DraftKings announced a multi-year agreement Thursday to become an Authorized Gaming Operator of Major League Baseball under an expanded partnership that will likely have significant ramifications for the spread of in-game wagering on the sport.
As real-time betting proliferates nationwide, DraftKings’ ability to leverage live and in-game wagering options appears to be a key driver of the partnership. By becoming an Authorized Gaming Operator of MLB, DraftKings will gain access to official MLB betting data, as well as rights to use MLB marks and logos within its sports betting products.
DraftKings becomes the first standalone Authorized Gaming Operator (AGO) of the league. Terms of the deal were not announced.
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“DraftKings is proud to be designated as a Major League Baseball Authorized Gaming Operator,” DraftKings Chief Business Officer Ezra Kucharz said in a statement. “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.”
The announcement comes as little surprise to industry insiders who have closely followed MLB’s inroads into sports betting in recent months. During a media briefing last month in London, MLB executive Kenny Gersh noted that the league was on the verge of securing partnerships with both DraftKings and FanDuel.
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Unique in-game markets
While in-game wagering on MLB contests figures to grow exponentially following the deal, it remains immediately unclear how the league’s high-speed, automated Statcast platform could play a role in the AGO program.
At first glance, DraftKings’ deal with MLB may increase the likelihood that AGOs of the league could begin to offer pitch-by-pitch wagering in real time. Imagine a scenario if Los Angeles Dodgers pitcher Clayton Kershaw is facing New York Yankees outfielder Aaron Judge in Game 7 of the World Series. The bet types could allow fans to wager on whether Kershaw’s next pitch will be a ball or a strike.
MLB’s Statcast tool expands the possibilities even further. Proprietary technology from Statcast could enable bettors to wager on whether Kershaw will throw a slider, fastball, or curveball. The bettors may even be able to risk money on if Kershaw’s pitch will exceed a certain velocity such as 95.5 miles per hour.
The technology, however, still needs to be field tested by state gaming laboratories and will need to clear some regulatory hurdles before it hits the market. Nevertheless, exotic prop betting based on data compiled by MLB’s Statcast technology could be available at this time next year, MGM President Of Interactive Gaming Scott Butera told Sports Handle this spring.
Last November, MGM Resorts announced a multi-year deal with MLB that designated the company as the first official gaming partner of the league. Beyond DraftKings’ partnership, FanDuel and The Stars Group could be next in line to join the league’s AGO program based on Gersh’s comments in June.
MLB’s promise of reliable data
Earlier this spring, Sports Handle obtained a six-page document disseminated by MLB that outlines the advantages of joining the league’s AGO program. Among the benefits include the right to purchase MLB Betting Data from the league’s authorized data distributors that offer “seamless integration with MLB’s best-in-class technology,” according to the proposal. The feed is “sourced and delivered using streamlined procedures direct from the ballpark, reducing latency and improving market uptime,” the proposal adds.
In many respects, the partnership represents a breakthrough for MLB. For months, the league struggled to add direct licensees when several deadlines passed without new partners aboard. One MLB executive took his road show to Las Vegas in an effort to pitch the AGO program to a number of prominent sportsbooks. The league’s attempts to collect royalty fees for official data, in the absence of statutory mandates, could be legally challenged on the basis that MLB may not own intellectual property rights with the data, according to a leading U.S. intellectual property attorney.
The agreement between DraftKings and MLB signals the league’s vision in integrating official data with current technological advances, according to the company. The expanded partnership also underscores MLB’s ability to align with consumer behavior and the technological curve, DraftKings adds.
MLB, meanwhile, appears encouraged by DraftKings’ track record in driving fan engagement when it comes to immersive experiences.
“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,” said Gersh, MLB’s executive vice president of gaming and new business ventures.
Most recently, DraftKings, in combination with other Resorts Digital sites, generated nearly $2.7 mm in online sports betting revenue in New Jersey for the month of June. Resorts Digital’s year-to-date revenue of approximately $29.4 mm, in combination with FanDuel/PointsBet’s revenues from online sports betting in 2019 so far, represents around 82.9% of the Garden State’s online market.