The legality of daily fantasy has become a hot topic in the US after DraftKings and FanDuel unleashed an advertising push of epic proportions this month. Some believe DFS to be outright gambling, while others think that the game is skill-based. DraftKings CEO Jason Robins obviously falls under the latter category, and took the stage at the Global Gaming Expo in Las Vegas to debate the finer points of his view.
Robins speaks for packed house
The main conference ballroom at the Sands Expo was absolutely packed with viewers, most of whom came to see Robins’ portion of a panel he shared with other industry executives.
The DraftKings chief laid out his case for why DFS should be considered legal, comparing it to playing the stock market or a game of chess. After describing the sites’ users as predominantly men from the ages of 21 to 35, he made the surprising claim that only 15% of DraftKings players had placed a bet in a Nevada casino or at an offshore online gaming site.
Little overlap in DFS and sports betting demographics
If accurate, that statistic is great news for DraftKings’ overseas ambitions. Earlier this month, the site announced that it had received its UK gaming license and would open for business across the pond sometime in October. But some have questioned whether there is even a demand for DFS abroad. They highlight the fact that sports gambling is completely legal in many European countries, like the UK, and wonder if bettors will simply wager directly on the games themselves instead of playing DFS.
But if only 15% of DFS players are sports bettors, then there is still a big untapped market for those who enjoy analytical games, but don’t bet directly on sports.
In his speech, Robins said that “DFS players do their homework. It’s like the stock market. They enjoy looking at something and trying to figure out something that someone else doesn’t see.”
Eilers’ industry figures
In a recently released report, Adam Krejcik, a gaming analyst for Eilers research, laid out some interesting industry insights.
- DFS entry fees will reach $3.7 billion this year and rise to $17.7 million in 2020.
- DraftKings raked in $10.9 million in revenue in the first two weeks of NFL season, while FanDuel counted $9.6 million.
- Altogether, DFS sites collect an estimated $110 million in entry fees each week. For comparison, Nevada casinos take in an estimated $90 million in bets on NFL and NCAA games during the same period.
- DraftKings has spent $224 million in marketing this year, for a cost of $192 per user acquisition
- FanDuel has spent an estimated $97 million in ads this year, spending just $110 per player
Before he took the stage, Robins spoke briefly with Geoff Freeman, CEO of the American Gaming Association. Freeman believes that the DFS industry currently operates in a gray area, but his organization would like to make it a black and white issue.
“If it’s legal, our casinos need to be involved in it,” Freeman said. “We’re focused on clarity.”
Perhaps not keen on brick-and-mortar casinos taking away DraftKings’ market share, Robins gave Freeman a lukewarm response. “We want to help you out any way we can, but I hope you respect what we are doing,” he said.