Penn National Gaming is working towards launching a fantasy sports product, according to recent comments from the Pennsylvania-based gaming company.
Penn National + fantasy = ?
PNG executives were asked about “their expectations and timeline getting into fantasy sports” during a Q&A session in the company’s second-quarter earnings call. Few solid details were given, but we did learn a little about their plans.
Chris Sheffield, senior vice president and marketing director for iGaming, discussed Penn National’s plans briefly:
Again I see fantasy sports as being a kind of tool for helping to improve retention and acquisition of customers. We know from some of the surveys that we’ve done that around 42% of people that play daily fantasy sports games are also casino customers as well. So, there’s a lot of synergy between the two products. We have sports bars at a lot of our casinos as well. So, really again, looking at a very similar strategy to the social casinos using these as a way of having more engagement with our customers and being out there hopefully accessing different customer groups as well, and really all about retention and building loyalty of that customer base.
Tim Wilmott, president of PNG, also weighed in:
Yeah. We don’t see ourselves as a competitor for FanDuel or DraftKings, by no means. But we certainly think we can take advantage of the millions of relationships we have with our customers today and expand upon those relationships through new offerings in this space, but not at the scale of those two companies and what they’ve done and how they’re spending to try to continue to grow share.
A request for comment from Penn National about its future fantasy sports offering was not answered.
So what would PNG’s fantasy product look like?
Fantasy sports were very briefly mentioned in PNG’s Q1 earnings call — “We still see opportunity to expand our presence with customers in different forms of gaming, be it social, be it fantasy, be it commercial” — Wilmott said earlier in the year.
For Q2, we got more details than before, and from the sounds of it, there are more concrete plans now being put into action by PNG. Penn National, of course, is not just a Pennsylvania gaming operator, with a presence in 16 states. It is also in the process of acquiring the Tropicana in Las Vegas.
So what exactly would a DFS product from PNG look like, and how would it be implemented? Currently, most DFS sites operate online in a vast majority of the jurisdictions in the United States; in the case of the two largest operators — FanDuel and DraftKings — that’s 45 states. Pennsylvania is a state where DFS is generally considered legal; a gaming license is not required, currently, to operate.
From Wilmott’s comments, it sounds like a PNG DFS offering would be at least similar to the offerings at the likes of FanDuel and DraftKings, where users select fantasy players for one-day and compete against one another for cash prizes.
At least in Pennsylvania, it appears unlikely that the DFS product would be offered on site; a bill was introduced earlier this year allowing brick-and-mortar casinos to offer on-site fantasy sports. That legislation, however, made no progress.
What’s the next move for Penn National?
It sounds like Penn National is happy to take it slow in getting into the DFS market, and to leverage its current relationships with casino customers. With the NFL season just around the corner, a launch in 2015 seems unlikely.
However, whenever it decides to launch, it will likely be getting into an already crowded market. In addition to the “big two” of FanDuel and DraftKings:
- Yahoo launched a product this summer.
- CBS went live this week with its own DFS platform at SportsLine.com just this week.
- Amaya is set to launch its own product via PokerStars sometime this year.
And that’s in addition to a number of next-tier and smaller DFS operators. Certainly, PNG could speed up its entry into the market by acquiring one of the smaller sites and leverage it as its own DFS platform.
What is next for PNG and fantasy? We’ll probably have to wait until later this year to find out.