DraftKings' sports betting launch in New Jersey has been immensely successful and the company is eyeing consistent growth as it launches into more states.
Since the company launched legal sports betting in New Jersey in August of 2018, CEO Jason Robins says the state now makes up nearly a third of DraftKings revenue despite making up less than 3% of the U.S. population.
Continued Expansion
As the company expects to launch in Indiana, West Virginia, Pennsylvania and Iowa over the course of the upcoming NFL season, DraftKings could see sustained growth for years as more states allow for legal sports betting.
“The entrance into new states could have us see 50% growth for many years to come and this doesn’t even count international expansion,” Robins told Benzinga.
Robins says the advent of legal sports betting has turned DraftKings from a nice growth company into hyper-growth mode and he doesn't see it letting up anytime soon, nor is he concerned with competition from the casinos.
“We have a lot of partnership discussions. Right now it is a positive ecosystem. There is so much value creation that is going to happen, there is enough to share for everybody which is great. The casinos have become more of our partners than anything,” he said.
The way the legislation is unfolding as states slowly open up legal sports betting to DraftKings is giving the company a competitive advantage, according to Robins.
"It is kind of nice in that regard that it is happening state-by-state in the standpoint of an investor, rather than a big explosion. This gives us a layer cake kind of growth by adding more states one by one," Robins said. "That gives an interesting profile for investors as it gives us a competitive moat. Each state is so intricate, it is like customizing your set-up in each state, and will make it hard for competitors to catch up."
'NFL Is More Popular Than Ever'
DraftKings says it currently makes up 40% of the online sports betting market. As for its bread of butter of fantasy sports, Robins says it's growing at 15% to 20%, spearheaded by fantasy football.
“From what I can gather, the NFL is more popular than ever,” he said.
To celebrate the upcoming season, DraftKings is offering two $1 million fantasy football competitions. For a $10 entry fee, Robins says DraftKings will make two new millionaires at the start of the season.
As far as the brand's IPO ambitions, the CEO says there are positives and negatives of going public.
“Being private allows us to be more nimble. It allows us to keep our innovation plans under wraps but being a public company gives regulators and the public a lot of trust and there is a lot of capital obviously," he said.
"There is push and pull both ways. Right now it is something we are thinking through."
Related Links:
They're In The Hole! Sportsbooks Lose Big On Tiger's Masters Win
The Big Business Of Brackets: More Than $8B Will Be Bet On NCAA Hoops Tourney
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
