DraftKings Signs Deal As ‘Authorized Gaming Operator’ for Major League Baseball

With longtime competitor FanDuel in the process of taking over a good chunk of the sports betting world DraftKings had been fairly quiet. That’s all changed over the past week and the daily fantasy sports company’s strategy for sports betting is also coming into focus. Late last week, DraftKings announced a partnership with Major League Baseball (MLB) to come an ‘Authorized Gaming Operator’.

While FanDuel has been working the ‘brick and mortar’ sportsbook angle (along with online betting) it’s now apparent that DraftKings is going to position itself as a ‘data provider’ to supplement it’s online and in person betting offerings which are currently live in New Jersey, Mississippi and West Virginia. The ultimate goal will likely be to serve as the ‘facilitator’ for ‘official MLB data’ in any jurisdiction that has the nonsensical requirement to use official league data for grading wagers. So far, there’s thankfully not been many states to cozy up to the professional sports leagues like this. For that reason, it could become a very limited market for DraftKings.

In addition, DraftKings will be able to enhance their own live betting experience. They’ll not only get the rights to use the official MLB data in their products but will also be able to use MLB team and league logos:

The expanded partnership will enhance DraftKings’ wagering offerings, especially live and in-game options as real-time betting becomes increasingly popular during sports and entertainment events, by granting the company rights to use official MLB data along with MLB marks and logos within DraftKings sports betting products.

Ezra Kucharz, chief business officer at DraftKings, had these comments in the official press release:

“DraftKings is proud to be designated as a Major League Baseball Authorized Gaming Operator. This deal speaks to the commitment we have to our customers and sports leagues alike while providing the safest and most entertaining American-made sportsbook. As a result of this agreement, our customers will experience enhanced live wagering offerings for all MLB games.” 

Kenny Gersh, MLB Executive Vice President, Gaming & New Business Ventures, gave this response:

“Given DraftKings’ successes in driving fan engagement and immersive experiences, we’re looking forward to an expanded partnership and further collaboration on engaging products. Buoyed by our collective commitments to drive innovation in the U.S. sports betting marketplace, the tools provided to DraftKings – including fast, rich and reliable data feeds and MLB brand marks – will be central to creating these powerful new ways to consume and connect with our sport.”

The press release also suggests that DraftKings customers will see ‘more instantaneous data feeds’ which may or may not be the case. There’s plenty of very capable third party providers feeding data to sportsbooks and as a result the improvement in speed could be negligible. The use of official MLB team logos is a nice touch–this will likely be a place where the sports leagues can extract some money out of the betting industry. The logos aren’t ‘mission critical’ but if the leagues keep ‘logo rights’ fees reasonable they could become commonplace at in-person and online sportsbooks. Then again, if the leagues try to hold up the industry for absurd fees they’re not exactly necessary for a quality betting experience.

On a macro level, the professional sports leagues are likely starting to realize that the sports betting business isn’t going anywhere and that they need to learn to live with them. There’s definitely some good revenue opportunities for the leagues but they need to be reasonable about what their data and intellectual property is really worth.

About the Author: Jim Murphy

For more than 25 years, Jim Murphy has written extensively on gambling theory and practice. Jim Murphy has been quoted in media from the Wall Street Journal to REASON Magazine. Murphy worked as a radio and podcasting host broadcasting to an international audience that depended on his expertise and advice.