CalvinAyre.com’s Becky Liggero chatted with DraftKings CEO Jason Robins about what his company has done to stay ahead in the growing U.S. sports betting market.
When gaming operator DraftKings first entered the New Jersey sports betting market, it was prepared for the worst, which CEO Jason Robins credited for the company’s success so far.
“It’s blown away our expectations. I can’t tell you that we thought we would be first. I thought it would be much more competitive, and we’d be later to the market… I think that might have been a big factor, in why we’re beating everything. I was a little surprised that we got out first,” Robins told CalvinAyre.com. “I know a lot of other companies have been in Jersey and are doing sports betting in other markets, so we were surprised that we were able to get out first, but we did. Numbers are just off the charts. I think we’re like somewhere 300%-400% above our forecast range right now.”
As good as things have been, Robins continues to be cautious. When asked how to maintain DraftKings’ advantage, he said, “We knew competition was going to come. We expected actually to be competing with others from day one, so we’ve been thinking about it that way and preparing for it that way for a while. We’re doing a lot of marketing. We also are really continuing to invest in our product, getting it out the door. It’s just the first inning. Now we have a lot of work to do to make it better and better, and we felt like we had to catch up, and eventually we did. We built a better product, but it took a while. Now, we’re playing from ahead, so we need to make sure we don’t get complacent… I think if we do those things, then we’re going to continue to have the best product in the market, and the best product always wins, especially if you put some marketing juice behind it.”
Competition comes not just from licensed companies, but Robins believes customers could discern the advantage of transacting with legitimate businesses. “It’s a little bit more expensive than the black market, because it has to be with the additional cost, but in return, you know your money’s safe, you’re not breaking the law,” Robins said. “I think those things matter to people. I also think being able to have transparency and know who this company is, where they’re located, those sorts of things matter to people. We’re going to try to keep as competitive as possible with the black markets, but hopefully, if it’s a little bit more expensive, people understand that, and they’re willing to pay for it because of all those other things.”
His company is still studying market data, and Robins is reluctant to make conclusions, but notes similarities in demographic to daily fantasy sports. “Also, most of our customers now are people that were already playing fantasy sports that are crossing over,” he said.
With more and more states in the U.S. legalizing sports betting, Robins says the U.S. has the most potential among countries. “If any new states open up, we’re prepared to go there. That’s definitely a top priority… If [a new state] opens up, it probably should be evaluated the same way as going to the UK or going to Australia as a business, and if there’s an opportunity to go anywhere internationally, we’re going to do it. We’re going to look at all the markets that way, but just by nature where we build our database and our brand, I think the U.S. will be our biggest opportunity.”