According to DraftKings CEO Jason Robins, “pent-up” demand for sports has pushed many people to try alternative sports betting markets.
Unfulfilled Demand for Sports Pushes Fans into Other Betting Markets
DraftKings CEO Jason Robins spoke to CNBC’s Jim Cramer on Friday, providing another update on the sports betting industry and particularly the uptick in demand for esports betting markets. He noted that many traditional sports bettors have turned to video games as a response to the cancelation of professional sports.
Speaking to CNBC’s Mad Money, Robins acknowledged that esports constituted a modicum of the overall financial results the company had been generating. “Until two months ago,” Robins said, “esports was really small for us.” However, since mid-February, interest in the activity has increased. Meanwhile, net revenue has grown by 30% to $89 million year-over-year, the company said in a press release.
Which Esports Have Been Able to Fill in The Gap?
There has been a spate of cancelations, leaving sports fans with very little to do. First, the NBA was canceled in March, followed by MLB and NHL in early April. March Madness hung on for a very brief moment before all games were canceled hours before the beginning of the season.
Yet, Robins sees esports as a segment that has stuck and experienced “a huge growth,” and particularly within DraftKings’ own operations. He remained cautious whether esports can continue to generate as much interest once professional sports are back, but he said people found it fun.
Penn National and DraftKings were among the companies who had just launched more determinedly into sports betting, and were immediately faced with one of the greatest hurdles the industry has seen to date.
Adapting to these market realities has been difficult, but DraftKings saw interest in all major events during the period, including the NFL Draft in April, the string of recent UFC events, and the return of NASCAR at Darlington.
All of the above, Robins said, indicated that people had a lot of “pent-up” demand for mainstream sports to be back. The success of events such as eNASCAR iRacing Pro Invitational has been occasioned by the photorealism of the competition, but the NBA 2K gaming league has struggled a bit.
Even during the current lockdown, the NBA 2K has not picked up as much as had been hoped for. In fact, the NBA has preferred to send star players to various video games competitions, but not the NBA 2K itself.
Budding Markets Can Still Grow Exponentially
During the Friday Q1 earnings call, Robins admitted that there is big potential in developing betting markets, esports included. He acknowledged that DraftKings has been able to develop engaging products for both SIM Madden games as well as eNASCAR.
The company has also added various betting markets previously thought of as too exotic to be featured, to its mainstream portfolio. That includes Korean baseball as well as live streaming for table tennis, Robins noted. DraftKings went public on April 24, seeing its stock portfolio value surging up over 42%.