DraftKings has only been around for 8 years since it was founded in 2012 but it has been making ripples in the fantasy sports and betting segment. But is it really a good company to invest in? well, the best way to find out is to evaluate the company's performance so that investors can make a more informed decision. Things have been particularly shaken up in 2020 due to the coronavirus pandemic, and many companies have been affected. Let's have a look at how Draftkings has performed so far this year.
Draftkings goes public
Draftkings announced in April this year that it was gearing up to go public. The announcement raised eyebrows and was even considered ill-timed because there were no hockey, baseball, and basketball games available due to the coronavirus pandemic. The soonest games were scheduled for the end of August. However, the strategy that the company aimed to use to go public was also another unusual approach where rather having an IPO through which it would offer its shares to the general public, it decided to merge with another company called Diamond Eagle Acquisition Corp. The latter is a special purpose acquisition company (SPAC).
The reason for this approach was that it would have less friction than selling new shares through an IPO. Jason Robins, the CEO of DraftKings stated that he expected the company to perform well despite sports taking a back seat due to the coronavirus because they would eventually resume. The move was thus aimed at long-term performance. The company did manage to go public and it even closed the market on its debut at $19.35 which was 10% higher than its debut price. The company’s positive perception was not misplaced. There had been previous attempts to go public but they were not previously successful due to unfavorable sports betting regulations. However, that changed in 2018 when the Supreme Court abolished a 1992 law that banned commercial sports betting in most of the states.
The launch of its digital sportsbook in Colorado
DraftKings announced the launch of its digital sportsbook in Colorado on May 1 this year which marked a critical step for the company. This is because the state has the highest-rated sports betting platform on which wagers are placed on favorite sports events and leagues. The excitement was also because the sportsbook delivers exciting and engaging ways such as price pools for trivial games and even e-sports. The company has also maintained the excitement with the launch of many other offerings aimed at making it more appealing to users.
The company even launched an online casino on May 4th through a high-profile partnership with Hollywood Casino. The online casino is also available through the DraftKings Sportsbook app and it features casino favorites such as Roulette, Blackjack, and even slot machines. Draftkings also announced on May 28 that the Sportsbook app would also have live-streamed games thanks to a partnership with a global sports data provider called Sportradar. This announcement highlights the rapid pace at which Draftking has been expanding its offering to appeal to more potential users.
Launching a standalone casino app for New Jersey
DraftKings has been so committed to making its offerings more available to customers even with different regulatory requirements. Part of that commitment was demonstrated when the company decided to roll out a standalone casino app to target the New Jersey market. The company decided to focus only on its own games and a few classics such as Roulette and Blackjack. The decision was based on research findings which showed that the majority of Casino visitors on Draftking’s offerings focus heavily on the company’s branded games. This further supports the higher demand for a better and more modern user experience, as well as games that deliver a highly customizable user experience.
Draftkings decided to offer a standalone version of its Casino app in New Jersey instead of the overall offerings in its Draftkings Sportsbook app. The move is also aimed at making sure that the company is compliant with the regulations in the different states. Also worth noting is that Draftking is already part of the National Council on Problem Gambling which aims to help individuals that have been affected by gambling addiction. In other words, the company is committed to pushing for responsible gambling and gaming practices.
Diving deeper into sports data through modern technology
Draftkings and Stats Perform also extended their partnership on digital sports entertainment. Stats Perform is a leading sports technology provider that leverages technologies such as artificial intelligence and big data. DraftKings uses the partnership to access the sports data company’s data feeds which it then provides in its fantasy sports offerings. The partnership allows Draftking to access data on various major sports leagues such as the CFL, college football, NHL, MLB, and NBA among others. The extension of their deal will allow the company to continue offering the statistical data that users need.
Tapping into more partnerships
DraftKings also announced on July 9 that it collaborated with Twin River Worldwide Holdings to roll out an interim sportsbook Black Hawk, Colorado’s Mardi Gras Casino. This meant that guests could place their bets through DraftKings Sportsbook. It marked another important moment for the company because Draftking was making it possible for Colorado sports fans to legally bet on all the major sports leagues in the U.S for the first time, thus enjoying the first-mover advantage.
The company also extended its Casino app into Pennsylvania by mid-July after successfully launching it in New Jersey, therefore allowing more people to access its offerings. It also announced the launch of its Casino offerings in West Virginia through a partnership with Hollywood Casino. It followed up the aggressive rollout with the launch of another app called DraftKings at Casino Queen Sportsbook app in August, as well as an Illinois-based retail location. DraftKings also secured a multi-year extended deal that would allow it to remain the exclusive and official Daily Fantasy Sports (DFS) for the MLB.