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FanDuel and International Game Technology (IGT) announced on Monday a deal to expand and extend their online gambling and sports betting partnership through 2024.
The relationship between the companies dates back to 2018, when FanDuel was just branching out from its original daily fantasy sports (DFS) product into the newly legal sports betting space.
Group CEO Matt King describes that deal as having been “integral” to the company’s scorching growth.
“IGT is the strategic partner that we will lean on to help us expand our retail footprint across the U.S.,” said King of the expanded alliance. “IGT’s PlaySports platform enables us to create an intuitive, technologically driven customer experience at our world-class retail sportsbooks for our customers, while its PlayCasino content enables FanDuel to deliver premium mobile casino entertainment in new and existing markets.”
The news doesn’t change very much in the short term. Rather, it represents a commitment by both companies to continue what has been a very successful partnership for at least another four years.
The deal will expire in September 2024. Until then, FanDuel has committed to continuing to use IGT’s platform for any further retail sportsbooks and online casino apps as it expands into new states.
Both companies saw their stock prices rise on the day of the announcement. IGT traded up 7% to close at $10.56, while FanDuel’s parent company Flutter saw a more modest increase of 2.8%.
It’s hard to argue with the success that the arrangement has brought so far. Despite its lack of prior experience outside of DFS, FanDuel’s new products have quickly become dominant in each market it enters.
The retail sportsbook at Meadowlands at the heart of its original deal with IGT is now the country’s highest-volume sportsbook. It’s also the market leader for online betting in NJ and PA and holds a major presence in West Virginia, Indiana, and Colorado as well.
Much of the coverage of the deal has focused on the sports betting aspect because FanDuel has been such a force in that vertical. But it’s no slouch when it comes to online casino. Indeed, it’s probably just getting started there.
The only online casino using FanDuel’s own brand at the moment is in PA, where it operates in partnership with Valley Forge Casino. It can’t offer its own products in NJ because Meadowlands, as a racetrack and not a casino, is only licensed for sports betting. Instead, it has a deal in place with Betfair Casino to include its product in FanDuel’s sports betting app.
Both arrangements have been lucrative for FanDuel. Its self-branded online casino is in close competition for second place in the PA market, while Betfair is part of the highest-grossing team in NJ under the license of Golden Nugget.
A lot can happen in four years, and there’s no telling how widespread the implications of the extended deal will be. In the short term, however, it’s a near-certainty that new FanDuel Casinos will be launching in West Virginia and Michigan.
Its old DFS rival DraftKings christened the WV online casino market last month, while Michigan regulators are still hammering out the details there. They recently released a working draft of the rules, which will soon be up for public comment. If all goes well, MI online gambling might be ready for its debut in October.
FanDuel already has a retail sportsbook in both of those states, which should make for a swift online casino launch in each.