GamblingCompliance: Nevada’s USFantasy Eyes Pennsylvania For Potential Expansion

7TH SEP 2016 | WRITTEN BY: CHRIS SIEROTY

Nevada’s first licensed fantasy sports operator will launch its contests at about a dozen casinos on Thursday just in time for the start of a new NFL season, before expanding into a total of 49 casinos by week three, the company confirmed Tuesday.

The Las Vegas-based company’s fantasy football product uses NFL players but is based on pari-mutuel betting, a pool style of wagering used for horse and dog racing. USFantasy plans to expand to baseball, basketball, hockey, golf and NASCAR, according to a listing on its website.

USFantasy is different from DraftKings, Yahoo or FanDuel where players assembly a fantasy team and try to generate a collective score higher than other players.

The Nevada Gaming Commission approved the company’s pari-mutuel model in June.

Nevada is unique in that it has regulated daily fantasy sports (DFS) without passing new legislation, instead requiring fantasy sports companies to receive a full gaming license before they are allowed to do business in the state.

“We decided with our business model that we were going to go through the front door and not the back door,” Michael Knapp, co-founder and COO of USFantasy, told GamblingCompliance. “We saw that being licensed was an advantage.”

Knapp said there is plenty of competition in Nevada for a consumer’s gambling dollar, but that the company has been well received by casinos state-wide.

Even as USFantasy prepares to launch in Nevada, company executives have been talking with Pennsylvania lawmakers, who have been debating DFS regulations, about how the new form of fantasy sports might be licensed.

“I met with the owners of USFantasy and their lobbyists,” Republican state Rep. George Dunbar told GamblingCompliance Tuesday in a phone interview. “The concept makes a lot of sense. But right now, we haven’t even licensed DFS.”

Dunbar said he did not think lawmakers would do anything with USFantasy “until we saw how well it works in Nevada.”

He said company executives also wanted to know how pari-mutuel fantasy sports could work under his DFS bill — House Bill 2150 — that is currently sitting in the state Senate waiting to be acted upon.

House members voted 114-85 in favor of HB 2150, which forms part of a larger House budget package.

Dunbar said the current bill does not include pari-mutuel fantasy sports, but the state could certainly consider having its Horse Racing Commission regulate the company.

“Let me get DFS passed in the legislature and we can talk about it later,” said Dunbar, who is also a member of the House Gaming Oversight Committee. “We need to regulate DFS. It needs to get done. Any gambling legislation will have DFS attached.”

Knapp agreed, saying how USFantasy is regulated in Pennsylvania is a “little out of our control.” He did say USFantasy “was willing and able to do anything [regulators] ask.”

Knapp said if Pennsylvania wants USFantasy to be regulated by the gaming commission, “we are able to do that,” but if it should be the racing commission than “we are able to do that too.”

USFantasy offers pari-mutuel-style fantasy games where contests are based on a single position. Players can choose from a pool of players, betting on them to “win,” “place,” or “show.”

Exactas and trifectas are offered with higher payout for selecting the winner of two or three events in correct order. Other common wagers that gamblers see at the racetrack include Daily Doubles or Pick 3s.

All wagers are placed in a pari-mutuel pool and distributed after all player performances are completed and tabulated.

For fantasy football, a $1m progressive jackpot Pick 7 contest is planned for correctly selecting the winners of seven different categories.

That is compared to DraftKings offering free play with a customer’s first deposit and $5m in total prize money for week one of the NFL season. On FanDuel’s website, the company offers a money back guarantee and five free beginner NFL entries with a first deposit.

“Pennsylvania would be ideal for us,” Knapp said. “There are racetracks, off-track betting and casinos. There is a lot of potential there.”

However, just six of the 12 casinos in Pennsylvania can accept pari-mutuel wagers.

“We are starting to get calls and interest from other states,” Knapp said. “Our focus right now is Nevada.”

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