The DraftKings RTO was made public this week in a $3.3 billion deal.
Of interest to me, was their investor package, page 17, as below.
The bar chart on the right is revenue (with 65% of the U.S. population being legalized to wager). Notice that the projected revenue for Daily Fantasy Sports is $0.3M or $300M. This is dwarfed by the $2.3 billion from sports betting.
As we all know, DraftKings started as a DFS company.
We've spoken a lot about the monetization of critical mass here on the blog. Namely, if you have a lot of people with a propensity to spend money with you, this group has a good deal of future value. DraftKings has leveraged their critical mass to build not a DFS company, but a gaming company.
This is not unlike Betfair's critical mass in the mid 2000's, with one million customers and $3B on account, with over 50% of their players engaged in horse racing. Nothing was done to foster this critical mass - not by lack of trying by Betfair - and that mass moved onto something else.
When people like me - and I'll caveat this with WDIK - talk about creating critical mass through lower takeout, this is kind of what we're getting at. If you have 200,000 people giving you 4% margins, it's a hell of a lot better than the current 20,000 or so giving you 20% margins. 200,000 people you can work with; with 20,000, you're simply focused on squeezing to meet revenue targets.
Have a nice Friday everyone.
Sinking marketing money directly into the horseplayer by seeding pools is effective, in both theory and practice In Ontario and elsewher...
One of life's many mysteries on gambling twitter is the Jackpot Bet. Oftentimes people like @shottakingtime, echoed by others, will pos...
It's Friday - the weekend! - where the tracks are ready to fire-up some serious betting entertainment. As we know, that's primaril...
Yesterday we wrote about some (many?) inside the business who don't quite understand what we bettors do each day to try and scratch som...
Innovation and horse racing. Put together, the two of them elicit feverish reaction in this sport. One one side you have the customers, alon...
The pandemic and resulting discombobulation has certainly thrown things out of whack in horse racing, and some narratives are being turned o...