Written by Chris Monti•
FanDuel Launches $80m Free Bet Giveaway to Celebrate Return of Sports
FanDuel is giving away more than $80 million worth of free bets to mark the return of the major sports leagues. All existing customers have had $10 bonus credit added to their accounts this week, and new customers can also take advantage of the offer. The sportsbook said the free bets would top the $80 million mark, which suggests that FanDuel is determined to establish itself as the number one online sportsbook in the country. Customers must use the free bet by August 2 or it will be voided.
FanDuel has launched a TV commercial to run alongside the promotion, and it is gearing up for an almighty battle to seize market share when the major leagues return. “We are excited for the return of sports and wanted to give all of our customers a chance to get in on the action for free,” said chief marketing officer Mike Raffensperger. “Putting more than $80 million in site credits into our customers’ accounts to enter DFS contests or to make legal sports bets is a thank you to our customers for their loyalty during this long stretch without the NBA, NHL and MLB.”
A truncated MLB season is now underway, and the NBA season resumes in Orlando on Thursday, July 30, followed by the expanded NHL playoffs from August 1. The NFL will begin as initially planned in September. It marks the end of a four-month hiatus for the sports leagues. Sportsbooks have scraped by with plenty of markets on everything from soccer, UFC and Nascar to marble racing, hot dog eating contests and Ukrainian table tennis, but now they are finally expecting business to return to the levels seen before the coronavirus pandemic.
The Race for Supremacy
FanDuel has already established itself as the market leader in New Jersey and Pennsylvania. Parent company Flutter Entertainment, formerly known as Paddy Power Betfair, recently completed a multibillion-dollar takeover of The Stars Group, creating the world’s largest online gambling company. Flutter now controls the FanDuel and Fox Bet brands as key it bids to dominate the burgeoning US sports betting sector.
However, it faces stern competition, as this interesting breakdown from Howard Jay Klein at Seeking Alpha explains. He believes William Hill is the best company to invest in, as it has a strong base of 100 retail sportsbooks in Nevada, and it has tied up a deal with leading casino operator Caesars Entertainment Inc. to expand across the country. However, he rates Flutter as the second-best firm to invest in, and qualifies that by mentioning that Flutter is only in second place because its share price is much higher than William Hill’s.
DraftKings, which recently merged with white-label sportsbook provider SBTech and a special purpose acquisition company before going public, finished third in this hypothetical race towards share price increases. William Hill has spread its tentacles to almost every state with legal sports betting and it powers monopoly operations in Delaware and Rhode Island, but DraftKings looks like FanDuel’s strongest challenger in the battle to become the top online sportsbook brand in the country. They hold the top two places in several states, and they have been long-term rivals since their DFS days.
DraftKings Announces SBTech Migration
DraftKings is now planning to end its relationship with Kambi by Q3 2021 and migrate to the SBTech platform. The news was expected, as it would not make sense for DraftKings to merge with SBTech and then continue to use a rival white-label provider to power its sportsbook. Customers will notice a significant difference when the migration is complete, but both Kambi and SBTech provide exceptionally strong sportsbooks, so it should not affect DraftKings unduly.
“Since partnering in June 2018, the Kambi-DraftKings relationship has proven to be highly rewarding for both parties, delivering first-class sports betting experiences to players across more states than any other sportsbook, and establishing Kambi and DraftKings as true leaders in their respective fields,” said Kambi chief executive Kristian Nylen. “The agreement we’ve announced today works to secure a strong revenue stream for Kambi for the next 15 months, while our growing and exciting portfolio of partners leaves me with no doubt that Kambi is well placed to extend its leadership position over the months and years to come.”
Kambi powers sportsbooks at the likes of 888 Sport, Unibet, Penn National, Rush Street Gaming and Parx in the US, so any DraftKings players that want to continue enjoying the huge range of sporting events it covers could switch to one of those operators. Yet DraftKings will be sure to provide its customers with plenty of compelling reasons to stay loyal to the brand. It is flush with cash after the three-way merger, and it will be interesting to see how it responds to FanDuel’s $80 million bonus giveaway.
Illinois is the next frontier for DraftKings and FanDuel. It is one of the three largest states permit online sports betting, along with Pennsylvania and New Jersey, and its industry is just getting started. However, Illinois imposed an 18-month “penalty box” ban on DraftKings and FanDuel, meaning they should not be able to gain a license until December 2021. Officials said this was punishment for offering DFS in the state when it was technically, but the DraftKings and FanDuel called it a cynical ploy to give local operators a head start.
Now they are working on creative solutions to skate around the penalty box. DraftKings, FanDuel and spread betting operator PointsBet all received temporary sports betting licences last week after Gov. J.B. Pritzker signed an emergency order allowing online sportsbooks to launch without the need for in-person registration. Illinois has not made much tax revenue from sports betting during the pandemic, and Pritzker is keen to kick-start the industry.
Rush Street quickly became the first to market when it launched BetRivers online in June. DraftKings has now tied up a deal with Casino Queen in Illinois, which will see the sportsbook there rebranded as DraftKings at Casino Queen. DraftKings said this partnership should allow it to launch in Illinois, while FanDuel is still seeking a land-based partner team up within a similar agreement. It means that both operators could go live in Illinois in the coming months, giving them another lucrative battleground upon which to compete for supremacy.