23.2M Americans to bet on Super Bowl LV: RPT
DraftKings CEO Jason Robins joins Yahoo Finance's Dan Roberts and Brian Cheung to break down the latest in sports betting, as Amercians gear up for Super Bowl LV.
BRIAN CHEUNG: Well, obviously, the big game is coming up this Sunday. Patrick Mahomes and Tom Brady set to face off in Tampa. A dangerous three-point spread on the game with the quarterback from Kansas City the favorite for Super Bowl MVP. Now obviously, a lot of people are paying attention to the odds as the American Gaming Association estimates that 22.3-- 22.2, rather, million Americans are expected to place about $4.3 billion in bets on just this game.
So let's talk a little bit more about this with Jason Robbins. He's the CEO of DraftKings. And Yahoo Finance's Dan Roberts joins us for this conversation as well. So starting off with you, Jason, I mean, more states than there were last year are now live for all night sports bets for this particular Super Bowl. Do you have any metrics on what type of volume that DraftKings is expecting and how do you compare that to maybe other sports events during this pandemic, like the NBA Finals last year?
JASON ROBBINS: Well, we're in a quiet period so I can't give any metrics. But I will say that the Super Bowl is the biggest sporting event of the year by far in the US. And, you know, there's tons of betting, not just on the game itself but on props, even before and after the game, ranging from the coin flip to what color the Gatorade is going to be. We have somewhere 250 and 300 prop bets on our app right now. So it's a pretty exciting time.
BRIAN CHEUNG: Well Jason, I mean, broadly, how about the visibility of the platform? There are also more, as there are more states that are allowing betting, there are also more apps offering sports books. So I know that DraftKings has an ad that you guys will be airing during the game on Sunday. But how important is visibility on Sunday when it comes to just your platform and marketing?
JASON ROBBINS: I think it's really a great moment. I mean, the Super Bowl is a time when people actually pay as much attention to the commercials, in many ways, as they do the game. So, you know, it's a pretty big opportunity for advertisers. And, you know, like you said, it's really expanded a lot.
When the Supreme Court overturned the federal ban on sports betting less than three years ago, the first Super Bowl we did, we were in one state for online sports betting, New Jersey. Last year, we were in five states for online sports betting. This year, we're in 12. So, really big growth in terms of the number of states that have allowed it. And I think that it's close to 30 states now that have active legislation. So we could see more and more open up in the coming years.
DAN ROBERTS: Jason, Dan Roberts here. As Brian alluded to, you know, we're seeing a lot of you guys, you know, not just you at DraftKings, but FanDuel, and then BetMGM also, rapidly launching these online sports book apps as soon as states legalize and as soon as they can get them up and running.
And I guess, I'd ask how you try to distinguish yourselves because if you are in a certain state that didn't have legal sports betting, and then it gets announced that now it does, and all of a sudden, you've got FanDuel, DraftKings, BetMGM as apps that you can use, how do you guys try to target it better and say you should come use DraftKings, and how is it different than the other two options?
JASON ROBBINS: Well, I do think FanDuel is a bit different from BetMGM at this juncture. If you look at states where either one or two, and there are one or two in pretty much every state we're both active in, and the two companies definitely are the most effective I think online and mobile right now.
BetMGM has certainly made some moves in recent months. And we have a lot of respect for them. They're a great competitor. And we think they're here to stay. And they're going to be fighting hard to try to grab market share. So we just have to stay that many steps ahead.
Really, where we try to differentiate ourselves is on the product side. We're the only truly vertically integrated company in the space, where we control everything. Now, we haven't migrated to our own platform yet. So what we're going to offer is going to really just go that much-- be that much better, once we complete the migration to our own platform, which we expect sometime in the second half of the year.
And I think once that happens, you're going to start to see a lot of really differentiated product offerings. One of the challenges now is that the products look a lot more similar than different across all these different apps. And it's really been more about marketing and data science, which are important things, too, and we invest a lot there. But we think in the coming years, product is going to be our biggest differentiator.
DAN ROBERTS: Got it, and then another sort of new trend, or at least not brand new, but it has accelerated that it feels like has really characterized this NFL season, is the rapid announcement of team specific betting deals. DraftKings announcing we're now the official betting partner of whatever franchise. And FanDuel is doing it as well.
