A sportsbook sharp bettors favor is set to join the two U.S .market share leaders in bidding for a business-friendly category of Missouri sports operator licenses.
Key takeaways
- Circa Sportsbook joined FanDuel and DraftKings in applying for one of two untethered sportsbook licenses in Missouri, which offer major financial advantages.
- Untethered licenses avoid costly revenue-sharing deals with land-based partners, potentially saving operators millions annually.
- Missouri's sports betting market is set to launch Dec. 1, with as many as a dozen other books, including BetMGM and ESPN BET, expected to apply for tethered licenses.
Circa Sportsbook, known by bettors for its high wagering limits, submitted an application for an untethered Missouri sportsbook license shortly before the July 15 deadline, state gaming regulators confirmed during a meeting Wednesday. Missouri Gaming Commission officials said they'd consider the application along with prior bids from DraftKings and FanDuel.
The three are bidding for one of two untethered licenses. There are more than a dozen other potential bidders for a separate category of tethered licenses via partnerships with a state casino or professional sports organization.
A decision announcement for the two untethered bid winners is set for Aug. 15. License requirements make FanDuel and DraftKings the heavy favorites to win the two bids.
Missouri’s licensed online sportsbooks are set to take bets beginning Dec. 1.
Untethered advantage
The two untethered bids are set to give winners a financial leg up on their competition.
Like most of the 30 states with legal statewide mobile wagering, most third-party online sportsbooks in Missouri must partner with an established land-based business. The Show-Me State will also have a separate license class that doesn’t mandate this partnership requirement.
These deals, not typically publicly disclosed, usually require the sportsbook operator to pay some sort of fee or revenue share with the brick-and-mortar entity.
FanDuel earlier this month announced it would acquire Boyd Gaming’s 5% stake in the company. FanDuel said the deal would help it save around $65 million annually, since it would no longer have the same payment requirements in the five states where the companies had online sports betting market access deals.
Extrapolating an average of the costs in those five states to Missouri, where Boyd also operates casinos, it's plausible an untethered license would save a book $10 million or more in annual market access payments in the Show-Me State, though agreements and terms vary between sportsbooks and operating jurisdictions.
The two untethered licenses came as part of the regulations around a 2024 sports betting ballot measure largely funded by roughly $40 million in combined contributions from DraftKings and FanDuel.
Circa took a different approach to betting
Founded in Nevada, the book is only in five states compared to more than two dozen apiece for DraftKings, FanDuel and several other major market share leaders. Instead of spending billions on marketing, promotions and other acquisition costs, Circa generated a loyal customer base by offering high limits to its players, even “sharp” and professional bettors.
Circa Sports (@CircaSports) has a newly promoted sportsbook director, but nothing is changing about its approach to providing “sports betting the way it should be.”
— Jim Barnes (@JimBarnesLV) May 24, 2023
Comments from @DerekJStevens, @BetChris and @MMpact, story by @tdewey33 https://t.co/RLnTiByDek
If approved for the untethered license, Circa would have online sportsbook access in six states: Nevada and Colorado as well as Missouri neighbors Iowa, Illinois and Kentucky.
Circa faces an uphill climb to earn the license.
Among the seven requirements state regulators must consider when awarding the untethered licenses are “advertising and promotional plans to increase and sustain revenue”; “ability to generate, maximize, and sustain revenues for the state”; and “the capacity to increase the number of bettors on the applicant's online sports wagering platform.” Circa’s business model and limited advertising left it among one of the lowest-generating sportsbooks by handle in the five states where it operates.
If Circa is denied a bid, it could still secure market access via a tethered license with one of the Missouri casinos or sports teams. Circa has similar deals in Colorado, Iowa and Illinois.
Other Missouri sportsbooks
FanDuel, DraftKings and Circa could be joined by as many as a dozen other mobile sportsbooks.
Underdog, best known for its daily fantasy sports platform, applied for an online single-game sports betting license separately from the untethered bidding process, state gaming regulators confirmed with Covers Thursday. BetMGM and bet365 announced market access deals with Century Casinos and MLB’s St. Louis Cardinals, respectively, but haven't yet filed a license application with the Missouri Gaming Commission.
The deadline for aspiring tethered licensees is Sept. 12 if they wish to go live by the Dec. 1 launch date.
ESPN BET via its partnership with PENN Entertainment casinos, Bally Bet (Bally’s) and Caesars are also likely to seek online sportsbook licenses via their respective operations of Missouri brick-and-mortar casinos. These parent companies operate both the casinos and online sportsbooks, meaning they wouldn't be subject to the same market access deals and costs that would face a mobile-only platform such as DraftKings or FanDuel.
Other likely applicants include Fanatics, BetRivers and Hard Rock, which would all need to strike a market access deal with a Missouri team or casino.
