Why Casinos Should Be Embracing Daily Fantasy Sports

Posted By Juan Carlos Blanco on August 17, 2017 - Last Updated on February 27, 2019

[toc]The often tense relationship between casinos and daily fantasy sports (DFS), one that’s seen lobbyists for each frequently oppose each other in statehouses around the country in the last two-plus years, experienced a potential turning point this summer.

In mid-July, New Jersey’s Resorts AC and DFS operator Sports AD announced the rollout of the latter’s FastFantasy sports platform. It is an exclusive white-label offering branded as Fastpick. The deal makes the game available to the casino’s brick-and-mortar and online customers.

Resorts deal is a pioneering step

The offering of real-money DFS gameplay by Resorts – under an exclusivity agreement, no less – is the first such instance of merging two relatively disparate components of the gaming spectrum under one platform. This despite the fact that relatively unpublicized regulations allowing Garden State casinos to offer DFS tournaments within their facilities have been in place since 2013.

Prior to Resorts, no casinos capitalized on the provision. However, A3532, a bill the New Jersey Senate recently passed now just needs Gov. Chris Christie’s signature to be enacted. The bill legalizes DFS while also explicitly allowing casino licensees and licensed racetracks to partner with fantasy sports operators “to offer fantasy sports activities.”

The background on DFS-casino tensions

The source of most of the past animosity between the two industries has sometimes been classified as a form of “oversight envy”. The casino lobby frequently opposed to the classification of DFS as a non-gambling endeavor. That label typically serves to exempt it from the degree of regulation and tax obligations that money-based gaming activities face.

Additionally, representatives of both tribal and commercial casinos often express concern about the potential drag on profits the legalization of DFS would bring about. Some also emphasize possible violation of gaming compacts if states enact such laws.

However, with the DFS lobby generating significant momentum for legalization of the activity in a number of states over the last two years, casinos in those jurisdictions may soon start coming around to a “if you can’t beat ‘em, join ‘em” approach to partnering with operators. In that regard, Resorts’ decision may be groundbreaking in the short term—and a no-brainer in retrospect.

Is DFS a magnet for younger demographic?

One of the more widespread concerns of the casino industry in recent years has been the need to cultivate a younger demographic. The thought is younger customers will help ensure long-term survival. The generation currenlty coming of age grew up up exclusively consuming games online. Therefore, online games will be the norm moving forward. The fear of the industry relying primarily on an aging consumer base has become a prevalent one.

Other New Jersey casino operators being receptive to developing partnerships with DFS operators could thus be an unlikely but effective avenue towards addressing this concern. There are certainly healthy debates about how widespread DFS participation is. However, one inarguable aspect is the demographic it overwhelmingly attracts. That demo is young males with above-average incomes.

The Fantasy Sports Trade Association (FSTA) puts the number of those engaging in any kind of fantasy sports at over 59 million nationwide. Over 51 percent of those participants have an annual household income of $75,000 or greater. Their average age is 38.6 years. Those figures encompass both season-long and DFS players. They’re nevertheless relevant to the growing interest casinos have in hooking a younger audience.

Under-the-radar crossover appeal

In addition to potentially attracting new customers, a recent Rutgers University study on the habits of New Jersey gambling enthusiasts seems to indicate that offering a DFS product would enable casinos to also coax some of their existing clientele into bumping up the time and money they spend with them. Out of 336 individuals in the 1,500-person study who stated that they played DFS, 329 of them also conceded to playing gaming machines, bingo, table games, and wagering on horse racing and sports. Moreover, 84 percent of those are doing so once a week or more.

As the Resorts-Fastpick initiative demonstrates, casinos can present DFS offerings in a format that isn’t off-putting. It is a format DFS novices, avid season-long fantasy sports players, and sports fans in general can easily grasp.

Accordingly, Fastpick’s contests consist of up to 20 head-to-head virtual matchups between real-world athletes participating in a specific slate of games. The participant’s win or loss is fully dependent on the individual performances of the two athletes pitted against each other. Naturally, other DFS operators would likely put their own spin on a casino-based offering of their product. Presumably it would be with an eye on engaging as wide a gaming audience as possible.

Potentially Ideal Fit in a post-PASPA Landscape

Particularly in New Jersey, the benefits of offering a parlay-type DFS product that evokes traditional sports wagering may soon be even greater than what’s already been discussed. After all the U.S. Supreme Court is set to weigh in on the state’s quest to overturn the Professional and Amateur Sports Protection Act (PASPA). If the state succeeds, it can offer sports-based wagering within its borders.

A ruling favorable to New Jersey would clear the path for the eventual implementation of sportsbooks in casinos. Naturally, the synergy and participant overlap between DFS and traditional sports wagering could certainly be significant. Especially  if operators also opted to add such an option within the casino-based version of their product.

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Juan Carlos Blanco

Juan Carlos Blanco has served as a freelance writer for a wide variety of online publications and websites, with an intensive focus on fantasy sports. An avid daily fantasy sports player himself, he’s provided analysis and comprehensive coverage of the MLB, NBA, NFL and CFL, while also reporting on news and developments in the daily fantasy sports and online gaming industries.

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