Now, obviously, these deals can't be kind of big revenue gainers for you guys. I guess I'd ask what the game here is, what this arms race in trying to hurry up and sign team specific deals does for you guys. Is it more of a marketing vehicle? Is it prestige?
JASON ROBBINS: Yeah, they're all a little bit different. Definitely there's a marketing component to virtually all of them. There are some that are a bit deeper than that, where we co-create content and do more integrated type stuff. It really depends on the appetite of the partner. And we like to be very flexible and really understand based on the partner and what they have and what also is allowed in the state.
For example, our partnership with the Cubs in Chicago, we're actually going to have a retail sports book at the Wrigley-- at Wrigley Field. So that's something that because of the laws in Illinois has allowed. Some other states don't allow that. So it really kind of depends on the individual state, the individual partner. But I think Wrigley is a great example where we've had a partnership with the Cubs for many years. And we found out that Illinois was going to allow them to have something at their stadium.
We thought that was just an incredible opportunity to deepen the partnership. And, you know, I think that could end up being the largest physical sports book in the country at some point. There's just no better place right now with more surrounding population than where they're located in Chicago.
DAN ROBERTS: Wow. And then, Jason, if we zoom out, while we have you, I want to ask you your take on the last few weeks with the explosion in retail investors and the kind of mania that happened with the Reddit-driven movement of stocks like GameStop and AMC. Because, you know, as this practice has proliferated amid the pandemic, there's been big overlap with sports betters.
You know, the thinking earlier in the pandemic was that a lot of these kind of young retail investors that are swiping fast on Robinhood and buying up stocks are the same young people that are using services like DraftKings. So I'm just curious what you think and whether you've watched this from your perch at DraftKings and think there's kind of market opportunity here for you to get some of these quick swiping stock traders over to DraftKings.
JASON ROBBINS: You know, I haven't really thought about that. We've been so focused on the growth of our own business with all these new states opening up. And, you know, as you mentioned earlier, really making sure we're competing and having effective offerings for the customer.
I do think that it's been wild to watch from a spectator seat. I mean, I've never seen anything like it in my life, what you saw with GameStop and some of these other stocks. But it's really emblematic of the whole last year. We've seen a lot of paradigm shifts, whether it's new discussions on social justice, whether it's everything that's happened as a result of the pandemic, and now we're seeing disruption in the stock world, so-- and the securities world.
So, I don't know enough about it to really have a strong opinion. But, you know, as a spectator, just like you and everyone else, it's been-- you probably know more about it than me, so I shouldn't compare. But like most others, it's been pretty amazing and pretty wild to watch. That's for sure.
DAN ROBERTS: Absolutely, and you mentioned all the sort of shifts we've seen across the sports landscape and in the culture. I guess, I'd ask for your short-term future outlook. I mean, you mentioned the Super Bowl is your Super Bowl, as the phrase goes.
But once that comes and goes, how do you kind of move the needle forward? And what should we expect to happen, especially because sports are still being disrupted by the pandemic, you know? You can't have full attendance at games. And you wonder what that will have in terms of effect on sports betting and on TV ratings moving forward.
JASON ROBBINS: You know, one thing that's been very encouraging is that even as the pandemic numbers worsened during the last few months, the sports leagues figured out a way to get through it. And I read an article recently on the NFL and how they kind of really innovated on their tracking and data that they gathered.
And they were able to actually create more nuanced views on-- it's not as simple as 15 minutes. And it depends on how enclosed the space is. Mask or no mask matters a lot more when you're in a tight area like a car versus outdoors. And they have such incredible data now that I actually think it's going to be easier, not harder. Obviously, you never know what's going to happen. I don't take anything for granted, given all the events of the last year.
But I'm very optimistic that both professional and collegiate sports have figured out a way to do this that's safe. And they're going to continue to get better and better. And hopefully that coupled with a smooth rollout of the vaccine over the next several months. And hopefully the future in terms of sports schedules is a lot less unstable than it has been over the past year.
BRIAN CHEUNG: Well, we'll definitely have to see about that. But Jason Robbins, CEO of DraftKings, in addition to Yahoo Finance's Dan Roberts, thanks for joining us this afternoon.