Jason Robins: DraftKings not expecting to be number one in Ontario
CEO claims impact of gray market operators going regulated will sway debut Canadian market
DraftKings CEO Jason Robins has suggested former gray market operators in Ontario will have the edge over new market entrants when the province’s regulated market launches in April.
In the US sportsbook operator’s Q4 2021 earnings call, Robins confirmed DraftKings has applied for an igaming and sports betting license in the province, ahead of the formal launch on April 4.
The DraftKings CEO highlighted Ontario’s population, which represents 40% of Canada’s total population, something which would make the province the fifth largest state, were it to be located within DraftKings native US market as a growth area for the business going into 2022.
However, Robins suggested despite Ontario’s “pretty meaningful” potential base, DraftKings overall strategy for Ontario has yet to be properly finalized.
“It’s something I think we’re still evaluating,” Robins told investors.
“It has igaming, something I think improves the overall TAM (total addressable market) available to us. Just as we do with external marketing, we’re going to do a lot of testing, and we’re going to base whatever decisions we make on what the data tells us,” he added.
DraftKings reported a 47% year on year revenue uptick in Q4 2021, but at the same time it reported further operational and EBITDA losses.
DraftKings has yet to be awarded a license to operate in Ontario, however Robins highlighted the impact of those unregulated operators already established in the province turning into regulated sportsbooks on the firm’s potential journey there.
“There’s been a gray market there for many years, in which a lot of the operators we will be competing with have already been operating in and have already had time to build customer bases,” Robins explained.
“We are not projecting the same level of market share in Ontario or in Canada in general that we are projecting in the US just because we don’t have that early mover advantage that we have in the US,” he added.
At present, only PointsBet and Toronto-based sportsbook operator theScore have been awarded licenses, which are conferred subject to an agreement being signed with iGaming Ontario, the province’s ‘conduct and management’ entity.
However, DraftKings’ main US rivals FanDuel and BetMGM have also suggested they will enter the Ontarian market. Addressing the potential path to profitability in the province, Robins suggested DraftKings would look to employ the same strategic goals as it does in the US market.
“I think the way we’ll approach it is the same way we approach everything else that we do. It’s going to be analytically based. We’re going to target two- to three-year paybacks. And I think, depending on what we see in the data, we’ll adjust accordingly,” Robins explained.
“But it should be a good market, it has igaming, it has sports betting, and we already have a decently sized user base of DFS customers there. So we’re pretty excited about Ontario,” he added.