DraftKings Eyes Possible Expansion Into Streaming Entertainment

by Dave Schwab - 5/18/2021

DraftKings got its start as a popular daily fantasy sports site (DFS). It quickly expanded into a sportsbook when the US Supreme Court gave individual states the right to regulate legal sports betting within their borders in May of 2018.

More recently, the Boston-based company is moving more towards becoming an omnichannel sports entertainment conglomerate. A few months back, DraftKings acquired the Vegas Sports Information Network (VSiN). It then signed a $50 million-dollar deal with Meadowlark Media to obtain the broadcast distribution rights for Dan Le Bartard’s network of shows.

The simple fact that former Verizon senior management executive Brian Angiolet was brought in has the company’s new head of media operations highlights these recent corporate moves.

Along with being the second-biggest legal US sportsbook in terms of market share, DraftKings has made it crystal clear that it plans to become a player in digital sports media and TV. This has led more than one industry analyst to speculate about the company’s next move in this realm.

Jed Kelly is an internet analyst for Oppenheimer Holdings which is a full-service investment firm. He recently stated that:

“We see DKNG making a larger push into streaming, where they can put the sportsbook experience into users’ homes and integrate sports analytic content.”

He suggests that the company’s long-term expansion plans go well beyond sports betting services. The big picture could evolve DraftKings into a much broader sports entertainment company operating multiple streams of revenue.

Streaming options would be a practical expansion of current marketing tactics for the emerging legal US sports betting industry. DraftKings formed a strategic partnership with Sling TV streaming services to launch its own channels. The company has also established a working relationship with DISH Network to expand into the satellite TV segment.

Entry into the virtual multichannel video programming distribution industry (vMVPD) offers the allure of diversification and well as additional revenue streams. DraftKings core business right now covers retail and online sports betting, DFS and online iGaming including casino games in select markets.

There is a tremendous opportunity for growth in each of those gaming verticals. However, the crossover between legal sports betting and TV and digital media properties is only going to increase in the coming years.

While legal sports betting in some form will be legal in more than half the states in the US by the end of this year, more than a few major markets may still be out of DraftKings reach. The biggest ones that come to mind are New York and Florida depending on how legal sports betting is launched in these two states.

Also, it could take years before legal sports betting comes to Texas and California as two other major US markets.

Live streaming would create opportunities for a few more revenue streams while the national picture for legal online sports betting and casino gambling plays itself out.

This also raises the question of potential partnerships or outright acquisitions among the vMVPD sector. One suggested partner with the proper synergy is fuboTV as it pertains to in-game sports betting. However, this is just pure speculation at this point in time.

DraftKings continues to build a substantial war chest for future acquisitions with as much as $3 billion in cash. The company has already established a reputation for quickly pulling the trigger on deals that align themselves with its aggressive expansion plans.

Start:	November 22, 2024 @ 6:10 PM
Expert:	Tony George
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DraftKings Eyes Possible Expansion Into Streaming Entertainment

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