The imminent shutdown of DraftKings and FanDuel has been rumored for months. States have ordered them to stop taking bets from their residents only to have judges grant last-minute reprieves that extend operations only until the next round of legal proceedings.
At the same time, payment processors have severed ties with daily fantasy sports operators as the payment processors themselves have come under scrutiny from state and federal regulators for supporting allegedly illegal gambling activities. An inability to collect money across state lines could prove just as damaging to the daily fantasy business model as a court ruling banning daily fantasy in one or more states.
Why Bookies Might Worry About This News
The actions against FanDuel and DraftKings show that there is still political opposition to the idea of sports gambling. The sites seemed to combine two common parts of office and campus culture: fantasy sports and small wagers/office pools.
With these widespread activities being so hotly contested and public opinion seeming to favor the government regulators, it doesn’t appear there will be a push towards allowing sports bookmaking to expand any time soon.
Why Bookies Shouldn’t Worry
Unlike the big online sites, small bookmaking businesses have largely flown under the radar. Successful bookies have operated for years without any major regulatory challenges.
DraftKings and FanDuel mainly came under scrutiny because of the attention they brought on themselves by attempting to rapidly establish market share with aggressive television and Internet advertising campaigns. There are simply no signs that the government has any interest in going after small bookies.
How it Could Actually Help Bookies
While daily fantasy sports is a different model than traditional betting on game scores and other game states, the target audience is largely the same: sports fans who place wagers for entertainment purposes. In fact, the implied legitimacy that FanDuel and DraftKings gained by operating openly on the Internet while conducting a very public advertising campaign posed a direct threat to bookies.
Customers were funneling their spending away from bookies they felt were operating in gray areas to these supposedly “legitimate” sites. With daily fantasy sites apparently on the way out and no immediate threat to traditional bookmakers, bookies will be able to retake the market share they lost. They may also even see new business from customers who were first introduced to sports gambling by DraftKings and FanDuel.
How to Take Advantage of These Developments
With your business model safe, it’s time to start looking at how to capitalize on the new customer base created by the daily fantasy sites. One of the biggest lessons of their success is that bettors are looking for convenience.
Introducing online and mobile betting can greatly expand your reach and keep your customers coming back. By using a pay per head service as your betting platform, you can almost immediately launch with a ready-made, proven interface that will help you quickly grow your business.