The Missouri Gaming Commission on Friday morning awarded its first two sports betting licenses, and the announcement was an upset — at least to observers.
The commission awarded stand-alone mobile sports betting licenses to Circa Sports and DraftKings, leaving FanDuel to pursue a tethered license next month. FanDuel can access via a market-access partnership with one of the state’s existing retail casinos or six qualified professional sports teams.
The MGC is set to launch sports betting Dec. 1.
“We are incredibly excited about the state of Missouri and everything it has to offer from a sports betting perspective, which is why winning the untethered license and being able to gain market access at favorable rates that align with our model such a huge victory,” Circa’s Director of Operations and Race and Sportsbook Jeff Benson told InGame via email Friday morning. “We can continue to bring ‘sports betting the way it should be’ to all in the great state and continue to operate our low hold/high volume model in a manner which is helpful to bettors.”
While an untethered license is twice as expensive as a tethered one — $500,000 vs. $250,000 — untethered licenses do not have to pay an additional fee to a market-access partner. Traditionally, if a platform enters a jurisdiction via an agreement with a casino or sports team, it must pay that entity for the right, which means lower profit margins. Circa founder Derek Stevens told the MGC Wednesday during a presentation that his company has a lower hold percentage — about 3.5% vs. about 10% — than the bigger, national companies. That would mean lower profit, as well, for a company that caters to high-limit bettors.
The three companies made presentations Wednesday, and at the time Stevens clearly believed that his company was the underdog against the two most successful sports betting companies by market share across the U.S. But he promised the commission that his sportbook would bring something unique to the state.
“There’s no question that we are a much smaller company than your other presenters today and, if you look at what company will provide the most amount of taxable revenue to the state, we can’t compete,” Stevens said. “But we will attract a different kind of customer.”
Circa is a boutique sportsbook, and its digital betting platform is live or licensed in five U.S. jurisdictions compared to at least 20 each for DraftKings and FanDuel.
Next application deadline is Sept. 12
Ahead of the announcement, commissioners commented that they felt the staff did deep research and fully prepared them to make the decision. Several commented that they thought a fair decision was reached. There was no discussion before the announcement was made.
FanDuel still has a clear pathway to access in Missouri. The deadline for applying for the 19 tethered wagering licenses that remain is Sept. 12, and the company has a long-standing partnership with Boyd Gaming that is intact after parent company Flutter bought back Boyd’s shares of FanDuel earlier this year. The difference is that market access via a partnership means that the sportsbook has to pay the partner, often via a revenue share, which means less profit.
“We appreciated the opportunity to present to the Missouri Gaming Commission and respect their decision,” a FanDuel spokesperson told InGame. “We look forward to bringing our leading sportsbook product to Missouri residents.”
Underdog Sports previously applied for a tethered digital license, and Fanatics Betting & Gaming has already applied for a tethered retail and digital license. Neither company has announced who their partner will be. BetMGM has not yet applied but has announced market access via a partnership with Century Casinos.
