Daily fantasy sports operator DraftKings is getting out its begging bowl once again, this time to fund its single-game sports betting aspirations.
On Monday, political and business news site Axios reported that DraftKings was talking to investors about launching yet another funding round. The company is reportedly seeking between $150m and $200m to have its new single-game sports betting operation up and running before the kickoff of this year’s National Football League season.
For the record, this will be the tenth time since 2012 that DraftKings has sought to raffle off a piece of itself in order to grow its business. The most recent round in March 2017 raised nearly $119m. According to Crunchbase data, DraftKings has raised over $715m to date via these funding rounds.
Despite the sports betting hubbub, Axios reported that DraftKings is telling investors that it expects DFS to remain its primary revenue engine for the foreseeable future, given expectations that the state-by-state rollout of legal wagering across the US will not move swiftly.
In other words, investors shouldn’t expect a quick return on their investment, as DraftKings is not yet believed to have turned a profit despite its dominance of the US DFS market with archrival FanDuel.
FanDuel recently merged its US operations with UK-listed gambling operator Paddy Power Betfair, who will provide the real-money sports betting technology for the FanDuel-branded sportsbook business. DraftKings has yet to reveal whether it’s mulling a similar union or whether it plans to spend the new investor cash developing an in-house sportsbook product.
Earlier this month, DraftKings announced that it had partnered with Atlantic City’s Resorts Casino Hotel to deliver a “web-based and mobile” sportsbook for the venue. DraftKings previously established a New Jersey office in order to take advantage of the expected launch of legal wagering in the state following last month’s US Supreme Court ruling that struck down the federal betting prohibition.
DraftKings announced Monday that it had formally submitted its application for a sports betting license to New Jersey’s Division of Gaming Enforcement, the first time the “DFS isn’t gambling” firm has explicitly associated itself with a gambling product. DraftKings also announced that it had appointed Karl Gambin as its Director of New Jersey Gaming Operations.
Given the tight timelines, DraftKings is either well on its way toward completing that new sportsbook product, or it’s planning to use the new investor cash to buy an existing product and/or sportsbook operator.
