Interview Synopsis

DraftKings – online sports betting iGaming landscape 2022 outlook

  • Public Equity
  • Consumer
  • North America

On January 8, New Yorkers were for the first time able to open their phones and place their bets after online sports gambling was legalised in the Big Apple. The state became the 18th to legalise the practice since laws changed in 2018, and represents a significant whale for the four gaming operators with licenses in the state – Caesars Sportsbook, FanDuel, Rush Street Interactive and DraftKings.

DraftKings doubles down on US market as pursuit of Entain ends

A former executive at DraftKings told Third Bridge Forum that the launch in New York is a “really exciting time” for the online sports betting (OSB) and iGaming sector in the US. The specialist said he expects more states to follow New York, highlighting 4-6 US states and a Canadian province that are “likely to go live” in the not too distant future. 

DraftKings will likely be a part of any future launches in those areas, as it was with the majority of OSB launches since legalisation. The specialist said DraftKings has “done a really good job” in improving its competitiveness, brand recognition and loyalty over the past 18 months in OSB states, and now has a brand closely associated with sports in the eyes of its consumers. The specialist said it has a “market-leading presence”, with a strong tech-stack, and provides the best broadcast offering. 

However, the specialist said improvements could still be made to its sports betting offering, noting that while the SBTech acquisition added “great technology” to DraftKings, it has too many configurations.

Additionally, integrating DraftKings’ systems with SBTech, launching its services in various states and its dalliance with purchasing Entain saw fewer features added, resulting in loss of market share to FanDual and BetMGM. Ending its pursuit of Entain has refocused its efforts on the US live betting market, the specialist said, resulting in a “tip back” in handle share towards it over the last few months. 

On DraftKings’ failed bid for Entain last year, the specialist said they were always “perplexed” by the move for the international partner, given the US is where the brand resonates most. They hypothesised that the move may have been a step in a larger deal between DraftKings and MGM merging, or a play to drive up the price for MGM to ultimately buy Entain. 

Nevertheless, the specialist believes DraftKings can now focus on the US market – one that represents a “massive opportunity” – and where live betting is odds-on to become as prevalent as it is in the UK, one of the world largest live betting markets.  

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