Robins: ‘Biggest challenge is not to mess up’
Robins: ‘Biggest challenge is not to mess up’
DraftKings profit projection, Genius’ vision thing, Endeavor’s OpenBet boost + More.
DraftKings projects $2.1bn of adj. EBITDA profit by 2028.
Genius Sports talks up the vision thing.
Endeavor shows the benefit from OpenBet acquisition.
And ESPN Bet launches.
Climb in the back with your head in the clouds and you're gone.
Progressing nicely
CEO Jason Robins suggests DraftKings will press home No. 1 advantage.
Above us only sky: Speaking during the company’s investor event, Robins put the case for why he believed DraftKings was now the number one sports-betting and iCasino operator in the US, with the “only limit our imaginations”.
“We’re able to innovate at an extremely high velocity,” he suggested, pointing to the ~1,500 product engineers who were “driving a better customer experience”.
“We are not taking our foot off the gas,” he added.
“We believe that our velocity and pace of product innovation will continue to be faster than any other operator in the US online gaming space, which could result in further share gains over the coming years.”
Progressive era: The latest innovation off the production line is what DraftKings call ‘progressive parlays’, a multiple parlay picks offering, which, Robins said, was another example of the company being able to “control our own destiny.”
The product will allow customers to win even if specific legs of their parlay lose.
It has the “potential to generate higher parlay mix and leg count and thus higher hold percentage,” Robins said.
DraftKings, he added, could “confidently” say it has the “best same-game parlay offering in the industry”.
Robins also promised more to come: “There’s so much stuff left on the roadmap that we think is obvious to do,” he said.
Economics 101: Robins and CFO Jason Park put the case for how the state-by-state economics were producing a virtuous circle of lower customer acquisition costs, higher hold rates and increased profit from existing customer cohorts.
DraftKings is forecasting adj. EBITDA of $900m-$1bn in 2025, $1.4bn in 2026 and $2.1bn in 2028.
Crucially, this is from existing states only or 50% of the US population with OSB and 10% iCasino.
“To be clear, we absolutely expect additional states to legalize and launch OSB and iGaming over the next few years,” Robins added, pointing out the company would be operating in 25 states as well as Puerto Rico in 2024.
Points mean prizes: Noting DraftKings has “obviously” been gaining market share, Robins said there had been a 1,000 basis point improvement within the last year. “Our playbook is getting better and better,” added Park. ”Put simply, more recent states have citizens who are geared up and ready to go when their state finally launches online sports betting.”
He said future legalization beyond the current roster of states would provide “long term upside” of up to $6.2bn of further adj. EBITDA should every state legalize.
We’re in the money: Asked about DraftKings’ plans for the growing cash pile, which Park said would be north of $1.2bn at the end of this year – with more being added “for the foreseeable future” – he hinted the company felt it right to “explore other adjacencies outside of OSB and iCasino”.
“DraftKings has the right to play and the right to win,” he added. “I think we'll explore those and that could be a place we allocate capital.”
Robins said of the future that the “largest risk is just execution”.
“For the first time we control our destiny and certainly my job is to ensure we don't mess that up,” he said.
** SPONSOR’S MESSAGE ** EveryMatrix delivers iGaming software, solutions, content and services for casino, sports betting, payments, and affiliate/agent management to 300+ global Tier-1 operators and newer brands. The platform is modular, scalable, and compliant, allowing operators to choose the optimal solution depending on their needs.
EveryMatrix empowers clients to unleash bold ideas and deliver outstanding player experiences in regulated markets.
Notebook
Private chancer: Australian-based slots manufacturer Ainsworth said going private was one option being considered by a strategic review that was revealed on Monday in the Australian Financial Review. The shares rose 13% on the day as the article speculated a sale could also be considered, with 50% shareholder Novomatic the likely contender.
By the numbers
Indiana: Statewide GGR was down 9% YoY to $220m with OSB GGR down by 3.6% to $45.2m on handle that also fell 3.7% to $430m. Steve Bittenbender from GDCG suggested on X the sports-betting decline was related to the recent opening of the Kentucky market.
Maryland: OSB revenue after promo deductions came in at $38.7m, up 80% YoY, on handle that rose 9% to $483m. FanDuel continued to lead with 52% vs DraftKings on 31%.
Iowa: Statewide GGR was down 2.7% to $160m in October but sports betting increased 26% to $24.2m on handle that rose 7% to $255m.
What we’re reading
Made you look: The New Yorker takes on the Sphere.
ICYMI
ESPN Bet launches today. Here’s what’s being said. And here. And here.
