EXCLUSIVE: DraftKings CEO Sizes Up Sports Betting Competition: 'Always Good To Understand How Your Competitors Are Doing'

Sports betting company DraftKings Inc DKNG reported first quarter financial results and raised guidance for the full year Thursday. The company's CEO and co-founder Jason Robins tells Benzinga the near-term focus is on profitability, while also highlighting opportunities to diversify outside of sports betting. 

Diversification Outside Sports Betting: One key focus for DraftKings in recent years has been diversifying outside of sports betting, exploring growth opportunities in areas such as media and gaming to expand its market presence.

“It’s really a two-way thing, more sports consumption gives more opportunities to bet, more betting leads to more engagement.”

Robins said it’s important to invest in new opportunities like media, but also remain focused on paying attention to profitability and EBITDA.

The company’s diversification efforts are prioritizing initiatives that are “self-standing” and of “low capital consumption.”

“I think, by the way, it’s important at any company as you get bigger trying to not do things that are not part of the big thing that you already established, it can be hard if not set up in the right way.”

Another area DraftKings is diversifying into is non-fungible tokens with its gamified Reignmakers series for the NFL, PGA Tour and UFC.

Robins said it was too early to tell if the product has been successful.

“We’re definitely bullish on the potential.”

Robins said it takes time to ramp up the new product, as there have been ripple effects from the overall crypto market being under pressure.

"Still early stages and yet to be seen if it will reach the potential we see there."

Robins said

Robins stated that the objective is to maintain the NFT programs with minimal capital requirements, while generating a "significant revenue stream" through the games.

Related Link: DraftKings Pushes Diversifcation Efforts With Streaming Video Service, What Investors Should Know 

Competition, M&A Opportunities: DraftKings reported financial results after peers like Penn Entertainment and MGM Resorts International did. Robins said it’s important to pay attention to what your competition is reporting.

“We definitely look at it, I get a summary from my team, sometimes I listen to the calls. It’s always good to understand how your competitors are doing.”

Robins said paying attention to the competition can help provide a sense of what analysts are looking at and what questions they are asking about the sports betting space. The DraftKings CEO said it also helps to benchmark yourself against competitors to see if you’re doing better or worse in certain areas.

“It starts good conversations internally.”

While M&A is a continued topic in the sports betting space, Robins said DraftKings isn’t actively exploring opportunities in the space.

“I think right now we’re very focused on just continuing to execute. We’ve seen really strong organic growth. We’ve seen market share consolidating without having to do M&A.”

Robins said it would take a really compelling opportunity with the bar set high at this time.

DKNG Price Action: DraftKings shares are up 15% to $24.51 Friday at the time of writing. 

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