DraftKings Monopoly New Hampshire Sports Betting

Ever since New Hampshire sports betting launched in 2019, DraftKings has held a monopoly over online operations. Basically a half-decade later, many are wondering when, or if, this is going to change.

Initially, this wasn’t much of a question. Legal online sports betting in the United States was still relatively new when The Granite State rolled out their services. So many were just happy to get sports betting in New Hampshire at all.

This indifference has started to shift in recent years. And it’s no wonder why. Online sports betting in the USA is more popular than ever. In most markets, wagers processed through mobile betting states represent over 80 percent of the total action.

That number should only continue to grow. Thirty-eight of 50 states now have some form of legal sports betting. The majority of those, meanwhile, offer online wagering options. Mobile sports betting in the United States has never been more accessible. That gives it extra staying power.

What’s more, it’s not even clear whether we’ve reached peak popularity. Among the 12 states without legal sports betting, at least seven or eight will probably rework their gaming laws over the next decade. And it will be a major shock if most of them don’t board the online sports betting bandwagon. The reach of mobile online betting sites in the USA is too vast. And that means the potential for profit is, for most states, too enticing to pass up.

However, most markets offer multiple online sportsbooks from which to choose. That’s not the case for New Hampshire sports betting. Hence the two questions that are cropping up more and more. First off, why is sports betting in The Granite State set up this way? Secondly, and perhaps most importantly, are things ever going to change?

How Did DraftKings Negotiate a Monopoly Over New Hampshire Sports Betting?

Before tackling what’s next, we must first dig into how we got here. Sports betting monopolies are not unprecedented. Other states have them. The most notable one is the exclusivity the Seminole tribe has for sports betting in Florida. No other operator is licensed to provide sports wagering services, whether it be online or in-person.

This tends to happen when the negotiating party has a ton of leverage. In the case of New Hampshire sports betting, though, a perfect storm of specific circumstances led to the DraftKings monopoly. Here is Bart Shirley of Legal Sports Report with a breakdown of how The Granite State ended up here:

“The decision to accept DraftKings’ proposal from among the 13 the lottery commission received caused some confusion. However, it soon became clear that the revenue-sharing proposal that DraftKings floated —promising 51 percent of its revenue to the state —proved to be the decisive factor.

“DraftKings offered the state such a large revenue share in exchange for a lockout on competition, something that the original law did not require. However, under the contract’s conditions, adding one or two additional sportsbooks chops DraftKings’ 51 percent tax obligation down to 21 percent. The percentage declines even more if New Hampshire allows three or more sportsbooks to compete with DraftKings in the state. Thus, New Hampshire and DraftKings have vested interests in each other, and there does not appear to be any push to allow other companies to have a bite at the apple.”

After poring over these details, it’s no wonder the DraftKings sports betting monopoly in New Hampshire has sustained this long. The state isn’t prohibited from busting it up. But it likely has millions of dollars at stake if it does.

Will New Hampshire Ever Expand Their Online Sports Gambling Offerings Beyond DraftKings?

Many will point out that the New Hampshire sports betting climate is different now. And they are correct. Even as DraftKings and FanDuel dominate most market shares, the competition for expanded offerings is fierce. New Hampshire will have no trouble drumming up interest from other operators.

Whether indulging that interest would be worth it is debatable.

New Hampshire is a bottom 10 market when it comes to the size of their population. And while they have plenty of pro sports teams within the tri-state area, none of them play in-market. Without question, tons of sportsbooks would seek out licenses if given the opportunity. But New Hampshire doesn’t have the cachet to extract exorbitant tax rates.

That’s a big deal. Remember, DraftKings’ tax rate could drop to 21 percent or lower depending how aggressively New Hampshire sports betting expands. Even charging higher rates to competitors may not offset the difference. After all, DraftKings is no worse than the second most popular online sportsbooks in the United States. Introducing New Hampshire residents to additional options likely won’t prevent bettors from continuing to lean on DraftKings.

Awarding a license to FanDuel is the only way The Granite State can hope to bridge the gap. But once more, DraftKings will remain so popular that letting it operate at a steep discount will invariably cost the state potential revenue.

To that end, it’s unlikely the New Hampshire sports betting monopoly gets overturned anytime soon. The state could explore other options if DraftKings’ exclusive deal expires, but the length of the contract doesn't seem to be publicly available. For all we know, it could be 2029 or 2039—10 years and 20 years, respectively—before the New Hampshire sports betting market has a genuine opportunity to expand.

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