- DraftKings has a monopoly over retail and mobile sports betting services in the state of New Hampshire.
- The New Hampshire Lottery Commission has oversight over sports betting in the state.
- In return for monopoly status in the state DraftKings pays the NH Lottery Commission 51% of mobile gaming gross revenue and 50% of retail betting gross revenue.
DraftKings opened the second retail sportsbook in the state of New Hampshire late last week. The new location is in Manchester at the South Side Tavern. The state’s first retail sportsbook opened last month at The Brook in Seacoast. The Brook is a former greyhound racing track that is owned by Nevada based Eureka Casino Resorts. The company also owns the Eureka Casino Resort in Mesquite and the Eureka Casino at 595 East Sahara Avenue in Las Vegas.
New Hampshire is known for their license plate catch phrase ‘Live Free or Die’. Unfortunately, that philosophy doesn’t apply to sports betting in the state despite The Brook’s clever domain name of ‘livefreeandplay.com‘ . It’s all monopoly all the time in New Hampshire with the lottery splitting the pot with DraftKings. The terms of their agreement have produced a de facto tax rate that borders on comical:
DraftKings will pay the lottery 51% of gaming gross revenue for mobile and 50 percent of gross revenue from retail locations.
Under the highly restrictive terms of the state’s sports betting regulations the lottery could have chosen up to five operators but instead worked out a deal with DraftKings for the absurd split of the revenue. Can’t say I blame DraftKings–hard for a company to argue with getting monopoly status and since they’re essentially ‘shooting fish in a barrel’ their half of the pie will no doubt be lucrative. DraftKings is required to open at least four retail sportsbooks but can open as many as ten. The DraftKings mobile app has been available in New Hampshire since December 2019.
The NH Lottery deserves a marginal amount of credit for knowing that they have no business running a sports betting operation and bringing a professional outfit like DraftKings on board. They can at least avoid the sort of dumpster fire that exists in states that *do* try to run their own betting operation such as Oregon and the District of Columbia. They’ve also contracted with Greek gaming technology company Intralot to run a parlay game at lottery retail locations.
Even with DraftKings’ involvement the NH Lottery Commission is doing with sports betting the same thing that always happens–they’re turning it into a gimmick game for the lottery. Instead of doing what states like Colorado, Iowa and New Jersey have done and creating a viable sports betting ecosystem that benefits the entire state economy they’ve decided to screw the players. The state will make money, DraftKings will make money and presumably Intralot will make money. The sports betting public of New Hampshire will suffer with a single ‘out’ and the typical ossification that occurs in any monopoly in any industry. New Hampshire bettors can’t even bet on their in-state college teams for..uh…’reasons’.
Actually, what will happen is that the New Hampshire Lottery’s sports betting fiasco will be a huge marketing boon for offshore sportsbooks. Why throw money at the state lottery when you can choose from a variety of ‘outs’ that actually have to work to earn business? Certainly, no serious sports bettor will be closing their offshore accounts to bet with the lottery. Novice sports bettors might get into the game through the lottery but at some point they’ll look for better options as well. At the very least, they’ll look for options that provide a full betting menu that includes in-state teams.
So how much money will New Hampshire make? Not as much as they would with a competitive sports betting ecosystem. The state’s lottery bureaucracy should start by figuring out a way to do a better job with their…uh…core ‘competency’. New Hampshire ranks #21 in lottery spending per capita (based on 2017 data) and this actually went down from the previous year. DraftKings knows what they’re doing so the lottery won’t be able to screw up the day to day operation of a sports betting business.
What we do know is that between December 2019 and August 12 2020:
The New Hampshire Lottery and DraftKings launched mobile sports betting in the state in December. DraftKings has committed to operating at least four retail sportsbook locations statewide. Since December, total sports betting in New Hampshire has exceeded $65 million.
So in nine months they made a little more than Colorado did last month ($59.1 million). Right now, New Hampshire benefits from a complete lack of competition. Rhode Island is the only other state in the region with sports betting–also run by the lottery and possibly the worst sports betting jurisdiction in the US. Full disclosure–I’m a DraftKings stockholder so I’m glad they’re able to fleece lottery playing suckers in New Hampshire. At least serious sports bettors can continue to play offshore–and why wouldn’t they?