State by state, we are seeing the rapid expansion of legal sports betting in the United States. The New Hampshire Lottery Commission’s executive council approved DraftKings Sportsbook to be the exclusive provider for sports betting.
This includes both mobile and retail sports betting. Of course, this is a major development in the sports betting world, as two things came from this.
One, a new state will be entering the sports betting market. Secondly, this could prove to be another precedence if it works, as other states love to copy legislation that has proved successful.
DraftKings Sportsbook Exclusivity?
This is a very interesting development, and the first question that comes to everyone’s mind is simple.
Why DraftKings Sportsbook in New Hampshire?
Per the deal, DraftKings will pay out an absurd amount of 51% of gross gaming revenue to New Hampshire, which is an incredible number. This is quite worrisome, as it may result in very high prices for odds in the state. No competition is never a good thing for competitors, but given how steep the “taxes” are for DraftKings (51%, essentially) the prices will be high anyway.
DraftKings bid to the state of New Hampshire was either the 51% as an exclusive provider, or 21% if there were four or less rivals in the state. The 51% with exclusivity was attractive to the state, who hopes sports betting will help the state with budget problems.
Will Taxes Impact New Hampshire Sports Betting?
The main worry will be the prices and odds on DraftKings Sportsbook. With neighboring states allowing sports betting either in the present or future, New Hampshire is a small state where it is quite easy to navigate to Vermont, Maine, Massachusetts, etc. If the monopoly created by DraftKings and New Hampshire results in say a bet being -135 instead of -115 in a neighboring state or on “non-legal” sportsbooks, bettors are going to choose the alternative.
This is a worrisome issue, and remember one reason why there has been a push into legality and regulation of sports betting is due to the offshore and other markets, which of course is untaxed.
This was illustrated by gaming law attorney Daniel Wallach: “anything north of 10% [taxes] is going to drive business back to the illegal markets.
Pennsylvania Sports Betting has a very high tax rate of 33%, which is a massive 18% difference than New Hampshire. So far, Pennsylvania has been relatively successful…but issues could arise in the future. With a monopoly and and 51% tax rate, it is hard to imagine New Hampshire being attractive to experienced bettors.
As always…time will tell.
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