This is a response to the phenomenon of larger players playing into small tournaments, and scaring away smaller customers. Draft Kings, as well as other DFS sites, have the same issue all other pari-mutuel type skill games have: Sharks trying to scoop money from the fish, and the fish leaving to swim in other waters.I can dig it @DraftKings. pic.twitter.com/Hjr1Yw9sbf— Dan Gaspar (@MrTuttle05) August 1, 2017
Draft Kings believes that without new players they will probably, over time, fail.
This interested me because a DFS site like this (and before them, places like Betfair.com) have to answer to one person for their success or failure: The Customer. It's pretty basic.
As time goes on, or if the structure of the business is dependent on more than a customer, that's when things can possibly go off the rails; for example, if the regulatory environment is leaky, if they have to pay high fees to racetracks, if they have to answer to shareholders.
The problem for racing in all this is that many of their competitors for the skill game gambling market are focusing on customers, and achieving top line growth. DFS, despite its problems with governments of late, has been growing - they're up to $3.2B in handle as of last year. Sports betting in Vegas, which is only one small slice of that type of wagering is growing - handle has doubled since 2006. E-sports, which is just beginning, has focused on their base and is building. Some scenarios have it doing $13B in handle in 2020, or more than horse racing currently does.
Helping your customer win simply means you're helping them enjoy the game more. Racing tends to lean on bankroll degradation - jackpot bets, higher signal fees, rebates to only large players - rather than bankroll generation. In itself that might be okay, but it's not 1950 anymore and the skill game markets they're competing with are now there to scoop tired and broke bettors up like never before.
Have a nice day everyone.
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