The CEO of DraftKings said if no new states added sports betting in 2021, he expects his company to experience 40 percent growth. That scenario is unlikely given the states expected to adopt either legislation or regulations. It’s conceivable, DraftKings could see hyper growth if more states join the club, Jason Robins told FOX Business.
DraftKings saw a major increase in numbers in the third quarter, with a 64 percent uptick in business compared to 2019.
“On average, more than a million monthly unique paying customers engaged with DraftKings each month during the third quarter,” the company indicated. Revenue rose 98 percent to $133 million, which was on target for analyst estimates.
Robins credited the growth to the return of major sports in the third quarter including the NBA, NHL, NFL and MLB. The company suffered major losses during the second quarter when the Covid-19 pandemic benched play.
Despite the positive figures, DraftKings had a third-quarter loss of $348 million, or an adjusted 57 cents per share, beating analysts’ expectations. DraftKings recorded a second-quarter loss of $161.4 million, or 55 cents per share, even as revenue grew 24 percent from the prior year to $70.9 million.
“Just this year, we’ve launched in three new states for online sports betting, four if you count New Hampshire. And we also launched two new states for iGaming so we’re hopeful that more states will take action next year and we’ll see even more of the population able to access DraftKings sports betting product,” Robins said.
New York may be the next state to legalize online sports betting, according to reports. New York Assemblyman Gary Pretlow told PlayNY that an online sports betting bill could be approved before the year ends.
Once a stumbling block to a deal, Governor Andrew Cuomo could accept legislation in the next revenue bill as a way to raise much needed tax dollars in the wake of the coronavirus pandemic.
According to Investor’s Business Daily, the bill would set a price of $12 million for an initial license and operators would pay a 12 percent tax.
Connecticut has yet to legalize sports betting, but that has not stopped DraftKings from signing a partnership with the tribe that owns Foxwoods December 7.
“This is a landmark deal in collaboration with the Mashantucket Pequot Tribal Nation as well as a critical next step to bringing America’s top-rated sportsbook app to sports fans in Connecticut,” said Matt Kalish, co-founder and president of DraftKings North America.
Governor Ned Lamont supports sports betting but not exclusivity for the Mashantucket Pequot and Mohegan tribes. According to the two tribal nations in Connecticut, their compacts give them the exclusive right to offer casino games, a right they interpret to include sports betting and iGaming. If that exclusivity is not honored, the tribes could cease payments to the state. The DraftKings deal with Foxwoods could produce $175 million in revenue for the state over a five year period.
Foxwoods might bring in more money without a DraftKings deal, but would have to pay the full cost of advertising and marketing. The sportsbook also brings younger patrons to Foxwoods.
As for enabling legislation, the Senate has bipartisan support for sports betting, but the House, like the Governor, opposes exclusivity. Lamont would prefer to avoid legal troubles with not only the tribes, but with MGM Resorts International, which filed suit in a federal dispute over a joint venture casino in East Windsor. Since the casino would not rest on tribal lands, the process should go out to bid, according to Sports Handle.
“I want to put forward something that works, that doesn’t result in litigation, that gets us off the dime,” Lamont told reporters at his regular briefing on the coronavirus.
Rodney Butler, chairman of the Mashantucket Pequots, said a bill will pass because it can help heal the economy.
“Sports betting will be legalized in 2021,” said Rep. Sean Scanlon, incoming House chairman of the finance committee. “You can bet on it. It’s one of my biggest priorities.”
In other DraftKings news, the company signed a multi-year agreement with the Nashville Predators that names the sportsbook as the official daily fantasy sports and sports betting operator for the team. The partnership comes as DraftKings kicks off its sportsbook in Tennessee, according to CDC Gaming Reports.
“As soon as the Tennessee Sports Gaming Act was passed in April, we immediately began our search for an experienced sports betting partner,” said Chris Junghans, executive vice president and chief revenue officer of the Predators.
DraftKings’ branding and content will become part of Bridgestone Arena, including virtual signage visible on TV, in the Lexus Lounge for all home games, with betting lines visible for in game and pre-game radio coverage.
The two will also share digital and social media content, such as overseeing the team homepage, app and social media giveaways. DraftKings will also be part of the Predator newsletter.
