DraftKings CEO Jason Robins expressed confidence that the company is well-positioned to succeed regardless of the future of sports prediction markets, which could potentially face restrictions from the courts.
In a discussion with Wells Fargo on Tuesday, Robins stated that DraftKings is monitoring the evolving legal situation related to prediction markets. He emphasized that the company would continue making strategic decisions to maintain its competitive edge no matter how the legal outcome unfolds.
"It’s funny, if you ask me: I’d rather see them stay, but if they got shut down by the Supreme Court tomorrow, our share prices would pop," Robins said, adding, "We’re in a good position either way. We’re set up regardless of the outcome."
Robins remarked that, whether or not the Supreme Court limits sports event contracts, DraftKings seeks clarity on the matter, although the firm is not directly engaged in the various legal battles occurring nationwide. Among the cases awaiting Supreme Court attention are those from New Jersey, Robinhood, and Crypto.com.
"We don’t control that process, only the choices we make in how to invest and think about long-term value creation," he noted.
He highlighted that DraftKings has managed to secure double-digit market share in sports prediction markets across its operational territories.
"We’ve gone really quickly from objectively not the greatest prediction market to the best sports product," Robins stated, mentioning that the platform has gained over 1 million customers and anticipates reaching several millions by the end of the NFL season. He pointed out that DraftKings offers three times the number of NFL wagering options compared to rivals like Kalshi and Polymarket.
According to Robins, the prediction markets sector mirrors the online sports betting landscape during 2021-2022, featuring many competitors aiming to claim significant market shares.
"We welcome that," he said. "Our strategy is to win with our offerings, product, and customer experience. We think we’re executing that."
While acknowledging that the margins on prediction markets are slightly lower, he noted that gross profit could be higher due to strong cross-selling opportunities from prediction markets to other products in states where sportsbooks are not yet legalized, such as daily fantasy sports and crypto trading.
In addition to discussing prediction markets, Robins shared enthusiastic views on the broader DraftKings business. He reported that in the first two weeks of the NFL season, the company has experienced about a 15% year-over-year increase in handle, which he described as "enormous," particularly amidst concerns about potential cannibalization from prediction markets.
Robins also observed robust growth in iGaming shares within legal markets and projected that DraftKings is on track to achieve $1 billion in adjusted EBITDA by 2027.
He explained that a series of small operational decisions over time have contributed to regaining market share in iGaming states.
"It’s a lot of little things and execution over a sustained period of time," Robins said. "One or two don’t move the needle, but a collection of dozens or more over months or years add up. It takes time for customers to notice."
Reflecting on team dynamics, Robins mentioned significant changes in leadership and product direction that occurred nearly a year ago, which have led to a surge in growth momentum.
Currently, DraftKings is contemplating increasing its customer acquisition spending this year. Robins intends to provide more details during the company's Q3 earnings call in November.
"It’s too early to say magnitude, but with exciting early [NFL] results, we do anticipate spending more," he said, adding that decisions will be data-driven, with potential for significant new investment that could boost revenue next year.
