When Circa Sports was awarded one of just two untethered operator licenses in Missouri’s new sports betting market, chosen alongside DraftKings and ahead of FanDuel, the decision was heralded as a win for the little guy.
Does Founder and CEO Derek Stevens mind that onlookers framed it that way?
“I love it,” Stevens told SBC Americas. “A handful of people asked me at the time, ‘Are you intimidated about going in against these two big companies?’ I said no, not really. I mean, what do we have to lose? No one expects us to win. The pressure’s not really on us, it’s on the other guys because no one expects us to get one. And if we do, then holy smokes, that’ll be a big upset.”
Sometimes, even long shots come in.
Onto a winner
As Missouri sports betting launches on Monday, Dec. 1, Circa is the clear outlier in size and operating model. Even the news that it was pitting itself against the two biggest sportsbooks for a direct license may have surprised some.
For Stevens, though, taking the long shot was all part of playing the long game.
“Why wouldn’t we try to go after it?” he mused. “What are we going to do? Not get it and feel bad? The pressure’s not on us, so I said, ‘let’s go do it.’
“I was a bit surprised no other companies went for it. I thought it would be worthwhile for us, because it would help accelerate our application process and my ability to meet with some of the commissioners and regulators. Obviously, we were the very, very big long shot. I felt, though, that our story was unique, and that if I was able to get it out there, if nothing else, it would help build our brand in Missouri for when we would potentially launch with a partner.”
Had the Missouri Gaming Commission (MGC) overlooked Circa for the express pass and required it to apply for a tethered license, that partner would have been the St. Louis Blues. The NHL team has since partnered up with DraftKings and Underdog, although the latter of those will not be offering state-regulated sports betting in Missouri.
“We were going to do something with them one way or the other,” Stevens acknowledged. “We’ve subsequently signed a sponsorship agreement for TV advertising and a number of other things with them.”
Missouri loves company
While FanDuel, DraftKings, and third-place challengers like BetMGM, Fanatics and bet365 pursue similar operational approaches, Circa uses a different playbook. In a world of parlays and in-play betting, Stevens’ company focused on higher-stakes bets, lower hold aspirations and providing an experience that others don’t.
That was the core of Stevens’ successful presentation to the MGC in August. He spoke last that day, after FanDuel and DraftKings pointed to their nationwide scope and revenue numbers, fantasy gaming footprints in Missouri, and existing relationships with leagues and teams.
“I figured that both of their presentations would be very similar, almost identical,” Stevens recalled. “I felt that the way we would have a chance to win it would be to differentiate ourselves.”
He believes that’s precisely why they were chosen. The MGC did not publicly disclose the factors that determined their decision, but Stevens has been approached by multiple members of the state regulatory body since to check in on Circa’s plans. “I’ve gotten a bit of feedback and that has been oriented around the fact that our presentation was different.”
There’s also the fact that Circa’s model is uniquely catered to whales. Gamblers who are used to betting, say, thousands of dollars at a time would be unlikely to convert from the black market to a FanDuel or a DraftKings, suggested Stevens. That’s where Circa comes in.
“We’re not going to be the biggest in any way, but for citizens of Missouri who are accustomed to betting $1,000 a game, $5,000 a game, $10,000 a game, we’ll do a really good job for them,” Circa’s founder noted. “We’re going to bring some different people into the legal market, and I’ve been told that had a pretty big impact on the regulators.
“I’m a believer that a lot of Americans want to bet legally, but there’s not a good option for them. And I think we presented to Missouri the fact that we’re their option.”
Meet me in St. Louis
Missouri is Circa’s sixth online betting state, and just the third in which it does not have a land-based gaming presence. Unlike the likes of Caesars, PENN Entertainment’s theScore Bet, Century Casinos partner BetMGM and Boyd Gaming tether Fanatics, Stevens’ company isn’t hosting retail sports wagering at an in-state casino.
On the ground all day long in Missouri for Monday’s launch day, Stevens and the Circa team will hold an event at the St. Louis Blues game that evening for the state’s first major sporting event under the legal sports betting model. “We’ll be pretty busy for 24 hours,” he laughed. “That’s how we’d want it.”
A common theme among Circa’s six online sports betting states is that they all have comparatively low tax rates, reducing the barrier to entry for a sportsbook of the size and model of Circa. That was a key appeal of Missouri for Stevens and Co., and would be a major factor in any thoughts of the brand’s further expansion across the U.S.
“We really want to focus on areas where we think our model can work, and that is states that have a strong regulatory environment with a low-tax scenario,” Stevens concluded. “We are not interested in New York or other markets where you really need to run 14, 15% hold. We’re not going to change our business model. We want to stay true to our brand.”
Missouri’s regulators certainly liked what they saw. Now Missouri bettors get to take a look, too.
