DraftKings Thinks Sports Betting Will Eclipse DFS Revenue In 2-3 Years (And They’re Right)

Posted By Chops on August 27, 2018 - Last Updated on August 30, 2018
DraftKings Sports Betting

Ferris Bueller once said how life moves pretty fast, and if you don’t stop and look around once in a while, you could miss it.

Flash back to three very short years ago. The thought of Donald Trump being President seemed laughable. Bitcoin was trading at an all-time high…of $333. Single-game sports betting was illegal everywhere in the U.S. except for Nevada. The Force Awakens dominated the box office. And daily fantasy sports saturated TV with an aggressive advertising blitz not seen since the online poker early boom years.

Here we are in 2018. Trump is President of the United States of America. Bitcoin is trading near $7,000 after a high approaching $20,000. Sports betting is legal! THREE movies from the Star Wars canon have come out since the force awakened. And after briefly getting their teeth kicked in by the federal government, DFS is all grows up.

Gone are the 2015 DraftKings days of conference calls with ping pong going on in the background (true story, this happened to me), discussions where junior DraftKings business development reps alluded to ways of getting around regs in DFS-unfriendly states with a potential partner (also true), and CEO Jason Robins wearing wrinkled shirts on TV.

In its place are a mature operational infrastructure with legitimate seasoned industry bonafides, and a new Jason Robins with interview reps under his belt, looking downright stately, putting forth the notion that sports betting revenue will surpass DFS revenue within two to three years.

He’s right. And it may very well be much sooner.

A low hurdle to clear

First, while DFS has matured into an absolutely viable business, the entire industry realized approximately $335M in revenue the past year. DraftKings would be a (substantial) fraction of that.

Nevada, all by its little self, did $248.8 in sports betting revenue in 2017.

So (math, math, math) … multiple high-population states quickly eclipsing DFS in sports betting revenue seems attainable in relatively short order.

The fact that Robins is now publicly espousing this nugget means his internal projections might strongly agree.

How will co-existing DFS and sports betting look in 2-3 years?

An exciting component to the future DraftKings and FanDuel wager wars will be on the product development side.

Ultimately, the best product usually wins. How will they innovate? How will they most effectively integrate?

DraftKings is already rolling out new features like Flash Draft, enabling customers to draft a new roster in the middle of an NFL game. Is this something that could integrate or seed the waters for advanced in-play betting? Is that product roadmap already in place? Will it be as awesome as it potential sounds?

After decades of the U.S. being comically behind the rest of the world when it came to sports betting, all of the elements are in place for some exciting, innovative times ahead. DraftKings and FanDuel have a potentially ripe customer base already in place with respectable penetration in some key markets. How will a competition for sports betting dollars fuel product development and take this to a whole other level?

Let’s hope DraftKings, FanDuel and others figure this part out and deliver.

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Chops

Steve “Chops” Preiss has 15 years of experience in the gaming industry. Chops began writing and producing content for digital media sites during the early poker-boom years. He has twice been voted by his peers as one of the 20 Most Influential People in Poker. Chops has also written and produced segments for a primetime gaming TV show on Versus (now NBC Sports Network) and distributed a poker program to over 160M global households.

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