In a remarkably-long — 39 minutes — and sometimes disjointed interview (thanks to the host), DraftKings CEO Jason Robins on Monday offered some interesting insight on the company’s outlook on sports betting and daily fantasy sports.
This interview came on Mike Francesa’s WFAN sports talk radio show in the New York area, which is as big a platform as one could hope for.
One issue of note was how DraftKings needs to compete for a consumer’s entertainment dollar.
“We talked about two summers ago, when we started to see a little bit of a drop-off with some of our [DFS] players, and I said to my team, ‘What’s happening?'” Robins said.
“And they said, ‘People are going to the beach.’ So I’m like, ‘Well, we’re competing with the beach — we’ve got to be better than the beach. You have to make a product where, instead of going to the beach with their friends, they want to sit home and watch baseball all day and play daily fantasy sports on DraftKings.’ That’s how we’ll know we have been successful.”
“We’ve got to compete with anything anybody could do with their discretionary dollar. It’s doesn’t matter if it’s going to a nice dinner, going to the beach, or playing the lottery.”
Sports betting industry’s biggest fear
Robins also said that sports bettors who suddenly seek to place an atypically large bet face scrutiny — for good reason.
“Where all this comes from is, there are amazing things happening with sports fans, and what are the things that could screw all this up? How do we protect against that? As soon as people start betting beyond their means — that’s one of a handful of things that could bring the whole industry to a grinding halt. We’ve got to not get greedy.”
Both observations by Robins are just common sense — but it’s not often the points are made so bluntly. This, however, was part of an interview with a host who acknowledged he does some sort of business with DraftKings.
That may explain why Francesa claimed that “DraftKings is number one in New Jersey” — rather than market leader and rival FanDuel. It’s true that a big part of FanDuel’s edge is its partnership with the Meadowlands Racetrack as what is said to be the largest-handle sportsbook in the world, but FanDuel even noses out its rival in mobile sports betting.
New York, New York
Francesa early on posed an appropriate question about why New York is so late to the sports betting dance. DraftKings is almost ready to launch sports betting at the Del Lago casino in remote, upstate, Waterloo, New York — in fact, late word has it arriving on Friday — while two other NYS casinos already have launched, and the Catskills presumably will soon have that offering as well.
“We’re hoping it will happen soon,” Robins said of mobile sports betting. “We’re working hard behind the scene with lawmakers to get it done, and we’re hoping it happens in the next year or so.”
That indeed is the most likely time frame — but casual WFAN listeners who don’t follow my stories on that saga would have no idea that the Albany lawmakers already are done for the year and don’t figure to hammer out anything on this front before next June.
“What happens is that when all the stakeholders [in a state] sort of agree, and there is not opposition, it flies through,” Robins said. “Whenever there is opposition [such as Governor Cuomo], then it’s hard for lawmakers. Sometimes the easiest thing for lawmakers to do is to say, ‘Let’s wait and see how it plays out, then I’ll know what’s best.’ They are not experts, and beyond that is priorities — there is a lot of stuff going on in New York, and as much as we love sports and I love sports betting, this may not be number one on their list.”
Robins described the New Jersey market as “the crowning jewel that people look at” for sports betting, adding that the market there has grown “14 times, year over year.”
As for why sports betting is growing so rapidly, Robins chalked it up to “a perfect storm” of the 2018 U.S. Supreme Court ruling, a society ready to accept it, new technology that can maximize convenience and revenues, and the surprising turnaround and embrace by the sports leagues.
Robins got in a plug for a DFS contest for the opening Thursday night of regular-season NFL, with 294k openings at $10 apiece and a $1 mm payoff for the winner.
“The key thing is figuring out who’s getting the ball, and what the pace of the game is going to be,” Robins offered.
As chaotic as state-by-state legalization can be, Robins sees an upside.
“One of the nice things about state-by-state is that you get to look and see how things play out,” Robins said. “The downside for national [regulation] is that if you get it wrong once, it’s wrong.”
Background on Robins
When Robins, who grew up in South Florida, told Francesa he initially was a Cubs fan, the host wondered if he favorite player was Ernie Banks — who retired a decade before Robins was born — or perhaps longtime Banks teammate Billy Williams.
The correct answer was Andre Dawson, it turned out.
Robins, who is in his late 30s, added that Madden Football and StratoMatic were favorites of his as a youngster. He said a co-founder suggested the daily fantasy sports concept “seven or eight years ago,” and the rest is history.
“I didn’t think it would all grow this quickly,” Robins said. “You always think, ‘I’ll do something and maybe if I’m lucky, ESPN will buy it for a few million bucks.’ You don’t really think, ‘Wow, I’ll build this thing that is worth a few billion dollars.”
Francesa curiously asked if there will come a point that “you can do everything right from your seat. Will we see that day?”
Robins patiently answered that at sites such as MetLife Stadium in the Meadowlands, that day already arrived last year thanks to mobile sports betting legalization in New Jersey (and that doesn’t even address all of the illegal offshore sports betting that has gone on for years in and out of stadiums and arenas).
Francesa also asked if “heavy players” — big spenders — get a “bonus.” Hardcore gamblers in New Jersey might wince, since many say they get shut out of books they can consistently beat.
“We try to give everything to everybody, for the most part,” Robins replied, before getting cut off by the host.
Robins also was asked if DraftKings’ DFS business is hurt by sports betting.
“Fantasy is growing in New Jersey and across the board,” Robins said. “Over time, as people get a chance to bet, you’ll see some changing of the wallet — and for us, that’s okay. People will have the option to pick what they want to play.”