Although FanDuel is the undisputed leader in most U.S. markets, DraftKings is the sportsbook of choice in its home state of Massachusetts according to recent Q1 reports submitted by the Bay State’s six online sports betting operators.
DraftKings Crown Competition
Boston-based DraftKings continues to dominate its home turf, with FanDuel coming in a distant second place according to Q1 revenue reports submitted to the Massachusetts Gaming Commission (MGC). There are six operators in the Massachusetts sports betting market with BetMGM, ESPNBET, Caesars and Fanatics trailing DraftKings and FanDuel by a wide margin.
The first three months of 2024 showed the following revenue reports for the market’s six mobile operators.
- DraftKings: $91,855,541 in Q1 total revenue
- FanDuel: $54,351,010 in Q1 total revenue
- BetMGM: $10,127,132 in Q1 total revenue
- ESPN BET: $6,585,180 in Q1 total revenue
- Fanatics: $3,148,459 in Q1 total revenues
- Caesars: $3,129,923 in Q1 total revenue
Both ESPNBET and Fanatics are new to the Massachusetts sports betting landscape and have already overtaken Las Vegas gaming icon Caesars. DraftKings and FanDuel had nearly identical hold rates at 10.2% and 10.25%, respectively.
Limits on Winning Bettors
The topic of sportsbooks limiting winning bettors is somewhat opaque as the operators don’t openly comment on the practice. However, it happens frequently and not only to professional sports bettors. There are plenty of instances of recreational bettors whose betting limits are suddenly reduced despite those same bettors historically losing money to the books.
The matter has aroused concern from the Massachusetts Gaming Commission, which prompted them to convene a roundtable discussion on the practice. Unfortunately, none of the operators attended, citing proprietary risk management strategies. Only FanDuel addressed the issue stating it would meet in private but the MGC decided against it due to a lack of transparency with the public.
Tax Changes Proposed (and Rejected)
State Senator John Keenan, who proposed a tax hike on the state’s mobile sportsbooks from the current 20% on adjusted gross revenues to an industry high of 51% like New York, made his displeasure with the lack of attendance known.
“Basically, they thumbed their nose at the gaming commission. That’s the industry that we’re dealing with here in Massachusetts, an industry that is making far more money than they ever expected, and far more money than we expected them to make at this point,” said Keenan.
Keenan’s proposal to raise taxes on the sportsbooks was quickly voted down but the issue of sportsbooks limiting winning customers is a cause for concern. If customers believe that the rug will be pulled from underneath them once they hit a hot streak, it could have a dampening effect on the industry as a whole. It could also drive recreational bettors to unregulated sports betting sites that do not pay taxes, nor are the bettors’ winnings made known to the state.
At the meeting between the Massachusetts Gaming Commission and the operators earlier this week, MGC Interim Chair Jordan Maynard subtly mentioned the topic by saying, “I will ensure that FanDuel and any other operator know that each commissioner will need to be updated in a way that is transparent and fully compliant with the open meeting law. That said, I wanted to acknowledge that reach out and I’m hopeful for the future as our learning on this issue continues.”
The next MGC hearing is scheduled for June 20th.
