DRAFTKINGS CEO
We built an entirely customised, bespoke front-end, integrated it with our fantasy platform. We want to add other products like igaming in Jersey and it felt like a great fit there. They had an excellent track record around risk management and obviously they work with Unibet, who has been very successful. So, we looked at a lot of different options and felt like they checked the most boxes for us. We’ve been really happy so far with how that’s been going.
poker, unlike sportsbooks. So obviously having liquidity and scale helps in sportsbook, but the difference is in fantasy sports, it’s like a massive differentiator in the product, having much bigger tournaments than everyone else, having many more variety of opponents. So where it’s relevant here is it was really important early in the daily fantasy sports market to have the most liquidity, to be the biggest, and that was the race. Whereas I feel like in sports betting, it’s going to be much more of a long game and about who optimises their cap to LTV; who manages their CRM the best? Who’s got the best data science and algorithms behind cross-selling and all those things I think are going to be far more important than they were in fantasy sports.
SBC: Yeah, you must have received numerous platform approaches. What was your executive team looking for exactly in a betting partnership? JR: So I think one of the key
things is that pretty much from day one, and we tried to do this with a lot of things because I think it leads to better results, I took myself and the non-product and tech people out of the decision. We said, you guys go check out what’s out there, you tell us what’s the best fit for our product from tech standpoint, and then yeah, I’d like to meet the people there and get to know them, but every time they’re coming to me and saying hey, do this, do this; I quietly reminded them I’m not making this decision, it’s somebody else. And I actually think that’s a really good thing even though at the end of the day it’s on me and the executive team, having people who are actually going to be responsible for operating and growing that product. To avoid them telling me six months in you made me pick this vendor and that’s why we’re not succeeding, that doesn’t really work. So that’s the way we approached it. SBC: So, DraftKings has launched its first betting-centric marketing campaign for New Jersey; will US sports betting advertising replicate the frantic output that was witnessed during the rise of DFS? JR: I hope not. I think that was probably a
bit much, although at the time it was quite successful so it’s hard to really critique it too much. I think the key difference here though is that this is going to be, at
least until something changes, a state-bystate thing in the US. So, unlike fantasy sports where there was this big national marketing campaign that both us and our competition were doing, that won’t exist. It’s all going to be localised and when the market finally gets to a point where there’s enough states that it actually does economically make sense to do national advertising, I think it’ll be way past the stage of everyone learning the brands. I don’t think it’ll play out the same way. I think it’ll be much more about who can execute the best on product and then digital marketing. The other thing I’d add is that the other aspect with fantasy sports, daily fantasy sports, is it’s a marketplace. It’s a game, but it’s a marketplace. So it’s liquidity driven, like
I TOOK MYSELF AND THE NON-PRODUCT AND TECH PEOPLE OUT OF THE DECISION. WE SAID ‘YOU TELL US WHAT’S THE BEST FIT FOR OUR PRODUCT FROM TECH STANDPOINT
28 SPORTS BETTING GUIDE TO ICE • FEBRUARY 2019
SBC: So with that in mind, is there actually a future for daily fantasy sports in this new era?
JR: Oh, for sure. I mean daily fantasy
sports isn’t going anywhere anytime soon over the long-term. I mean, who knows, everything gets disrupted. But first of all it’s going to take a while for all the states to roll out, so even if you’re somebody that believes that it’s just a substitute product, it’s not going to be, there’s not going to be available substitutes for quite some time in most places around the country. Secondly, it is really a different value proposition. You can go on daily fantasy sports and enter an NFL contest with us this Sunday and put in $20 and win $1 million that day if you beat the competition. There’s parlays and other ways you could do it with sports betting, but it’s a little bit different. I mean the last point I make is that already about 80 or so percent of our customers are betting on the black markets offshore anyway for sports. So whatever cannibalisation would exist is kind of already happening and I think it’s already in equilibrium, but obviously we want to move that black-market activity over into the regulated markets, but I don’t see why that can’t coexist with fantasy sports in the same way that it does today, just everything in a legal market. •