Sports betting operator DraftKings is claiming an industry first with the launch of branded gift cards, just in time for last-minute holiday shoppers.
On Wednesday, the Boston-based DraftKings announced a ‘strategic collaboration’ with Atlanta-based InComm Payments on the launch of an “industry-first retail gift card” bearing the DraftKings logo. The cards will be made available through a variety of retailers – including 7-11, Speedway and Dollar General – in denominations of $25 and $50, at least, to start.
DraftKings president Matt Kalish said the company was “thrilled to provide our customers with another way to fund their accounts and engage with our real money products through this first-of-its-kind offering.”
InComm senior VP Tim Richardson claimed DraftKings’ “large and passionate” fanbase would jump at the chance to exchange cash for plastic, while offering DraftKings “a significant brand expansion and enhancement opportunity.”
Many sports betting operators accept prepaid cards from companies such as Visa and Mastercard, which will now be sold alongside DraftKings’ new cards. But the usual suspects in the US anti-gambling brigade are likely prepping ‘think of the children’ claims that the DK logo will convince kids to buy the cards in the vain hope that they’ll be able to successfully register online betting accounts.
The holidays are traditionally filled with warnings from both problem gambling groups and state lotteries that adults shouldn’t purchase instant-win lottery tickets as stocking stuffers for anyone under the legal buying age for such products. It’s unclear whether retailers will be required to verify proof of age before selling a DK gift card.
Regulators in states where DraftKings holds betting licenses have yet to weigh in on Wednesday’s news, and DraftKings has a history of choosing to ask for forgiveness after the fact instead of permission before taking some bold step.
Investors will appreciate the fact that DraftKings will undeniably benefit from gift cards that are either never redeemed or only partially redeemed before being lost under the car seat or slipping under the sofa cushions.
Studies have shown that between 10-19% of gift card balances go unredeemed, while 6% of cards are never used at all. So basically, DraftKings has figured out a way to boost its balance sheet while simultaneously raising its brand profile. Expect all US-licensed sportsbooks to furiously chat up other card-issuers ASAP.