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Background dealmaking between sports betting applicants underway as launch nears

Companies involved in Massachusetts’ budding Sports Betting market are already starting to seek out deals and partnerships with each other in the run-up to the scheduled launch of sports wagering early next year, according to new documents regulators released to MassLive and interviews with key stakeholders.

Public details are still scarce but a handful of indicators of potential partnerships are emerging in surveys that sports wagering hopefuls were required to turn in to the Massachusetts Gaming Commission last month as part of the sports Betting application process and in discussions with industry experts.

The surveys ask for basic information from those looking to apply for a sports betting license — their company type, whether they are publicly traded, management structure, investors, and information about parent companies.

The surveys also ask companies to indicate if they turned in an attachment showing any current gaming licensees or sports betting applicants with whom they have “an agreement to conduct or are in the process of negotiating an agreement.” A majority of the 30 companies that completed the surveys said they had turned in one of the attachments describing those potential or solidified partnerships.

  • Read more: Gaming regulators lay aside DraftKings’ request to revisit sports betting timeline

While the attachments are not yet publicly available, deals are being made in the background between retail operators and online companies. Raynham Park owner Chris Carney said that his company is “within two weeks” of naming a partnership with a digital betting platform to run the racetrack’s one online betting platform

“We’re looking for a partner right now for retail and online,” Carney said in an interview with MassLive, though he declined to offer specific details before the partnership was announced.

Industry insiders say the “licensee association” attachments, as they are called in the surveys, could also show which online companies are looking to pair up with the three casinos in the state in an effort to solidify their spot in the brand-new Massachusetts sports betting market.

Encore Boston Harbor, MGM Springfield, and Plainrdige Park Casino have applied for category one licenses under the state’s sports wagering law, which, if approved, would allow them to offer in-person wagering and online betting through up to two individually branded platforms.

If an online betting company can strike the right deal with a casino, experts say, they are more than likely guaranteed an entrance into the Massachusetts market without having to compete with other businesses for one of the seven online betting licenses allowed under state law.

  • Read more: Mass. Gaming Commission ‘on schedule’ with sports betting regulations

That is exactly what state gaming regulators wanted to glean from the “licensee attachment” — which online companies are making deals to run one of the two digital betting platforms the state’s three casinos have access to under the sports betting law, according to a commission official.

Experts also questioned whether a betting company could secure one of the seven independent online betting licenses and negotiate a deal to operate a mobile or digital betting platform for one of the casinos, effectively letting them run two online sports betting operations.

But it’s unclear if regulators will let that happen or whether state law permits such a scenario. A spokesperson for the commission said the Gaming Commission would need to discuss the question during public meetings before any decision is made.

On the dealmaking front, insiders say the most action is occurring among the state’s two horse racing tracks and simulcasting facilities — Raynham Park and Suffolk Downs — who will need to rely on an outside company to run their sports betting operations, both online and retail.

At least one company has made clear they are looking to negotiate with them.

In its survey, FanLogic said it wants to both compete for an online wagering license that is not tethered to a brick-and-mortar operation and partner with one of the horse racing tracks.

“FanLogic has not identified a category two partner. However, we may be in discussions with a category two partner in the near future. Thus, FanLogic would apply for both a category three tethered and untethered sporting wagering license,” the company’s scoping survey said.

A FanLogic representative did not respond to a request for comment.

  • Read more: Gaming regulators eyeing in-person meetings as it rolls out sports betting

But the timeline for when category two licensees will launch is still unclear even as the Gaming Commission has voted to approve a late-January start for in-person betting at casinos and early March for online betting.

At a commission hearing in early October, Commission Executive Director Karen Wells said category two applicants were “intentionally” not included in timelines because regulators needed more information from them.

“We need more information from them on their plans and their partners before we can figure out where they fit into the timeline,” she said. “So that would be another discussion.”

Rimon Law Attorney Steven Eichel, who represents Raynham Park in its application process, said the timeline for horse racing tracks is dependent on when they select a sports betting company to run their wagering operations.

He said Raynham Park cannot start its application until that partnership is solidified, adding it’s “kind of a gating event for getting really substantively into the application process.”

As far as what Raynham Park is looking for in a future partner, Eichel said it is no state secret “to say we want a partner who is going to give us the largest projected market share.”

“But at the same time, it goes without saying that that can only happen with an operating partner who’s one of the major players and who’s got real credibility in both the marketplace for consumers as well as with the Gaming Commission,” he said.

  • Read more: DraftKings asks regulators to reconsider sports betting launch timeline

State law requires category two sports betting licensees to make a capital investment of at least $7.5 million. Raynham Park is in the process of building out a 30,000-square-foot gaming facility near their old race track in Bristol County.

Carney said he is spending over $25 million on the new facility, which he hopes will become a “destination location” for sports betting.

“I wanted to stay in Bristol County, I wanted to stay at the dog track because the town and the family have a great relationship and history,” he said. “I didn’t want to try to recreate the wheel with somebody I didn’t know. I had great support from the town.”

Commonwealth Equine and Agriculture Center, better known as Great Meadowbrook Farm, also submitted a survey, though their plan to open a thoroughbred horse racing track and sports betting facility in Hardwick was voted down by the town’s Board of Selectmen.

A Suffolk Downs representative did not respond to a request for comment.

  • Read more: These companies want to offer online sports betting in Massachusetts

The potential for dealmaking and information sharing had at least one gaming regulator concerned last week.

At a virtual hearing, Commissioner Jordan Maynard said he was worried about information a casino could gather at a retail betting kiosk after it launches in January that could then be passed along to an untethered online betting operator “that would perhaps give someone a leg up.”

“That’s something that I would like to address later on as we keep moving through regulations,” he said. “… But I am concerned about equity issues. I am concerned about giving someone a leg up and I will work with my fellow commissioners, if you’re interested, in finding ways to level the playing field after everyone is operating.”

The post Background dealmaking between sports betting applicants underway as launch nears appeared first on RT News Today.



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