Before the NFL moved one of its teams to Las Vegas and well before it considered hosting a Super Bowl there, DraftKings and FanDuel were leaders in the emerging world of daily fantasy sports (DFS). That is, until May 14, 2018, when the Professional Sports and Amateur Protection Act of 1992 (PASPA) was repealed, clearing the way for individual states to legalize sports betting.

Due to their yearslong investments in DFS, DraftKings and FanDuel not only had a huge foothold in the market for sports bettors, but also had the infrastructure to build the best sports betting apps.

Years later, the big head start has allowed the two companies to dominate the American sports betting market: According to the most recent data from research firm Eilers & Krejcik Gaming, in November, FanDuel controlled 35.77% of gross gaming revenue, while DraftKings controlled 33.54% — a staggering 69.31% of the total sports betting market share.

And yet, there’s one coveted legal betting state that the “Big Two” have yet to crack: the state where it all began.

Nevada has had legal sports betting longer than any other state, establishing it in 1949 along with all other forms of gambling. The jurisdiction and its epicenter in Las Vegas have built up a robust in-person sportsbook network. However, the state’s law dictates that any bettor wishing to use an online or mobile sportsbook must first register in-person at a physical sportsbook.

This makes it all but impossible for digital-age sportsbooks like DraftKings, FanDuel, ESPN BET and Fanatics to establish themselves in the Silver State without first investing millions of dollars in owning a resort casino there.

Furthermore, DraftKings and FanDuel aren’t even able to offer DFS in the state after the Nevada Gaming Control Board ruled in 2015 that the subsection of fantasy sports is actually gambling, rather than a game of skill, and thus requires a full gaming license to operate there.

While the NGCB would “not speculate on the future business plans of gaming licensees or potential applicants,” longtime residents of the Vegas’ sports betting scene seem to understand what is happening in the background.

“We’re still a cowboy town that’s controlled by some very powerful people,” professional sports bettor Bill Krackomberger told ESPN. “I’m not against it, I love it. But they just don’t want that competition of the DraftKings and FanDuels taking over.”

In-person sign-up requirements are not without precedent; Illinois and Iowa both had them in place during the early days of their legal sports betting experimentation, but dispatched with them in 2022 and 2021, respectively.

However, clearing that hurdle in those states likely would have been more of a priority for the big online books, especially in the case of Illinois, which brought in $73 million in sports betting revenue in November, trailing only New York ($151M) and New Jersey ($96M) according to the American Gaming Association’s most recent report.

Where did Nevada rank? Tenth, bringing in only $41 million in sports betting revenue for the month.

“People think the sports betting capital of the world is here in Las Vegas. Far from the truth,” Krackomberger said. “New York is now the boss … It’s kind of a rite of passage to be from New York and be a sports bettor.”

With Nevada accounting for 5% of national sports betting revenue and 1% of all online gambling revenue when including online casino games, being in Nevada “is not a must, not even close, for FanDuel and DraftKings,” said Eilers & Krejcik’s Chris Krafcik.

Smaller operations — such as Splash Sports, which largely focuses on DFS and pools — simply don’t see the value in trying to make a name for themselves in the nation’s most famous betting market due to the exorbitant barriers to entry.

“I don’t see the ability for even the largest incumbents to break through anytime soon,” said the company’s CMO Kyle Christensen. “And I don’t know that we need to. It would be nice to have, especially from a stance of having an experience. … But for the large part, I just don’t see anybody getting in anytime soon.”

Christensen understands that the established Vegas casinos have “earned their time in the sun,” but the old-money mindset could be having a negative effect on a sports betting landscape that is increasingly adapting to the digital age.

“You’ve always got to contend with the endemic local operators in a given market if you are pursuing access to that market from outside,” Gambling.com Group CEO Charles Gillespie told ESPN. “But this is fundamentally an issue of modernization of policies and regulations.”

As any veteran sports bettor will say, shopping around the market for the best line is a must if one wants to be a long-term winner. While that’s technically still possible in Las Vegas and some smaller apps even exist there, 21st century bettors are surely more accustomed to the convenience of simply pulling out their phone to shop, rather than having to schlep themselves around The Strip to find the best deal.

Krackomberger, for example, says he sometimes flies to other states to bet with DraftKings and FanDuel because he needs them “in [his] arsenal in order to be successful and have a higher ROI.” For avid sports bettors coming to Vegas for a long weekend with friends, not having the Big Two on the menu could be a disappointment.

“Who’s the loser? It’s the people of Nevada and all the tourists that go to Las Vegas,” Gillespie said. “It is anti-consumer, at the end of the day, to not allow people to be able to use more than one sportsbook when they’re in the American capital of gambling.”

In the meantime, the traditional and online sportsbooks alike will use the Super Bowl’s “obvious acquisition opportunity,” as Gillespie puts it, to gather more users into their empire: BetMGM and FanDuel are the only two sports betting companies confirmed to have ads during the big game.

With so many casual and potential new bettors watching — and a record 67.8 million Americans expected to wager on the event, per the American Gaming Association — the stalemate can wait a little while longer from the books’ perspective.

Source: www.espn.com