DraftKings is bullish on its chances against its archrival this NFL season.
Speaking at the Bank of America 2024 Gaming and Lodging Conference on Thursday, DraftKings CEO Jason Robbins said he sees an opportunity to cut into FanDuel's 51% net gaming revenue share edge with the start of the NFL season.
“I’ll probably eat my words saying this, but we feel almost a virtual certainty that we can achieve that because we have a clear line of sight and we know looking at FanDuel what they’ve been able to get to,” Robbins said. “I do think we have a lot of upside there. How quickly it will materialize, we’re going to be careful on overpromising, but I think we have a clear path and line of sight of what we need to do to get the hold rate up by nearly 100 or 200 basis points if not more.”
Robbins said DraftKings has historically lagged behind once the NBA season begins because of fewer parlay holds. He believes the online sportsbook, which had a solid second quarter with 26% year-over-year revenue growth, has “course corrected” and is in better shape to compete with FanDuel in the NBA. However, it starts with giving customers better legal sports betting products during the NFL season.
"We have a pretty good picture of what we need to do. We just need to go out and blow it out during the most important time of the year."
How they’ll get there
With Thursday’s NFL opener between the Baltimore Ravens and Kansas City Chiefs, DraftKings has introduced a new live betting product that Robbins feels will make a huge difference this year.
“One of the big things that we’re doing is launching Betvision, which is the low-latency NFL feed,” Robbins said. “That’ll be alongside the improved interface for the live betting experience for the NFL. That’s a big area of focus, just driving live betting for us and I think having that Betvision integration will really help.”
DraftKings recently acquired Simplebet, a micro-betting supplier partnered with numerous sportsbooks. The purchase was “an attractive deal” that allowed DraftKings to not only enhance micro-betting markets but also cut costs, since operators pay a revenue share to use Simplebet’s products.
Robins says the NFL season will give a great sense of their year, and that he wishes their fiscal year began with the NFL kick-off. A lot of excitement but also a lot of nervousness with NFL's start. Overall, thinks the company is in the best place it's ever been.
— Geoff Zochodne (@GeoffZochodne) September 5, 2024
A new focus
The live betting market is where Robbins sees huge growth potential. He claims DraftKings has evaluated the European market, where “roughly” 70% to 80% of the wagering comes from in-game bets, especially in soccer. In the U.S., live betting is more in the 40% to 50% range, but Robbins believes football and baseball have more stoppages than soccer for bettors to place wagers.
“Can we enhance our live betting product to the point where we’re heads and tails above the competition? I actually think currently in live betting, we do have the best-in-class product so we’re starting from a position of being ahead here,” Robbins said. “I think there is an opportunity to make it better but also an opportunity to see if we can lean into marketing it and merchandising it more. We’ve never really focused on that.”
Other improvements
Robbins said DraftKings will offer better parlay packages that will help drive revenue during the NFL and college football seasons.
“Any time you have a new sports season it’s sort of an opportunity to reset behaviors and the way people are experiencing the behaviors,” Robbins said.
The CEO also said DraftKings is working on providing more in-game parlay packages that rely on “technical stuff that goes into creating a smooth customer experience.,” plus “back-end” improvements that users won’t necessarily notice, like crash-rate reductions, better page-load times, and increased market uptime and availability on cash outs for live markets.
“Those things are harder for the customer to see but really matter if you’re going to try to make a bet and it’s not available or you want to cash out and it’s not there for a particular market or it’s not available,” Robbins said. “Those are things that at worst could cost you volume but potentially lead customers to other products too.”
