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DraftKings, FanDuel Generate 2/3 of NJ’s August Sports Betting Revenue Total
The New Jersey Division of Gaming Enforcement reported that the state generated $9.2 million in gross revenue, on a total handle of $95.6 million, during the month of August. DraftKings Sportsbook ($2.97 million) and FanDuel Sportsbook ($3.06 million) each accounted for roughly a 1/3 of the state’s monthly gross revenue total. The FanDuel Sportsbook at the Meadowlands was the state’s most profitable retail location, generating more than 3x the revenue Monmouth Park ($898,000) reported. DraftKings accounted for +/- 95% of the state’s mobile sports betting revenue.
Howie Long-Short: If you consider that $95.6 million was wagered in a month with just one week of college football, no NFL action and just a single mobile app (there’s now 7) live for the month’s entirety (and it was a soft launch until 8.6), it’s reasonable to expect the state’s handle to push $250 million in September.
Extrapolate the $6 million+ DraftKings Sportsbook and FanDuel Sportsbook earned in August by 30 states and those 2 companies alone could do $180 million/month in sports betting revenue by 2021; or +/- half of all annual DFS revenues worldwide. Of course, state populations and regulations ensure they won’t all generate equal revenues.
New Jersey sports bettors are getting wiser (and the lines are getting more competitive). Sportsbooks within the state saw their win percentage decline from 15% in July to 9.6% in August.
Fan Marino: On Sunday afternoon, DraftKings x Thuzio held a “Kickoff Bash” to celebrate the start of the NFL season and the launch of the DraftKings Sportsbook in Hoboken, NJ. Nick Mangold, Tiki Barber, Brandon Jacobs and WFAN host Mike Francesa were on hand to watch the games, take pictures and sign autographs. JohnWallStreet had the chance to catch up with Ezra Kucharz (Chief Business Officer, DraftKings) to ask a few questions about the company’s relationship with Buffalo Wild Wings, the prospect of Super Bowl squares and why DraftKings shouldn’t be valued as a sportsbook.
JWS: CEO Jason Robins recently spoke about capturing the underground gambling business (think: March Madness brackets, Super Bowl squares). Can we expect to see the DraftKings Sportsbook selling squares for Super Bowl LIII?
Ezra: We’re going to be responding to what the fans want. If fans want brackets and squares, they’re going to see brackets and squares. Yes, we intend to sell squares for February’s Super Bowl; Jason (Robins) talked about that last week at TechCrunch.
JWS: Jason was also recently quoted saying it was his belief that the company would hold a $10 billion valuation if 30 states were to legalize sports betting. To do that, the company would have to generate $770 million in earnings (if you used a 13x multiple). Is that a reasonable target to hit within 3 years?
Ezra: As it relates to valuation metrics, we’re not a sportsbook. We’re a technology company that does sports and entertainment. We happen to do games and now have sportsbook as one of our components, so our valuation metrics are going to be different than a traditional sportsbook.
JWS: FanDuel has the Meadowlands (a high traffic destination). DraftKings recently signed a partnership with a casino in Waterloo, NY (a low traffic destination). Is it fair to say that DraftKings is focused on the mobile/online sportsbook business as opposed to the retail business?
Ezra: We’re going to be driven by what the consumer and fans want and what they’ve resoundingly said is they want an online mobile sportsbook. Right now in New Jersey, if you want to make a wager, you can drive to the Meadowlands or to Monmouth racetrack, right? Or you can sit on your couch, take out your phone, download an app and gamble from your couch. You’ll see us do some things in retail, but we’re taking our time to figure that out.
JWS: While on the topic of retail, Buffalo Wild Wings (BWW) had made headlines about wanting to get into the sports betting business. DraftKings has a DFS partnership with BWW. Has the company had any discussions with BWW about a partnership on the sports betting side?
Ezra: No, we’re focused on fantasy sports with them right now. I think it’s premature, you know, I think everybody wants to see where it’s going to roll out and how it rolls out.
What is JohnWallStreet?
JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLF, ELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA). If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.