A conversation that touched on Taylor Swift and Travis Kelce, pickleball, Formula 1 racing, and a flurry of field goals in the National Football League seems like it could have taken place in one of the coffee shops, bars, or hallways at the Global Gaming Expo in Las Vegas. Instead, those topics were broached, some in depth, others lightly, during the Wednesday keynote session “The Playmakers” moderated by CNBC’s Contessa Brewer and featuring the CEOs Amy Howe of FanDuel and Jason Robins of DraftKings.
Combined, FanDuel and DraftKings account for approximately 80% of sports betting in the United States. But how companies do business has changed dramatically since the Professional and Amateur Sports Protection Act was repealed five years ago.
“Maybe initially, live betting has grown a lot,” Robins said. “There are a lot of exciting new features, and a lot of new markets for customers. But I also think that the way that customers engage with the product has changed.”
Recently, FanDuel conducted a promotion in which 20,000 customers bet that every NFL team in the second week of the season would kick a field goal. Each team successfully kicked a three pointer, resulting in a $23 million payout for fans. Not the result FanDuel expected, but Howe said the promotion was successful. “It was fun, because I think it’s indicative of what sports betting is doing, which is driving real engagement and excitement.”
Speaking of fun … Brewer asked if FanDuel and DraftKings now factor in Taylor Swift’s presence when the Kansas City Chiefs play, since she’s supposedly dating the team’s tight end Travis Kelce.
Robins said the pop superstar is not (yet) affecting game-day odds, but there’s been more wagering on prop bets featuring Kelce. “Maybe our traders should be thinking is (Kelce) nervous if (Swift) is watching a game?” Robins said, which caused Brewer to reply, “He would just be able to shake it off,” eliciting a few groans from the audience at the reference to one of Swift’s popular songs.
While betting on football, both professional and college, is incredibly popular, Robins noted that the U.S. Women’s National Team has become a favorite with some bettors. “The only (soccer) team that’s bet on more than the USWNT is Miami with (Lionel) Messi. We’re definitely seeing a growth in women’s sports, with the WNBA and everything else.”
Brewer asked about the state of sports-betting technology, in particular if tech surrounding micro betting is evolving.
Howe replied that there are many possibilities that haven’t been captured yet. “If you think about the market overall, we’re still in relatively early days. You have New Jersey and Pennsylvania that you might think of as mature states, but the penetration rates are relatively low compared to what you see in more mature markets. And we still have more than 50 percent of the U.S. to open up from a product perspective. I think we’re at an inflection point where the U.S. is really driving innovation forward.”
Robins added that technology has evolved to a point where many of the issues present when sports betting started to spread across the country have been solved. “How do you innovate on top of that?” he asked. “How do you create new things that haven’t existed before? How do you bring new players in by making it a less intimidating experience, a little bit more user friendly to a casual player who doesn’t know what minus 150 means?”
Brewer noted that the American Gaming Association recently stated that American have wagered a half-trillion dollars on unregulated markets, “a giant shocking number,” she said. How do legal markets entice those bettors to wager on regulated sites?
Howe said that on average, 50% of internet searches for sports wagering land on illegal sites. In states including California, Florida, and Texas where sports betting isn’t legal yet, that figure rises to 80%.
“We’re in an interesting time where because sports betting has become so mainstream, it’s confusing the consumer,” Howe said. “And because some of these sites actually look legitimate, at the end of the day, we’ve got to keep doing the hard work to open up states (where sports betting is illegal).”
Howe added the industry has to keep promoting the message that it’s much better for consumers to wager in safe regulated environments. “You’re not going to get everybody, but over time, you should be able to do exactly what we’ve done in New Jersey, Pennsylvania, and all the other states.”
Rege Behe is lead contributor to CDC Gaming. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.
