In the dynamically evolving landscape of the sports betting industry, Jason Robins, the CEO of DraftKings, remains remarkably unfazed by the launch of ESPN Bet, even suggesting that the emergence of the new competitor could signal positive growth for the sector. With ambitions unshaken and a confident outlook, Robins addressed the potential impact of ESPN Bet on the market during his speech at the 3rd Annual Craig-Hallum Online Gaming Conference.
ESPN Bet, a collaborative venture born from a $1.5 billion agreement between Penn Entertainment and Disney’s ESPN, commenced operations across 17 states on November 14. The mobile app associated with ESPN Bet experienced a staggering one million downloads within just six days post-launch, no doubt bolstered by the coincidental alignment with the bustling sports calendar of Thanksgiving week.
Notably, ESPN Bet surpassed previous benchmarks for sportsbook app downloads, setting new records in the process. However, DraftKings’ chief Robins maintained an even-keeled stance amidst the brewing competition. He reinforced DraftKings’ status as one of the prime movers in North America’s sports betting realm, confidently sharing the top tier with notable counterpart FanDuel.
Robins expressed a vigilant, yet non-alarmist, approach to ESPN Bet’s entre into the market. “We watch this stuff very closely. We’ve seen nothing to suggest that our trajectory is changing, but it’s obviously something we’re keeping a close eye on,” he commented. Historically, DraftKings has weathered multiple storms of competition and observed various strategic and occasionally aggressive market entries. Despite this, he pointed out that ESPN Bet seems to be adopting a long-term strategy, rather than attempting a temporary market disruption.
DraftKings harbors a sanguine expectation that ESPN Bet’s entrance will not only spur innovation but also attract new talent to the industry, ultimately expanding the total addressable market (TAM). Such growth is seen as beneficial to all players in the field, including DraftKings. “I feel like, we’ve just reinforced that no matter what happens competitively, no matter who enters the market. If we stick to our playbook, good things will continue to happen,” Robins emphasized.
A strong believer in product quality as the cornerstone of success, Robins attributes DraftKings’ impressive performance to its top-tier offerings. He believes in the tenet that the best products eventually prevail, gaining intrinsic advantages in aspects such as lifetime value (LTV) and customer acquisition cost (CAC), which further reinforce the company’s competitive edge.
Robins candidly shared that while he always believed in DraftKings’ potential, the speed with which the company secured its position at the forefront of North America’s sportsbook scene was unexpectedly rapid. Progressing quickly to the market share summit—a feat he had envisioned to be a more protracted journey—has underscored DraftKings’ capabilities and reinforced their strategies.
Looking to the future, Robins teased the upcoming launch of “progressive parlays,” a novel betting format that promises to offer consolation prizes even if a bettor does not win all legs of their parlay. This customer-centric innovation aims to fulfill specific demands and is expected to perform well based on experiences from other markets.
DraftKings, earlier in the year, leapfrogged FanDuel to claim a 31% market share in iGaming during the Q3 period, demonstrating formidable progress. Robins shared his enthusiasm for iGaming, considering it the “hidden gem” of DraftKings, characterized by substantial contribution to revenues and substantial growth potential.
Finally, DraftKings continued its steady growth trajectory with an uptick in guidance for the third consecutive quarter this year after registering an increase in both revenue and adjusted EBITDA for Q3, and significantly reducing net loss. Although still operating at a loss for the year, the improvement in operational efficiency signifies a bright prospect for profitability in the first half of 2024.
Robins ended his discussion on a note of confidence, denoting the company’s strategic expansions and sustained growth, stating, “We’re very bullish on iGaming.” With DraftKings’ mobile sports betting now going live in 25 US states and attracting a 40% increase in monthly unique players, the company is firmly positioned for further advancements in an ever-competitive market.
