- FanDuel has announced that they have launched their mobile betting platform in Wyoming.
- Wyoming currently has three sportsbooks serving the state–FanDuel, DraftKings and BetMGM. In addition, PointsBet has been licensed but has yet to launch.
- Wyoming’s regulatory framework for sports betting is ‘pound for pound’ the best in the United States.
- Unfortunately, the state has been overlooked by many sportsbook operators due to its small population.
As we noted in our previous article about sports betting in Wyoming, there are now three sportsbooks serving the ‘Cowboy State’. Earlier today, FanDuel announced their launch in Wyoming effective at 7 AM Mountain Standard Time. You can download the FanDuel app for iOS or Android or play online at https://wy.sportsbook.fanduel.com/.
If you read the previous article, you learned that we love Wyoming. ‘Pound for pound’ it is the best sports betting regulatory framework in the USA. All the good with none of the bad:
Wyoming also resisted the temptation to try and extract as much money as possible through taxes and licensing fees. The fee structure in Wyoming is such that any legitimate sports betting provider really doesn’t have an excuse *not* to launch in the state–initial licensing fees will be $100,000 and good for five years with subsequent renewal fees at $50,000. The 10% tax rate is a bit higher than I’d like but it’s important to keep in mind that sportsbooks won’t be sharing their revenue with a third party ‘access provider’ from the legacy gaming industry as they do in most states. ‘Net net’, the 10% tax rate in Wyoming is functionally less of a financial bite than New Jersey’s 8.5% or even Iowa’s 6.75%.
There is one errata I want to make from the previous comment–the 10% tax rate *without* having to pay some crony of the governor (eg: legacy casino, racetrack, sports team, etc.) is a big deal:
That last point is huge. The typical revenue share by sportsbooks that ‘partner’ with a legacy gaming business or other entity with sufficient political clout (eg: pro sports teams) is 10% to 15%. That’s why most sportsbooks would rather pay a higher tax rate with none of the ‘tethering’ nonsense than a lower rate that is supplemented by payments to a third party business that has been financially generous to politicians in a given state. In Wyoming, they don’t have to. There are just a handful of states with a tax rate lower than 10% (eg: Indiana, Iowa, Nevada) and a handful at 10% (Colorado, West Virginia). Wyoming has a low tax rate *without* a third party getting a cut. Given the going rate of a revenue share deal (10% to 15%), Wyoming has a functional tax rate of zero.
The one thing that has limited the number of ‘outs’ to launch in Wyoming is the state’s tiny population of 576,851. Wyoming has so much upside potential not only for sportsbooks but for any sports betting related business. At the same time, Wyoming has so much to gain from creating a sports betting ‘hotspot’ in the same way they have with crypto/blockchain related businesses. Most significantly, with their extremely reasonable licensing fees and an effective tax rate that is the lowest in the nation it would take a seriously incompetent book to *not* turn a profit. Meanwhile, in the 51% tax rate hellhole of New York companies are attracting a ton of action but estimates indicate that they have collectively lost in the neighborhood of $200 million USD. Not bad for a couple of months.
The only strategy that New York facing sportsbooks appear to have is to cross their fingers and hope that the state government lowers that absurd tax rate. That still would leave the convoluted ‘consortium’ arrangement where several mobile sportsbooks operate under the license of a legacy gaming business. This is the scheme that I showed to several experienced CPAs in hopes they could explain it–and they couldn’t. The consensus was that it was either set up to facilitate ‘cooking the books’ or other corrupt behavior or–the more likely scenario–to maximize tax revenue for the state while screwing over the sportsbooks *and* the players.
But back to the ‘anti-New York’ aka Wyoming. FanDuel is up and running there and it is the 15th state in the US where they’re offering mobile betting. The other states are Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan, New Jersey, New York, Pennsylvania, Tennessee, Virginia, and West Virginia.
FanDuel couldn’t bother to serve up a quote for their Wyoming launch. They might not make a fortune in the least populated state in the US, but they won’t be losing $200 million USD either.