- DraftKings appears primed for continued growth despite the disruptions caused by the ongoing Coronavirus pandemic.
- In 2020 and 2021, the company is focusing on expanding its live betting options and its consumers’ awareness of live betting.
- The company has also begun exploring an acquisition of sports media company Bleacher Report.
- DraftKings stock price has soared over the last two months after experiencing a precipitous drop in the opening days of the COVID-19 crisis in the U.S.
BOSTON – DraftKings has rapidly grown in value since its launch of DraftKings Sportsbook in August 2018, and despite the Coronavirus pandemic, the company appears primed for continued growth.
He says that fans look for ways to create a vested interest in the sports they watch, and live betting provides a perfect vehicle for that interest.
DraftKings has also begun exploring an acquisition of popular sports media company Bleacher Report, which could help DraftKings expand its market reach to more 18-35-year-old sports fans.
Betting action has decreased markedly with the suspension of major sporting leagues across the world in response to COVID-19, but Robins maintains that DraftKings’ initial 2021 revenue projection of $700 million is still attainable.
Moving forward, the key for DraftKings to continue its rapid growth will be to capitalize on its market value by creating more betting options that appeal to younger sports fans.
The aforementioned live betting expansion and Bleacher Report acquisitions could be great ways to achieve that.
Synergy Between Live Betting And Bleacher Report
Robins says that roughly 75% of sports betting revenues in the U.K. come from in-game wagers, while that percentage is much lower in the United States.
This split is strange considering that American sports generally include more stoppages that could logically be used to recalculate betting odds. They are also generally more situational, which lends itself to an expanded selection of live betting options.
The impediment to more live betting interest in the United States likely isn’t a lack of interest, but a lack of exposure at legal sports betting sites.
A recent Bleacher Report broadcast of “The Match”, a charity golf tournament featuring celebrities like Tiger Woods and Peyton Manning, included a graphical overlay of DraftKings’ live betting odds on the event.
The Match became the most wagered-on golfing event in the history of the DraftKings sportsbook, drawing more than twice the company’s previous highest betting handle.
It was a perfect demonstration of the potential success and synergy of a Bleacher Report acquisition. Bleacher Report can be used as a vehicle for increasing awareness of live betting options.
As awareness increases, so does interest and participation.
DraftKings Outlook For 2020 And Beyond
Some downturn in revenue is unavoidable for 2020, given the truncated nature of the sports schedule for the year and widespread economic instability.
But it’s safe to say that DraftKings has made the most of the few opportunities they’ve been afforded this year.
The company’s stock price has soared in April and May after experiencing a 40% decrease in early March.
DraftKings Stock Price Trends
- 6-Month Low: $10.05 (November 27, 2019)
- 6-Month High: $33.39 (May 27, 2020)
- Percentage Change: +232.2%
- Live Price: $34.37 (pre-market)
Once major sporting leagues like MLB, MLS and the NBA return to play, which could come in mid-to-late summer, revenues should quickly return to pre-pandemic levels.
The single biggest hurdle for DraftKings right now will be the company’s ability to break into the Illinois market, which is the top emerging sports betting market in the country.
Illinois recently legalized both retail and online sports betting but included a “bad actor” clause that would impose an 18-month hold on daily fantasy companies looking to enter the online betting market.
DraftKings is currently searching for a loophole that would allow it to sidestep this prohibition.
With COVID-19 wreaking havoc on Illinois’s budget, look for the state to consider lifting the prohibition against DraftKings to increase tax revenues.
Regardless of the outcome for sports betting in Illinois, DraftKings is positioned to be an American sports betting titan for years to come.
News tags: Bleacher Report | Coronavirus | COVID-19 | DraftKings | DraftKings CEO | DraftKings Sportsbook | Illinois | Jason Robins | live betting | MLB | MLS | NBA | Peyton Manning | The Match | Tiger Woods | United Kingdom
With a dual background in English and sports performance and business analytics, Carter aims to write stories that both engage and inform the reader. He prides himself on his ability to interweave empirical data and traditional narrative storytelling. When he isn’t keeping readers up to date on the latest sports betting legal news, he’s banging his head against a wall regretting his decision to be a Tampa Bay Buccaneers fan.