DraftKings CEO Robins Says iGaming Could Top Sports Betting
Posted on: December 4, 2023, 01:21h.
Last updated on: December 9, 2023, 01:44h.
DraftKings (NASDAQ: DKNG) CEO Jason Robins sees iGaming growth continuing in the US, potentially outpacing online sports betting in the future despite being permitted in just six states today.
The chief executive officer and co-founder of the gaming company made comments to that effect Monday at the third annual Craig-Hallum Online Gaming Conference. Currently, sports betting is allowed in 35 states and Washington, DC, while iGaming is legal in New Jersey, Michigan, Pennsylvania, Connecticut, West Virginia, and Delaware. DraftKings, the largest Internet casino operator by market share, is in five states.
It’s a very significant chunk of our revenues, and that’s only in five states. I mean, it’s going to grow. So really for me, iGaming is kind of the unlocked or the hidden, not yet unlocked, I should say, gem of DraftKings,” Robins told analyst Ryan Sigdahl at the conference.
Analysts and operators are enthusiastic about the outlook for internet casinos because there’s a long runway for state-level legalization. It’s also a higher margin business than sports betting, and bettors are often stickier and spend more money than they do on sports wagering.
DraftKings Smartly Invested in iGaming
Acknowledging that he thought it would be difficult for DraftKings to capture a 30% market share in iGaming — the operator’s current market share in the space — Robins said the company hasn’t “even started to scratch the surface” of the online casino opportunity set.
DraftKings shrewdly cemented its perch in the arena via its $1.56 billion all-stock purchase of Golden Nugget Online Gaming (GNOG), announced in August 2021. That acquisition gave DraftKings an immediate boost in the vital New Jersey market where GNOG had long been profitable.
“We’re very bullish on iGaming. I think it’s something that is sort of like I said for many, at least a hidden gem, and we’re investing a lot behind that product. It’s something that we intend to continue to compete in and try to gain share,” Robins told Sigdahl. “Also, I’ve been surprised how much share we’ve been able to gain there.”
At the moment, the 2024 legislative outlook for iGaming is murky, but New York could consider the issue, and if it passes there, the news could boost shares of operators such as DraftKings. Robins mentioned Illinois and New York as two of the states that could power future growth in the internet casino space.
DraftKings Nearing Launch of Progressive Parlays
At its investor day last month, DraftKings touted the upcoming debut of progressive parlays — sports wagers with multiple legs that provide some compensation to bettors even if one or two of the selections are wrong. Robins said the company is weeks away from debuting that offering.
The DraftKings boss noted the operator isn’t reinventing the wheel with its progressive parlay menu and that the concept has proven reliable in other parts of the world.
“The opportunity to, even if you don’t hit every leg of your parlay, be able to win something. So, it gives you that sort of still thrill of chasing the big payout, but there’s some consolation prizes in there, so I think it’ll really scratch an itch in the customer demand — on the customer demand side,” he told Sigdahl. “And it’s great for the house too, like all parlays, it should hold well. So really, excited about that product.”
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