DraftKings Expands its Content Reach, Acquires VSiN
DraftKings continues to expand its reach, announcing on Tuesday the purchase of sports betting video broadcast company Vegas Sports Information Network.
VSiN (Vegas Sports Information Network) began in 2017 with designs on delivering trusted betting information across different platforms.
The company is led by Brian Musburger, the nephew of VSiN headliner – and broadcasting icon — Brent Musburger.
“We created VSiN as a destination for sports bettors to find the most credible content to help inform their wagering decisions,” Brian Musburger said. “Harnessing the power and network of the DraftKings brand will allow us to reach an even wider audience with our unique content.”
DraftKings’ vision is for the VSiN leadership team to manage day-to-day operations while maintaining editorial independence. DraftKings intends to fully integrate VSiN’s current employee base located in Las Vegas, including its on-air talent, into its 2,600-employee global workforce.
From the joint company statement:
The acquisition will enable DraftKings, which is live with mobile and/or retail sports betting in 14 states, to further build out its content capabilities and will augment VSiN’s ability to broaden their audience alongside the expansion of legal sports betting in the U.S.
Among the leading online sports betting operators, DraftKings will leverage VSiN to bring increasing legitimacy to its sports-gambling customer base.
“This is a big jump-start for our content capabilities,” said Matt Kalish, the president of DraftKings, North America.
The acquisition enables DraftKings increased access to the millions of new customers in the legal sports betting universe.
"VSiN creates authentic and credible content that resonates with sports bettors at every level, whether they're experienced or new to sports betting," said DraftKings CEO Jason Robins in a statement.
“In addition to its brand equity among sports bettors and engaging talent roster, VSiN also has an established infrastructure that DraftKings can immediately help expand, in the hopes of adding value to consumers who are looking to become more knowledgeable about sports betting.”
VSiN produces up to 18 hours of content each day from its base in Las Vegas. Its reach, original content via multiple video and audio channels, includes:
- A 24/7 stream
- Comcast (CMCSA)
- Sling TV
- MSG Networks
- Rogers’ Sportsnet
- AT&T Pittsburgh
- Marquee Sports Network
- A dedicated channel on iHeartRadio and TuneIn
VSiN's current talent roster also includes former NFL executive Michael Lombardi.
In a note to clients, Jefferies analyst David Katz says the purchase "does not meaningfully alter the trajectory toward profitability near term but positions DKNG (DraftKings) for greater earnings power longer term."
DraftKings has existing broadcasting partnerships with ESPN and Dish Networks. It is also an official partner to the NBA, MLB, NFL, NASCAR, UFC and PGA Tour.
In addition, on Monday, DraftKings announced an exclusive license agreement with WWE.
New York governor, lawmakers remain at odds with deadline approaching
DraftKings stock fell 8.5% to about $58 Monday on reports that New York Gov. Andrew Cuomo and other lawmakers are at a stalemate over who would operate a potential sports-betting system in New York.
The online sportsbook operator’s shares were trading above $60 early Tuesday afternoon, having enjoyed a dramatic rise from one year ago when the stock was worth $12.44 per share.
Though the state appeared to be on the verge of approving mobile sports betting, Cuomo’s reluctance to open the competition has the clock is running out.
The new legislation, if it is to be included in the next budget, must be passed by Thursday.
According to a story published by Investor’s Business Daily, Santarelli added that if outside operators are not included in the current legislation, lawmakers would have until June 10 to pass stand-alone legislation.
A Deutsche Bank report now has listed New York as unlikely to legalize. Analyst Carlos Santarelli said in the note to clients that the same issue remains unresolved: Cuomo wants mobile betting through the state lottery, but many lawmakers "want a multiple skin model in the hands of commercial operators."
It’s a controversy that has strong support on both sides.
Cuomo’s plan could be better for the state of New York; the competing plan would be more beneficial to sports bettors and online sportsbook operators such as DraftKings, FanDuel and Penn National, which operates Barstool mobile sports app.
In research work from industry tracker PlayNY, an open market could draw $37 billion in bets, $2.5 billion in operator revenue and more than $300 million in tax revenue over the first four years after launch. A closed market could draw $7.5 billion in bets, $750 million in revenue but $375 million in revenue for the state.
"The bottom line is we believe an open market will offer broader benefits for the state and its residents," said PlayNY analyst Dustin Gouker in a statement.
“But a closed market should produce more revenue for the state, and that is tempting for policymakers."
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