DraftKings Encounters Tech Issues on March Madness Day Following Gonzaga Promo Bet

DraftKings’ (NASDAQ:DKNG) servers picked an awful time to go down — doing so on Thursday, the first day of the NCAA Tournament.

Here’s what happened. In the early window of opening round games yesterday, DraftKings offered clients a maximum $50 moneyline bet on Gonzaga at odds of +100 ($50 to win $100). Obviously, there are no guarantees in sports betting, and March Madness lends itself to upsets. But Gonzaga is the favorite to win it all this year, and was squaring off yesterday against Georgia State — a lowly 16-seed.

In essence, the promo was free money for DraftKings customers. Bettors playing with house money often look to rapidly reinvest that capital — something the opening round of the NCAA Tournament is conducive to doing, because windows between the end of one game and tipoff of another are short.

The issue was reportedly resolved after 18 minutes, and it’s not rattling DraftKings stock, which is higher by four percent in late trading.

Still Bad Timing for DraftKings

While the gaming company was quickly able to put the tech snafu behind it, encountering such difficulties on the first day of one of the most wagered-on domestic sporting events clearly amounts to bad timing.

That’s particularly true because through the first 12 games of the tournament, favorites went 10-2, meaning casual bettors — who usually lean into favorites — were sitting on cash begging to be deployed into other games.

At its investor day earlier this month, DraftKings forecast long-term iGaming market share of 20 percent to 25 percent in North America and online sportsbook market share of 20 percent to 30 percent.

Competitors Exploit DraftKings Woes

Not surprisingly, some rivals looked to capitalize on DraftKings’ technical misfortune on Thursday.

PointsBet took to Twitter offering bettors a free $10 wager if they submitted a screen shot of the problem they were having with DraftKings. The Australian company didn’t mention its competitor by name.

Barstool Sportsbook’s David Portnoy, never one to miss an opportunity to bolster his company’s fortunes, said “Barstool is up and working. We’re happy to take peoples bets while Dk figures out their issues.”