For a time, Jason Robins seemed to be on the outside looking into the clubhouse.
Today, he and DraftKings are seated at the head of the table.
In the three years since legal sports betting began its rapid expansion across the U.S., DraftKings has gained mobile and/or retail sports betting access in some 65% of the available market.
In the vast majority of the states where it operates, DraftKings is No. 1 or No. 2 in market share. With sports betting in 22 states (including Washington D.C.), legal but not yet active in another six, and more than states with pending legislation, DraftKings will expand its presence.
Partnerships and marketing agreements have taken DraftKings outside the betting window.
Last month, Boston-based DraftKings caught the biggest fish in the ocean when it was named one of three official sports betting partners for the National Football League.
A few years ago, DraftKings, a daily fantasy-centric operation, had trouble gaining acceptance from the traditional casino community. In October 2015, Nevada gaming regulators told DraftKings, FanDuel, and other daily fantasy suppliers they needed to be licensed as sports betting operators if they were to continue providing the activity in the state.
Robins recalled that experience during a chat with American Gaming Association CEO Bill Miller last month for the trade organization’s “Cards on the Table” video segment.
“We felt like we were doing great things for the customer and we kind of got blindsided,” Robins said when asked about the company’s daily fantasy sports experience. “It was a real interesting experience when things were being written about us that weren’t true. I eventually stopped thinking about how do I get the truth out there.”
Instead, Robins focused on “what’s really as the heart of the matter.”
Sports betting’s legalization allowed DraftKings to show it recognized regulation as a good thing and the company welcomed operating in a regulated environment. He said DraftKings now attempts to “overcompensate” and go above what the regulations call for in order to protect the consumer.
Today, Robins is chairman and CEO of a company with a market capitalization of more than $21.5 billion. The growth trend was fueled by an initial public offering a year ago that saw DraftKings stock price rise more than 10% on the Nasdaq on the first day of trading.
DraftKings ended 2020 with $1.8 billion in cash and no debt. However, the company had nearly $500 million in marketing expenses during the year, which utilized some 77% of its revenues. That was one reason behind a $1.1 billion in debt raise in March that comes due in 2028.
Robins told Miller he was first exposed to legal gaming when he was studying abroad in Australia. When he turned 21, he would visit casinos, including trips to Las Vegas for March Madness. There was also the occasional poker game.
“I wasn’t winning much money, but I viewed it as going out to the movies or dinner. I was spending money on something that brought me great enjoyment,” Robins said.
But after the company’s efforts to gain acceptance for daily fantasy from the gaming community, Robins said DraftKings wasn’t just going doing do the minimum as it entered regulated sports betting.
He told Miller the company needed to “go above and beyond. We need to make ourselves the gold standard when it comes to compliance and when it comes to responsible gaming.”
As DraftKings went out in search of sports betting partnerships with media companies, professional leagues, and teams, he wanted DraftKings thought of “as a company that never gets its credibility questioned. You can’t make mistakes and we had to be as close to perfect as possible.”
That effort has paid off. Last fall, DraftKings announced a deal with the Chicago Cubs to put a sportsbook at iconic Wrigley Field.
Also, two Hall of Famers, basketball’s Michael Jordan and baseball’s Cal Ripken, Jr., became special advisors to the DraftKings board – as did Gisele Bündchen, the wife of future Hall of Fame quarterback Tom Brady. She is advising the board on environmental issues.
DraftKings also acquired the Vegas Sports Information Network (VSiN).
DraftKings also recently announced a multi-year agreement to become a primary sponsor of the Center for Gaming Innovation, housed within the International Gaming Institute at the University of Nevada, Las Vegas.
“We’re fortunate to partner with many companies,” Robins said. “We’re in a growth stage.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.