MLB has added FanDuel Group to its growing portfolio of authorized sports betting providers, evidence that its controversial strategy of tying the sportsbook sponsorship category to the purchase of the league’s official data feed continues to gain traction. FanDuel joins MGM Resorts and DraftKings as “authorized gaming operators,” giving them access to MLB’s official data feed and league and team logos, as well unlocking opportunities for sponsorship deals and promotional opportunities with MLB clubs in states that allow and regulate sports betting. MGM’s status as “official gaming partner” makes it the only sportsbook that can market through MLB channels, such as its web site. This is the first deal between FanDuel and MLB, which held a stake in daily fantasy competitor DraftKings and promoted that company’s daily fantasy product exclusively. Execs from MLB and Fan Duel declined to discuss financials, but confirmed that the structure remained as it was when MLB began negotiating with sportsbooks earlier this year. Multiple sources have said MLB’s commercial payment structure for data approximates the 0.25% royalty it sought when lobbying state legislators.
LOCAL DEALS BIG FOR FANDUEL: FanDuel already is the leading sportsbook in New Jersey, and the company earlier this month launched its sportsbook app in Pennsylvania. That allowed operators to take bets online beginning in June. Pennsylvania is the only state with broadly available sports betting that is home to MLB teams. “The local deals are critical for us,” said FanDuel President & COO Kip Levin. “Last year it was all about New Jersey. This year we’re expanding into new regions. But our marketing approach with sports betting still is very much about local media, local partnerships, local buying. We’re still a ways away before we’ll be looking at the national level in terms of media spend. So the ability to have access to the local assets -- whether its teams or regional sports networks or whatever it might be -- is critical as we’re rolling sports betting out.”
OFFICIAL DATA SEEN AS INTEGRAL: Though there has been debate around the value of real-time official data in an emerging U.S. market, Levin said FanDuel sees it as integral to providing the best consumer experience possible for in-play wagering, which now accounts for about half the sportsbook’s business in New Jersey. “There’s a lot of games (in baseball), with a lot going on,” Levin said. “We still have people monitoring and watching. But (official data) really makes the end customer experience much, much better, because you have less need for manual intervention of somebody pausing a market. In play markets can go on and off and on and off depending on what’s happening. So if you’ve got the live data feed, the percentage of time you can take live bets is much, much higher. Building the best customer experience has always been core to our strategy. So it very much dovetails well with that.”
KEY TO GETTING MARKETING SUPPORT: While MLB’s insistence that sportsbooks use official data in order to gain access to the marketing support of the league and its teams has been a lightning rod, its policy is not at all unique in the U.S. The NBA has taken a similar stance, and the NFL is expected to do so if and when it allows teams to sign sportsbook sponsorships. “To me, things are right on schedule,” said MLB Exec VP/Gaming & New Business Ventures Kenny Gersh. “At the beginning of the season, I was still working with regulating authorities, figuring out how to best structure these deals. Then we started having discussions with all the operators. DraftKings and FanDuel were both quick to recognize the value of these partnerships. We now have both of those done and we’re deep into the contract stage with several other operators."