DraftKings Sees Lucrative In-Game Betting Market Emerging, Baseball, Others Viewed as Possible Catalysts
Posted on: May 26, 2020, 11:30h.
Last updated on: May 26, 2020, 12:58h.
DraftKings (NASDAQ: DKNG) stock is soaring again Tuesday, a move helped by CEO Jason Robins saying the newly public company could realize significant opportunity going forward in the potentially lucrative in-game betting market.
In an interview with Barron’s, Robins said bolstering live wagering offerings is a top priority for his company. DraftKings is already a player in in-game betting circles. Last year, DraftKings rolled out a related product coinciding with Wimbledon, while inking a live wagering accord with the NBA. Robins sees slower-moving sports, such as soccer and baseball, as ripe for more in-game action.
In the U.K., in-game is about 75% of the revenues at sports books, and here’s it’s much lower,” he said in the Barron’s interview. “You can bet on almost anything in an EPL (English Premier League soccer) game, including who will get the next yellow card. Arguably, US sports like baseball are better built for this because of the stoppage in play.”
In a normal sports environment, football, basketball, and baseball are the most wagered-on sports in the US, with the likes of golf, soccer, and tennis falling into the “other” category. But some industry observers view in-game wagering as an avenue for boosting the profiles of less-popular sports.
Already Testing It
DraftKings is proactive in its approach to in-game betting. The company aired live odds during “The Match” charity golf competition over the weekend. Tiger Woods and Peyton Manning topped Phil Mickelson and Tom Brady by one hole in an event that was more popular among bettors than the typical golf tournament.
Some Las Vegas sportsbooks said betting volume on “The Match” was comparable to a lower tier NFL regular season or a top flight NBA game.
For DraftKings, “The Match,” which was held at Medalist Golf Club in Jupiter, Florida, was its biggest golf event to date, generating double the handle of its next-highest golf competition, according to Barron’s. That’s likely contributing to a better than six percent gain for the stock today.
With the MLB season slated to start in early July, followed by several golf and tennis majors later this year, DraftKings should have more opportunities to test live betting products.
Earlier this month, when DraftKings delivered its first earnings reports following its April initial public offering (IPO), the company said it was encouraged by the outlook for 2021, noting that it didn’t foresee lingering impacts from the coronavirus trickling into next year.
Robins made similar remarks in the Barron’s interview, saying next year’s sports calendar should be healthy enough that $700 million in revenue is achievable.
That number could be topped if sports betting catches on in some newer markets where DraftKings is operational, such as Colorado, and if the company can fast-track entry into other states, namely Illinois. DraftKings stock is higher by 66 percent over the past month.
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