The US online betting and gaming industry is at the “spring training” stage of its development with much more to come in terms of product development and user experience, says DraftKings chief executive Jason Robins.
Discussing DraftKings’ third-quarter results, Robins was asked what innings he thought the industry was in.
“I think we’re in spring training. I don’t think we’re even in the first inning yet, it is super early,” Robins said.
“We have not even rolled out a lot of what we are developing on our own platform, because we haven’t migrated over to our owned and operated platform yet.
“So there’s a lot, it’s going to take years to build.”
DraftKings has upped its revenue guidance from a range of $500m-$540m to $540m-$560m for 2020.
It said it expects $750m-$850m in revenue for 2021.
The group now has more than 1 million monthly unique players. Robins said there was more growth and scale to come.
DraftKings became the official sports-betting and daily fantasy partner of the Chicago Cubs and plans to open a sportsbook at Wrigley Field.
It also signed a similar partnership with the New York Giants and media agreements with ESPN and Turner Sports during the quarter.
Illinois and Ontario focus
Robins added that the company would focus on Illinois and the province of Ontario in Canada in the near future.
“Illinois, given its size and passionate sports fan base was a focus of our Q3 marketing efforts and a key reason for the increase in third quarter sales and marketing expense.”
Ontario is Canada’s largest province and is expected to lift a ban on private betting and gaming operators as part of new budget measures.
Timings are still unclear. But Robins said the company’s fantasy betting presence there has enabled it to build a strong user base. It would be applying for a license once the regulatory framework is set.
Big marketing spend
DraftKings revenues rose 42% on an annual basis to $133m during the third quarter.
But marketing expenses of $203m were the main reasons behind group losses of $197m, up from $160m on the previous quarter.
The group’s B2C segment generated revenues of $104m, a rise of 55% on the third quarter of 2019. That was largely due to online casino being launched in West Virginia and online sports-betting in Illinois.
A packed sporting calendar also helped.
DraftKings’ B2B revenues rose 11% to $29m in the quarter, thanks to renewal agreements such as Mansionbet.
DraftKings merged with online sportsbook solutions provider SBTech in late 2019.
It listed on NASDAQ in April and is expected to migrate to the new platform in September 2021.
Robins said DraftKings was “still feeling good about committing to that timeline.”
“We feel like we continue to be on track for our migration commitment through the second half of next year.
“And we feel very good about either being able to meet that or exceed that expectation.”