DraftKings CEO outlines opportunity ahead with new lane of betting
DraftKings CEO Jason Robins has called prediction markets the company’s most exciting growth opportunity since the Supreme Court ruled PASPA (The Professional and Amateur Sports Protection Act) unconstitutional in May 2018. The company is investing millions into its prediction product and aims to lead what could become a $10bn industry.
“Predictions is rapidly developing into a massive incremental opportunity, and we are moving with urgency. We expect to emerge as the leader in this nascent category. We plan to deploy growth capital to build the best customer experience in predictions and acquire millions of customers. This year, we anticipate significant step-function improvements to our predictions, including the integration of Railbird and launch for our Market Making division. We are targeting hundreds of millions in annual revenue for DraftKings Inc. predictions in the years ahead. We believe there is much more upside over the long term. This should translate to meaningful incremental adjusted EBITDA. In predictions, we have the playbook to execute and win.
We have been building DraftKings Inc. for more than fourteen years. A new growth lane opens, we move fast and execute at scale. Predictions is the most exciting new growth opportunity we have seen since PASPA struck down in 2018. Early signals are strong.
On Super Bowl Sunday, DraftKings Inc. predictions had the second most downloads in its category and delivered three times its prior record for daily trading volume. Customer retention is also strong so far, even with a product that is early and positioned to improve rapidly as we add content. In predictions, speed and execution, combined with a strong brand, smooth interface, and real sports modeling, trading, and technology expertise will determine long-term leadership. This is where DraftKings Inc. thrives.
Based on analyst estimates, predictions could represent a $10,000,000,000 annual gross revenue opportunity in the years ahead. We expect to capture it across multiple business lines, including customer-facing platform, our own exchange, and market making. We expect the volume on DraftKings Inc. predictions to keep building, growth accelerating through 2026 and beyond. Our goal is simple, we intend to lead the predictions category.
Tighter rules should reward operators with strong compliance and responsible engagement infrastructure, and support the expansion of sports-related predictions over time. We bring sports, trading, and technology together at scale backed by strong distribution. We originate prices and manage risk every day in our Sportsbook. We have hundreds of data scientists and machine learning engineers building sports models, plus a dedicated trading desk that fine-tunes live pricing in real time.
We combine that with a trusted brand, a large customer database we can activate efficiently, and marketing relationships like ESPN and NBCUniversal that give us flexible, high-intent inventory to deploy as returns dictate. We have run this playbook before. In Fantasy, Sportsbook, iGaming, and Lottery, we built leadership positions by steadily bringing critical technology in-house. In Sportsbook, we successfully integrated acquisitions and continued investing deeply in our proprietary technology to deliver the number one rated product. Our Sportsbook product is far ahead of our peers in uptime, which is the percentage of a game during which odds are available. Predictions is the next chapter of this same strategy. We have already designed our product to improve rapidly.
Our product is built to scale; DraftKings Inc. predictions already connects to multiple exchanges, we can stay nimble as trading options evolve and continuously expand content availability and liquidity. Our recent Crypto.com integration was an immediate upgrade in breadth and engagement, adding new trading options across categories such as player performance markets, golf, UFC, and politics. Next, we plan to integrate Railbird near the middle of this year to improve innovation velocity and strengthen customer economics by owning more of the stack. We are also launching market making because liquidity is a core part of customer experience in predictions. Contract listings, fees, market structure, and distribution matter, but tight two-way markets with depth are what attract participants.
Exchanges seed liquidity by incentivizing market makers, and DraftKings Inc. can lead market making for sports contracts because we model sports probabilities exceptionally well, and we have the infrastructure to provide liquidity across a broad spectrum of contracts. This creates two revenue engines for DraftKings Inc. and predictions. First, transaction fees, as we own the customer relationship through DraftKings Inc. predictions and offer a platform to trade across sports and non-sports. Second, trading economics for market making and proprietary trading on our own exchange and where it makes sense on other exchanges. Over time, we also intend to introduce exclusive combination trading options that may become a major differentiator as the customer’s experience evolves.”
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DraftKings CEO outlines opportunity ahead with new lane of betting DraftKings CEO Jason Robins has called prediction markets the company’s most exciting growth opportunity since the Supreme Court ruled PASPA (The Professional and Amateur Sports Protection Act) unconstitutional in May 2018. The company is investing millions into its prediction product and aims to lead what…
The post DraftKings goes all in on prediction markets appeared first on G3 Newswire.