa, South Point, Station (STN) and Treasure Island. That’s on top of other national sportsbook operators already with a Las Vegas casino partner such as WynnBet that could also open a digital book.

Additionally, assuming DraftKings opens retail books solely at Golden Nugget properties, that leaves only two options to meet the state’s in-person registration requirements, far fewer than most other would-be competitors. DraftKings has typically been one of if not the highest-grossing operator in more than a dozen states it offers sports betting, but it remains to be seen how Nevada’s in-person sign-up rules would curtail customer participation.

That same registration mandate is a key factor why many of DraftKings’ competitors in other states have not entered Nevada. FanDuel, the nation’s largest operator by market share, as well as Barstool Sports, BetRivers, PointsBet and many other top national brands have not followed a similar acquisition path or partnership on a Nevada property like the Golden Nugget deal.

Bottom Line

DraftKings has already invested heavily in Las Vegas and will only increase that commitment with the massive new office. Another big investment via a DraftKings sportsbook in downtown Las Vegas and/or accompanying statewide mobile app is likely far more valuable as a symbol of the company’s role in the larger U.S. gambling market than it would be from the money the book takes in itself.

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