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Overview: New Hampshire’s Unsustainable Sports Betting Strategy

New Hampshire is one of a handful of states whose sports betting industry is a monopoly. While most other states are designed to have one sportsbook operator, New Hampshire had the option to allow up to five mobile sportsbook brands to operate in-state. However, it signed an agreement with DraftKings that made it the only sportsbook in New Hampshire. Online sports betting went live in New Hampshire on December 30, 2019, and it remains a monopoly. One legislator is proposing a few amendments to improve the New Hampshire sports betting industry. However, they’re not the changes New Hampshire needs to ensure long-term success.

How New Hampshire Legalized Sports Betting

After the repeal of PASPA – the law preventing states from legalizing sports betting – in 2018, each state could decide whether it wanted to legalize sports betting. By July the next year, New Hampshire’s Governor signed HB 480, legalizing sports betting in New Hampshire. The bill allowed ten retail sportsbook locations and five mobile brands. They were tight restrictions, which gave the new Division of Sports Wagering an easier oversight task. However, that left the new Division of Sports Wagering to create industry rules and license sportsbook operators. But New Hampshire selected its sportsbook operators quickly. The process began with a competitive bidding war to see which sportsbook brands would give New Hampshire the best deal. It looked like New Hampshire would take the top few and bring the most competitive brands in. Instead, DraftKings struck a deal that the Republican Governor, Chris Sununu, couldn’t resist. DraftKings offered to split gaming revenue 50/50 with the State. But in return, it wanted a monopoly on New Hampshire. Governor Sununu agreed. On November 25, 2019, DraftKings became the New Hampshire Lottery’s exclusive sports betting partner. Governor Sununu would place New Hampshire’s first sports bet on December 30, 2019 – and win.

Why The DraftKings Monopoly Was So Attractive

Governor Sununu moved quickly to bring sports betting to New Hampshire. However, it wasn’t just another passion project. He took advantage of two things:
  • Nearby Boston, with its large pool of bettors just across the border
  • Massachusetts’ slow legislative process
We’ve written about Massachusetts’ cautious approach to gambling measures before. Its slow, deliberative process may yield legislation that creates a more competitive sports betting industry. But in the meantime, Governor Sununu hoped to siphon Boston bettors from Massachusetts to New Hampshire. (Giving Boston-based DraftKings a monopoly on New Hampshire was likely icing on the cake.) Legalizing sports betting before its cautious neighbors gave New Hampshire a first-mover advantage. New Hampshire is a small state. But drawing bettors to New Hampshire would generate the revenue needed to make sports betting profitable. Siphoning bettors from out-of-state can be profitable. New Jersey gets about a fifth of its revenue from neighboring New York. But that strategy has a critical vulnerability. Once neighboring sports legalize sports betting, bettors will likely stay home. In New Jersey’s case, New York has to legalize mobile sports betting to bring New York bettor money back to New York. New Hampshire has to watch the states around it consider and reconsider the issue again to see how long until the jig is up. That’s why the upcoming amendments are so important to New Hampshire.

Proposed Tweaks To New Hampshire Sports Betting

New Hampshire allows retail and online sports betting. However, retail sportsbooks are forbidden from offering live in-game betting. Only mobile sportsbooks can offer it. Representative Tim Lang wants to allow live betting at retail sportsbooks. He also wants to eliminate the limit on retail sportsbook locations. Both measures would open the door to a free market in New Hampshire. However, even a market transformation of that scale may not be enough to make sports betting profitable for New Hampshire in the long run. If Massachusetts and Maine legalize online sports betting, New Hampshire will lose revenue. It’s only made $10 million from January 2020 to January 2021. Rhode Island almost made that in its first year of sports betting, even after missing its optimistic projections. All these northeastern states are going to have to prepare for a long-term decline as neighboring states legalize sports betting. Especially mobile sports betting.

Online Sports Betting In New Hampshire

DraftKings is the only online sportsbook available in New Hampshire. It struck a revenue-sharing deal that gave DraftKings a monopoly on New Hampshire’s sports betting market. That seemed like a great deal for New Hampshire, too. It made $10 million that funded education. However, New Hampshire – and the entire northeast – faces the same threat. When they can’t steal bettors from one another, their sports betting revenues will drop. Online sports betting will attract bettors if they don’t have convenient retail options nearby. But we’re running out of northeastern states reluctant to legalize sports betting. New York is opening up to mobile sports betting. Maine has considered sports betting in the past and almost certainly will again. New Hampshire had a great advantage by legalizing it early. But the late newcomers may dethrone New Hampshire when their times come.

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