Revolutionary road
Vision on: Genius Sports was keen to stress the importance of its BetVision product, which CEO Mark Locke claimed “revolutionizes the way sports bettors engage with the NFL”. The product launched in late September with Caesars, Fanatics and BetRivers.
BetVision brings with it real-time NFL stats, computer augmentation, in-play betting markets and integrated bet slips.
Locke said it “simplifies and enhances the discoverability” of in-play, noting that 54% of bets made by BetVision streamers were in-play, while in volume terms 83% was in-play vs. 20-25% historically.
The difference is significant for Genius; Locke pointed out the company takes a 1.25% cut from pre-match bets vs. 5-6% for in-play.
Steppin’ out: The sports data and technology provider once again upped its FY guidance, raising its revenue prediction to $412m and adj. EBITDA to $53m. This after Q3 revenues came in marginally ahead of consensus at $102m, up 29% YoY, with adj. EBITDA coming in at $18m. Locke noted the company would “step into” free cash flow territory in H2 this year.
Product+More: Recent earnings commentary has touched on the subject of streaming the NFL. Richard Schwartz, CEO at Rush Street, which as noted has deployed BetVision, said it was still “very early days” with the product. “But certainly, we think the ability to offer streaming of content is helpful, especially if you can offer some bets alongside that experience,” he added.
Meanwhile, Jason Robins, CEO at DraftKings, which has yet to sign up to BetVision, said the streaming of NFL was “something we continue to evaluate”.
“We had a really full product roadmap going into the NFL and didn’t end up prioritizing that one,” he told analysts on the Q3 earnings call.
Earnings in brief
Endeavor: The Ari Emanuel media and entertainment giant gave some detail on its sports data and betting technology segment in last week’s Q3 earnings, which showed revenue up 167% to $125m, bolstered by the acquisition last year of OpenBet. Segment adj. EBITDA was up fivefold to $19.8m.
On the call, Emanuel noted OpenBet had launched with Opap in Greece during the period and was looking forward to opportunities in Brazil.
On the sports data side, COO Mark Shapiro said the company’s IMG Arena unit was “”very content” being the number three operator in the market behind Sportradar and Genius.
Recall, Endeavor is currently undertaking a strategic review that could see major shareholder Silver Lake take the group private once more.
SJM: The continued progress of the Macau market was displayed in the Grand Lisboa operator’s revenues rising more than fivefold to HK$5.4bn ($692m), while the company registered an adj. EBITDA profit of HK$566m vs a loss of HK$968m in Q322.
Galaxy Gaming: Departing CEO Todd Cravens said that, despite some challenges in Q3, 2023 is “shaping up to be a record”. Revenue for the quarter rose 3% to $6.1m but adj. EBITDA fell 36% to $1.5m.
Sharplink Gaming: The fan activation and fantasy provider saw revenues rise 153% to $3.3m, with net losses coming in at $2.9m, up nearly a third on the same period last year.
Analyst takes
Jefferies on Entain: Looking ahead to BetMGM’s investor presentation on Dec. 4, the team suggested that from Q1 next year the JV will be hoping to lean into the product enhancements promised by parent Entain’s Angstrom acquisition as it hopes to boost OSB market share.
Referring to earnings commentary from both companies that they might be looking to pump more money into the business, the analysts estimated this at ~$50m each.
They also noted that “distractions” for MGM Resorts, such as the recent cyberattack, meant when it comes to a potential bid for Entain, MGM “may sit on the sidelines until clear US market share gains are visible”.
And CBRE: Also downgrading Entain was the team at CBRE, who said the “confluence of headwinds” from H223 would persist throughout 2024, with the issues in the UK and Australia being “more impactful and lasting longer than initially expected”.
The team added that while Entain “does have a compelling turnaround story in the works”, they are still downgrading the shares to a ‘Hold’.
CBRE likewise believed the situation re BetMGM is “unlikely to change under current market conditions”.
** SPONSOR’S MESSAGE ** Originally founded in 2003, BettingJobs grew rapidly and quickly matured into the full recruitment service provider we are today. We are a globally renowned resource for making qualified connections worldwide.
Our industry experts will be attending SiGMA Malta 2023. If you are a candidate seeking your next iGaming role or a client in need of professional hiring advice, contact us to arrange a confidential meeting at the conference.
Calendar
Nov 15: Codere Online, FansUnite, Gambling.com, Better Collective (e)
Nov 16: Better Collective (call)
Nov 29: Kindred, Rivalry
An +More Media publication.
For sponsorship inquiries email scott@andmore.media.
