Deals fly as online sports betting ramps up

FanDuel (DUEL) reports that it took in $13.3M in online sports bets in New Jersey during March, while DraftKings (DRAFT) took in $7.3M for the month.

With another 15 states in the mix to have legalized sports betting to join New Jersey, Delaware, Mississippi, West Virginia, New Mexico, Pennsylvania and Rhode Island - online providers are scrambling to partner up with land-based casinos for "skins" that give them the right to operate in certain states. Existing deals are already in place between FanDuel and Boyd Gaming (NYSE:BYD), Empire Resorts (NASDAQ:NYNY) and Bet365, as well as DraftKings and Caesars Entertainment (NASDAQ:CZR). Global sportsbooks companies like William Hill (OTCPK:WIMHF) and The Stars Group (NASDAQ:TSG) are also seen as key partners in the "wild west" scenario of online sports betting opening up in new markets. Meanwhile, MGM Resorts (NYSE:MGM) has aggressive deals in place with several professional sports league that it's looking to leverage.

Underlying it all, casinos and online operators are trying to slice off as much as possible of the $150B in illegal sports bets in the U.S. every year. "Gambling is still dominated by an illegal grey-and-black market, whether with local bookies or offshore operators, that have been in place for a very long time. In a regulated, consumer-protected business, we’re very optimistic that we can actively displace that as more responsible actors," says FanDuel Chief Revenue Officer Mike Raffensperger.

Looking even further ahead, FanDuel and DraftKings are seen positioning themselves for an IPO in a year or two.