Online to Offline? Draft Kings Bets Big on Retail
It would appear that the folks behind Draft Kings are dead set on being a major player in the retail sportsbook environment in the United States.
This week, the Daily Fantasy Sports company (how long can we keep calling them that?) announced that it was building a retail sportsbook for Resorts World Casino in Atlantic City.
The sportsbook, which is said to be nearing construction completion, will be known as the “Draft Kings Sportsbook at Resorts World.” This is the second announcement for Draft Kings in a week about retail sports betting, with Resorts World joining the fold just as the Scarlet Pearl Casino in Mississippi was announced to be joining forces with the company for sports.
The Kings of Mobile Sports Betting?
Draft Kings, of course, came to prominence through daily fantasy sports, having built a huge online and mobile presence in the last 5 years.
This has given the company a lot of leverage when it comes to releasing mobile sports products, which can be seen in the New Jersey numbers. Draft Kings were the first sportsbook to be launched for mobile on August first, and continue to lead the way from a handle perspective into the fall months.
It is clear that the company has no plans to stick to being an online-focused shop, and these two announcements of retail sportsbooks are a clear indication that the company knows that having a full-service sportsbook offering is going to make them more attractive to casinos in other states across the country.
Why Get into retail anyway?
Draft Kings’ decision to get into the retail sportsbook game is two-fold. First, even though the majority of handle will likely come from their mobile app in New Jersey, having a retail location allows the company to start cross-promoting their brand to both online and retail players.
This gives the company a chance to build out loyalty programs on a much more comprehensive scale than if they stuck to online-only business.
Also, having a retail presence allows the company to be present in a state that does not yet have online sports betting available. This is the case in Mississippi, where for now only retail outfits are going to be able to take bets.
Clearly, Draft Kings wants to be in a position to lobby for online and mobile betting, and with a flip of a switch can turn on their mobile platform and invite members of their retail sportsbook at Scarlett Pearl.
Draft Kings is nimbler, but Fanduel has more backing
When sports betting became legal back in May, the two main daily fantasy sports companies chose to go two different routes with their businesses. Fanduel chose to be acquired by UK heavyweight Paddy Power Betfair, which put them in an excellent position to enter the U.S. market with a well-established global sports brand.
Draft Kings, on the other hand, chose to stay solo, instead choosing to raise a significant amount of capital for their U.S. sports betting expansion. At this stage, it is hard to say which plan will work out better. While we can’t rule out Draft Kings being acquired at some point, for now, they seem to be the more flexible of the two when it comes to what they can offer to a client in the U.S.
What’s next for Draft Kings?
Draft Kings isn’t stopping with these two announcements. The company is very busy trying to acquire new business in other states that have either launched or will launch sports betting in the coming year.
As well, as a result of their joint lobby effort with Fanduel to help legalize daily fantasy sports in Louisiana, the company will be working hard to get that legislation passed as quickly as possible so they can turn back on their DFS engine to areas of that state.
And, of course, with two retail sportsbooks opening shortly, Draft Kings will have its hands full with operations that will be new to the company. This will no doubt include some growing pains, as have been experienced by Fanduel (and others) since the launch of sports betting in New Jersey in June 2018.
One thing is certain – Draft Kings are a sure bet to be a major player in the regulated sports betting landscape for a long time.
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