DraftKings Stuffing Stockings Following InComm Gift Card Deal
Posted on: December 16, 2020, 09:33h.
Last updated on: December 16, 2020, 02:22h.
DraftKings is entering the holiday shopping conversation. Today it announced a partnering with InComm Payments to roll out the gaming industry’s first gift cards sold at retail locations.
Atlanta-based InComm is a fintech company with expansive reach in the gift card business. With more than 1,000 retail partners and over 500,000 distribution points, the company manages north of 850 million cards per year.
With the new partnership, DraftKings will expand its presence through retails chains, such as convenience stores, pharmacies, and general merchandise partners, according to a statement from InComm.
The press release didn’t indicate if there are any geographic restrictions on the distribution of the cards. Currently, DraftKings offers mobile and online sports wagering in 10 states. It’s a tally that will likely increase over the near-term, with Michigan joining the fray and other states coming aboard next year.
DraftKings’ daily fantasy sports (DFS) platform is available in all but seven states. One of the seven holdouts is Louisiana, but following the recent approval of the DFS tax policy, the activity will be permitted in the Pelican State.
Gift Cards Equal Big Business
While time is running out on the holiday shopping season, DraftKings’ foray into the gift card space could prove well-timed, because sales of those items typically spike at this time of year. In any given year, nearly 75 percent of shoppers buy at least one gift card in the fourth quarter and a majority purchase at least two.
For DraftKings, there are some potential demographic benefits. A survey conducted by CardCash indicates higher-income shoppers are more likely to buy and receive gift cards, and the coveted millennial segment — a key constituency for online betting operators — is more apt to purchase and receive gift cards than older age groups.
The initial rollout of DraftKings cards will happen in convenience stores such as 7-Eleven, Speedway, Dollar General, and Sheetz. The aforementioned press statement didn’t say what other retailers could be added to that roster in the future.
Recipients of the cards can fund DraftKings accounts and use the credits on real money offerings, including sports wagering and online casinos in states where those activities are permitted.
Not Yet on E-Cards
For now, DraftKings gift cards must be purchased at land-based retailers. It is unknown when or if the company will market e-cards, the faster growing of the two segments.
Sales of gift cards at brick-and-mortar are rising at a six percent clip per year. But that’s dwarfed by the rapid acceleration in the online market. In the third quarter, retailers sold 114 percent more digital cards than in the year-earlier period, while revenue generated increased 65 percent, according to Rise.ai Inc.
Those figures don’t include ubiquitous Amazon or multi-retailer gift cards, confirming the digital space is potentially lucrative territory for DraftKings offerings in future holiday shopping seasons.
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