- FanDuel has been named an ‘Official Sports Betting Partner’ of the National Hockey League (NHL) Buffalo Sabres.
- FanDuel is fighting for market share in the financially unsustainable New York sports betting market.
- FanDuel is the first online sportsbook to partner with the Sabres. Previously, the team had partnered with Seneca Resorts & Casinos, which operates ‘brick and mortar’ sportsbooks in New York State.
The high taxes and limited access of New York’s ‘Ponzi Scheme’ in the guise of sports betting continue to do big numbers–at least superficially. The reality is that the regulatory framework is such that it’s all but impossible to make money as an online sportsbook in New York. Throw in some unknown financial take from the state’s bizarre ‘consortium’ of sports betting companies under a few of the ‘legacy casino companies’, the highest advertising and marketing costs in the US, aggressive (and non-deductible) bonuses in a desperate rush to attract new customers and the icing on the cake, a downright untenable 51% tax rate.
How delusional are the companies in the New York State market? Check out this exchange from the recent DraftKings’ earnings call–analyst Michael Graham of Canaccord Genuity asked about how the company was dealing with the high tax rates in New York State. CEO Jason Robins’ only answer was talking about ‘some chatter of New York considering in this upcoming legislative session adjusting the tax rate down’. Because we all know that states–particularly a dysfunctional, revenue addicted state like New York–reduce the tax burden on businesses all the time:
There’s been some chatter of New York considering in this upcoming legislative session adjusting the tax rate down.
I think the approach we’re taking is a wait and see on that. And I think if that happens, depending on where it lands, then we’ll adjust accordingly. And if it doesn’t happen, then we’ll adjust accordingly. So I think we’re kind of taking a wait-and-see approach to this legislative session.
If New York State was smart they’d slice the tax rate to the bone. Actually, if they were smart they would have just copied New Jersey which is what they should have done to begin with. If New York was predisposed to making the making the state more conducive to the financial well being of companies that do business there, said companies wouldn’t be leaving the stater in droves.
If this is the only plan DraftKings has for dealing with a tax structure that has them giving more than half of their revenues to the state, things are going to get ugly. There’s no excuse for any business to be in a position where the only way they’ll legitimately be able to turn a profit is crossing their fingers and hoping to get some tax relief from state government. The state has already played the nine sportsbooks in the ‘consortiums’ for suckers just getting them to sign on to their dumpster fire of a regulatory framework–why would they stop now?
For the time being, sportsbooks continue to flush money and resources down the Empire State toilet. The latest is FanDuel–they’ve just been named an ‘Official Sports Betting Partner’ of the NHL Buffalo Sabres. The Sabres have a retail sports betting partner—Seneca Resorts & Casinos, which operates four properties in the state–but FanDuel is their first ‘mobile betting’ partner.
FanDuel gets the usual perks:
Today, the Buffalo Sabres and FanDuel Group announced a multi-year partnership, designating FanDuel as an official sports betting partner of the Buffalo Sabres and giving FanDuel the exclusive rights to include branding, sports betting odds, and promotions during Sabres broadcasts.
As part of the partnership, FanDuel will receive end-to-end broadcast integration exclusivity in all phases of Sabres broadcasts, including pregame, in-game, intermissions, and postgame. Sabres broadcasts will include FanDuel in sports betting segments during the pregame show and after the first and second-period intermissions. At the same time, real-time betting odds from the FanDuel Sportsbook will be integrated throughout the broadcast.
As part of the partnership, FanDuel will receive end-to-end broadcast integration exclusivity in all phases of Sabres broadcasts, including pregame, in-game, intermissions, and postgame. Sabres broadcasts will include FanDuel in sports betting segments during the pregame show and after the first and second-period intermissions. At the same time, real-time betting odds from the FanDuel Sportsbook will be integrated throughout the broadcast.
There’s at least some ancillary benefit in that they’ll get at least some promotion to the nearby Toronto market. Ontario is in the process of setting up what is so far a very impressive sports betting ecosystem. Not sure how many Ontario fans follow the Sabres since they’ve already got two teams in the province (the Toronto Maple Leafs and Ottawa Senators) but at least it’s something.
Mike Raffensperger, CMO of FanDuel Group, had these comments about the Sabres’ partnership:
“On the heels of bringing America’s #1 Sportsbook to the great state of New York, we’re excited to partner with the Sabres to infuse sports betting content into the hockey viewing experience. This is just the beginning for New York sports fans, and partnering with a fellow leader in the sports and entertainment industry lets us collaborate to take things to the next level.”
Dan Misko, Pegula Sports & Entertainment Sr., Vice President of Business Development, had these comments on behalf of the Sabres:
“We’re proud to expand our relationship with FanDuel and extend its engaging content to Sabres fans. FanDuel has built a strong reputation as a premier sports betting destination for sports fans, and we’re very excited for all that this partnership will offer our valued fans throughout the state of New York. We look forward to working with FanDuel for many years to come.”
The New York facing sportsbooks should offer a prop wager on which of the sportsbooks currently serving the state will cut bait and bail.
