DraftKings CEO: Live betting accounted for over 50% of handle in Q1
Jason Robins says runway for in-play growth remains strong, as he notes last year's M&A to boost pricing capabilities played a key role in developments
DraftKings CEO Jason Robins has stated that more than half of the operator’s Q1 handle was derived from live betting as he talked up further growth opportunities in the space.
Speaking on an analyst call following the firm’s Q1 report being published, Robins championed the additions of Simplebet, SportsIQ, and Mustard Golf into the DraftKings ecosystem for the live betting improvements.
Sportsbook handle jumped 15.7% year on year (YOY) from $12bn to $13.9bn for the reporting period, leading to a 20.1% spike in revenue to $882m.
Extrapolating that figure, it could see DraftKings’ live betting handle hitting above the $7bn mark.
Additionally, pre-2024 live states reported handle up 11%, while DraftKings did note it hadn’t seen softer basketball handle, as its rivals Flutter did this week.
Robins said: “Live betting in Q1 was up to greater than 50% of our total handle, the first time that’s ever happened.
“We think there’s even more upside from there. As we’ve said, we’ve seen stats that it is as high as 70% or 80% of GGR for some operators in more mature markets.
“We think there’s a ton of opportunities there. MLB live handle, it’s early in the season, but it’s up 36% YOY for April.
“I think this past quarter was the first time I felt like [we are] actually really seeing impact on the live side [from M&A].”
The CEO also stated that should further M&A be sanctioned, it would likely come in the form of bolt-on additions similar to the trio of suppliers that were snapped up last year.
He added: “M&A is part of an evaluation of what’s the best way to create value for our shareholders.
“A good example of that would be the acquisitions we made last year, which we’re now seeing pay dividends in our increase in live handle, as well as the cost reductions we’ve seen by bring those costs in house.
“We thought that was a great use of shareholder capital because even with no revenue upside, which we do believe is there, we were easily paying back at our thresholds of cost of capital. Things like that may make sense, but they are part of an overall evaluation.”
Actual sportsbook hold for the quarter came to 9.5% as a favorable Super Bowl was offset by a customer-friendly March Madness, wherein 82% of favorites won during the tournament.
Structural sportsbook hold hit 10.4%, above expectations and 60 basis points up YOY.
On hold for live betting, Robins added: “I think it depends on the kind of live betting. If you’re talking about micro-betting, like next basket and next pitch, you don’t want to hold too high on those.
“If you’re talking about customers that are betting at halftime on the outcome of the game, that’s fine to have them making parlays and having higher hold products.”
Elsewhere, prediction markets got a mention, as Robins echoed Flutter CEO Peter Jackson’s notion that the vertical could act as precursor similar to that of DFS.
This week, Jackson said that prediction markets could “prime the pump” for eventual legalized sports betting expansion and that Betfair staffers had been engaged to look at entering the space.
Robins said: “I think as [prediction markets] continue to grow, that’s going to be a powerful level in that this is happening whether you want to or not. A way that makes sense is if you’re a Californian tribe or if you’re state that hasn’t legalized [sports betting] yet, do you want to watch it happen somewhere else?”