Las Vegas casinos have had the market cornered on sportsbooks in the city and state thanks to a 2015 law that banned daily fantasy sports operators in Nevada.
In October of that year, the Nevada Gaming Control Board issued a notice for FanDuel, DraftKings (DKNG) - Get DraftKings Inc. Report and any other daily fantasy sports operator to cease operations in the state.
The NGCB ruled that DFS is a game of luck not skill, so it constitutes gambling under Nevada law. Companies wishing to operate in the state need to be licensed like all other gambling operations in the state.
It took until 2021 for DraftKings and FanDuel to file for a gaming license, and there has been little movement in the application process, according to reports.
“The DraftKings application is still in process,” Michael Lawton, the agency’s senior economic analyst, told the paper. "The Nevada Gaming Control Board does not anticipate that it will be on the May agenda and the board will hear it at a later date, but only when the investigation is complete.”
However, DFS companies have been positioning themselves to operate in the state sooner rather than later.
DFS Makes Inroads in Vegas
This week both FanDuel and DraftKings made progress towards getting a foothold in Sin City.
The sportsbook at the Fremont Hotel Casino in downtown Las Vegas could soon be rebranded as the FanDuel Sportsbook, officials with Boyd Gaming (BYD) - Get Boyd Gaming Corporation Report, the casino's operator, told the Las Vegas Review-Journal.
But even this rebrand is subject to regulatory approval. FanDuel is expected to seek licensing regulatory approval at one of the meetings this month, which are scheduled for August 10 and August 25.
Boyd, which owns 5% of FanDuel, sees about $30 million annually from its partnership with FanDuel, which operates Boyd's retail and online sports betting outside of Nevada.
Meanwhile, DraftKings expects to close its $1.56 billion acquisition of Golden Nugget Online Gaming by the end of next month, according to the Independent.
DraftKings is also facing regulatory hurdles as it continues to "pursue the remaining regulatory approvals necessary," according to an SEC filing Friday.
But since neither DraftKings nor Golden Nugget Online Gaming is licensed in Nevada, those hurdles are not coming from the state's gaming regulators.
DraftKings purchased 90,000 square feet of office space inside the UnCommons complex in southwest Las Vegas that will employ more than 1,000 workers in October.
DraftKing Jumps on Earnings
Shares of DraftKings jumped double digits Friday after the company raised its revenue and EBITDA expectations for the year.
DraftKings now expects revenue between $2.08 billion and $2.18 billion for the year, up from its previous projection of between $2.05 billion and $2.17 billion.
The company now expects EBITDA ranging from -$765 million and -$835 million, up from its previous expectation between -$810 million and -$910 million.
“Customer engagement remains strong, and we continue to see no perceivable impact from broader macroeconomic pressures,” said CEO Jason Robins.
Revenue in the quarter rose to $466 million, a 57% year over year increase that topped analyst estimates of $438 million.
The company saw a 30% increase in monthly unique paying customers to 1.5 million. That total missed analyst expectations of 1.7 million. However, average monthly revenue per player rose to $103 in the quarter from $80 a year ago.
DraftKings reported a net loss of 80 cents per share vs Wall Street estimates of a loss of 76 cents per share.
DraftKing shares were up 11.3% to $18.21 at last check Friday morning.