Welcome to 2020 and a new volume of the PlayUSA series On The Record.
To kick off this new decade, I wanted to explore the explosive way DraftKings ended the year and attempt to understand what this means for the future of sports betting.
Ideally, you too ended 2019 with a merger announcement, a new partnership in New York, and the addition of New Hampshire to the sports betting portfolio — right?
You probably didn’t, but DraftKings sure did. Now, some might say — New Hampshire a state with a population of 1.356 million, what’s so significant about that?
With the addition of the Granite State, Draftkings firmly establishes itself as one of the top sports betting providers in the Northeast. The company now has operations in New Jersey, Pennsylvania, and West Virginia and is starting its conquest of the Midwest with Indiana.
DraftKings now has five sports betting states, an established network of daily fantasy sports players, and on top of that, a new exclusive partnership with Madison Square Garden that includes the NY Knicks and NY Rangers.
And that’s not all.
The company is merging with sports betting technology provider SBTech, and both are being acquired by Diamond Eagle Acquisition, which is already listed on Nasdaq. Is that too much to process? If so, don’t worry. I found someone to help clarify all this information.
A brief discussion with DraftKings co-founder Matt Kalish
In addition to co-founder, Matt Kalish is also the chief revenue officer for DraftKings. I reached out to him and asked if he could answer a few pressing questions for me.
The following interview has been edited and condensed for clarity.
What does the launch in New Hampshire mean for the company?
As a New England-based company with our HQ in Boston, as well as a good number of employees who either live in New Hampshire or a short drive away, we were excited to win the opportunity to establish a presence in the Granite State. We are excited to have the opportunity to work with the New Hampshire lottery as the exclusive mobile provider in the state.
Are there any retail sportsbook locations you are looking to open in 2020?
As part of the deal with the New Hampshire Lottery, we will be opening some retail locations in the state. We are in the process of identifying appropriate sites for retail sportsbooks. Ultimately, we believe the mobile and retail sports betting experiences are complementary and work well together.
What is the next sports betting frontier? Is DraftKings monitoring any specific states?
We are keeping a close eye on every state that is considering legalizing or has legalized sports betting. We were excited to see bills progress in states like Michigan and Colorado. Our goal is to get a path to market, apply for a license, work to get regulatory approval for launch, and then go live as quickly as possible.
If other sports betting companies attempt to follow and become publicly traded companies, what does that mean for the future of sports betting as a product?
I can’t speculate on what other companies might or might do. But we think the US has the potential to become the world’s biggest sports betting market. Upon closure [of the deal], DraftKings will become the only vertically-integrated pure-play sports betting and online company based in the US. DraftKings is well-positioned to play a leadership role in the US market.
Where do we go from here?
Kalish is right when he said DraftKings is “well established to play a leadership role,” as the company is basically writing the playbook. You monitor a state, provide some testimony on a bill, apply for a license, and boom — you become the dominant force in the sports betting space. That makes the future of sports betting anything but dim.
With Michigan now in play, and Illinois coming to the table, the Midwest is well-positioned to challenge any region as a sports betting hub. Expect it to become the next primary market as expansion steadily moves West.
The northeast market is far from done; there are still a few places that might get their five minutes of fame — Massachusets and mobile wagering in New York, to name a few.
The south will, eventually, become the crux of college football betting, which leaves us with Nevada and the west coast. So far, Oregon and Colorado have been soaking up the spotlight. But until the Golden State decides that it too wants to be part of the sports betting conversation, California will remain a glistening gem off in the distance.