Most people watching developments in Missouri would likely have expected FanDuel and DraftKings to be awarded the state’s two untethered sports betting licenses. They were half right.
At a brief meeting on Friday, Aug. 15, the Missouri Gaming Commission (MGC) awarded one of the pair of direct licenses to DraftKings, yes, but gave the other to Circa Sports.
Those two sportsbooks, a market leader and a comparatively small-fry player, will be the only two operators who do not have to partner with an in-state casino or pro sports team in order to offer online sports wagering when the market opens on Dec. 1. Untethered licenses are twice as expensive as tethered ones, at $500,000 versus $250,000, reflecting the fact that no revenue-share agreement is necessary.
The decision meant that FanDuel, which spent millions of dollars alongside DraftKings on campaigning for Missouri voters to approve sports wagering last year, would have to find itself a partner like all other sportsbooks hoping to enter the newest U.S. sports betting market. Within hours of the MGC meeting on Aug. 15, it announced a market access agreement with Major League Soccer team St. Louis CITY SC.
Untethered licenses are twice as expensive as tethered ones, at $500,000 versus $250,000, reflecting the fact that no revenue-share agreement is necessary.
In a statement to SBC Americas, Circa Sports CEO Derek Stevens said receiving one of the first two licenses is “a great honor.”
“We came in as the long shot against national giants like DraftKings and FanDuel, but our licensure approval today proves there’s room for a different kind of operator,” Stevens added.
‘Small potato’ grows roots
Before handing out the licenses, MGC said it would consider aspects such as the respective applicants’ existing U.S. operations, their ability to generate revenue for the state, their marketing spend and customer acquisition processes and their responsible gambling measures before making its selections.
The commission listened to all three applicants state their cases at a meeting on Wednesday, Aug. 13. In Friday’s decision meeting, MGC Chair Jan Zimmerman noted that all three applications and presentations were “outstanding.”
While FanDuel and DraftKings leaned heavily on their market-leading status, huge betting handles and revenues nationwide and their existing daily fantasy sports operations in Missouri, Stevens called his company a “small potato” that could make a big difference. “But I do think we bring something very unique and beneficial to the state of Missouri,” he added.
He added to SBC Americas on Friday that Circa Sports offers sharp odds, high limits and a low hold. He said in Wednesday’s MGC meeting that his sportsbook can attract “a different style of bettor” to Missouri’s market, noting that 95% of his sportsbook’s handle comes from bets that are worth more than $50.
“We’re going to attract people who are currently betting offshore who are not going to go and bet into a 14 or 16% hold market,” he told commissioners. “We’re going to provide the value that’s really unprecedented. We’ve seen this in other states.”
Show-Me what you’ve got
While FanDuel and DraftKings, America’s No. 1 and No. 2 online sportsbooks by handle and revenue, projected hundreds of millions of dollars in gaming revenue, equating to tens of millions of dollars for the state, Stevens did not offer a revenue-generation estimate. Instead, it seems commissioners were won over by his arguments and Circa Sports’ touted differential qualities.
Stevens told the room on Wednesday that Circa has existing contact with 81,000 Missouri residents through its Club One loyalty program.
“We’re ready to be an active part of the community, from local events to supporting youth sports,” Stevens added to SBC Americas. “We didn’t win by trying to be the biggest. We won by staying true to who we are, and I want to thank the Missouri Gaming Commission for recognizing that and giving us the opportunity to bring the Circa Sports experience to the State of Missouri.”
Howdy, partners
To recap where things stand with Missouri’s upcoming online sports betting market, we also know that Underdog and Fanatics have applied for tethered licenses, although they have not revealed who their partners will be.
Elsewhere, as well as the FanDuel-St. Louis CITY SC alliance, the St. Louis Cardinals have been snapped up by Bet365 and BetMGM has partnered with Century Casinos. Meanwhile, Caesars, Bally’s and ESPN Bet owner PENN Entertainment all operate land-based casinos in Missouri that give them a clear path forward.
In total, the MGC can issue up to 14 online and up to 19 retail sports betting licenses and will allow each in-state pro sports team and land-based casino to obtain one of each.
