Rovell: DraftKings CEO Talks Race for Market Share, Live Betting Delays & More
Marco Bello/Bloomberg via Getty Images. Pictured: DraftKings CEO Jason Robins.
Every year before the football season, I sit down with DraftKings CEO Jason Robins to get a state of the business.
Darren: Jason, it seems like we’re busier than ever and sports gambling is taking over the world.
Jason: It’s a really exciting time. It’s a high momentum period of the industry. There’s a lot of new people coming into our world, who either haven’t bet at all or casually bet when they made trips to Vegas. It’s very competitive for us, but the growth has been amazing.
Darren: You always have a mindblowing stat for me ahead of the NFL kickoff. What do you have for me this year?
Jason: How about this? With four hours to go before kickoff, we’ve taken approximately one million bets on tonight’s game. To put that in perspective, when we started in New Jersey (in 2018), it took us a month to get to one million bets.
Darren: Mindblowing. There’s been no commitment from the NFL to have their announcers talk about gambling this year, but they have decided to control gambling ads to seven partners and only up to six advertising slots per game.
Jason: I commend the NFL for doing this. In the UK, there has been a lot of criticism about sports betting advertising on broadcasts because they haven’t set limits. We can all say it’s too much too fast, but then once everyone starts to do it — and it works — it becomes hard not to oversaturate the market.
Darren: I think fans remember that season where it was all DraftKings vs. FanDuel in the fantasy battles. Speaking of competition, there’s always a lot of talk on Wall Street about spending money and a race to the bottom and profitability in this competitive landscape. How do you win?
Jason: Part of how we win is to expand our brand elasticity and therefore improve the lifetime value of our customer by getting a greater share of their entertainment wallet. We built our marketplace section and launched with NFTs and we felt good about it when we saw the sellouts.
We get more powerful as a company when people realize that they want to give DraftKings their business in areas outside of betting and fantasy. In internal meetings, I’ve always talked about Amazon and how they started as a general bookstore. They’re a beacon for us.
Darren: Live betting is growing in the United States, still not where it is in Europe at 75%. Where do you feel live betting is trending here?
Jason: I actually think we should do better than Europe and have a larger share than they do on live betting. They’re betting mostly soccer and they don’t have natural stoppages in play like our sports do that make it more advantageous to live betting.
Darren: I’m worried about the buffering and the spinning and the delays.
Jason: Let me address that. So with most live markets, we get the data and the algorithm can’t account for what the flag was about, so the markets temporarily shut down. But that’s part of the reason we’ve migrated to our proprietary platform a few weeks ago, so that we have total control of our destiny. We’re going to allow someone to manually code in what they see so that we can more seamlessly address this market. No one here is trying to screw the gambler, but it’s not an easy problem to solve. That being said, we think now that we’re in control, we can be at the head of innovation in this space.
Darren: I know you’re offering the Buccaneers as a 73-point underdog tonight as a promotion. What is that going to cost you?
Jason: We’re at a $16 million liability and rising. It’s a good marketing spend for us and a great place to invest while giving back. That is, unless the Buccaneers lose by 74 or more. We did this because the biggest margin in NFL history was the Chicago Bears 73-0 win over the Washington Redskins in 1940.