Tabcorp's Investment in Pick 'Em DFS: A Surprising Move
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00:00 (upbeat music)
00:03 - Okay, now here's a really good point.
00:05 Why would anybody want to invest in the DFS landscape
00:10 if your name is not FanDuel and DraftKings right now?
00:13 We've seen so many states have sports betting legalized
00:16 and then all of a sudden looking over and saying,
00:18 "Why are these guys operating in our space
00:21 without paying tax?
00:22 You gotta go."
00:23 And they're succeeding.
00:24 But yet this company called TabCorp
00:26 is investing in the Pick'em DFS.
00:28 Maybe Matt, they know something that we don't.
00:31 - They might.
00:33 And look, TabCorp knows an awful lot.
00:35 They're a publicly traded company in Australia.
00:37 They used to be a heck of a lot bigger,
00:38 but they just spun off their lottery segment
00:41 into its own business.
00:42 But they are still a huge sports betting
00:45 and horse betting company in Australia.
00:48 It's a company that I used to cover closely at an old job.
00:51 I don't check in on them too much
00:52 since we're mostly focused on the US,
00:54 but I looked at their half-year earnings and here they are.
00:57 They're investing in this company called Dabble.
01:00 They have put eight figures into it so far
01:06 with millions of dollars.
01:08 And so they obviously think
01:10 there's something happening here.
01:11 They've specifically invested 1.75 million US
01:16 in what they're doing in the US.
01:18 And that is what surprises me
01:21 because the Australian product is focused more on
01:23 like a social betting company
01:26 where you could follow your friend's picks
01:28 and talk trash on there with people.
01:32 In the US, they're focusing on these Pick'em DFS games.
01:35 And I just don't know why they're doing that now, Craig.
01:40 The investment came in December
01:42 when we knew back in September,
01:45 the beginning of football season,
01:46 that these games were being looked at closely
01:49 by states like New York, Michigan, and Florida,
01:53 because frankly, the regulators think
01:55 that these products just resemble parlay cards
02:00 or parlays that you can bet on
02:02 in these legal sports books a little too close.
02:05 And so that really made me scratch my head.
02:07 Look, I think it's fantastic for US sports betting
02:12 if Tabcor is interested in getting in, right?
02:15 You always wanna see companies coming into a marketplace
02:18 that know what they're doing.
02:19 Tabcor knows what it's doing.
02:22 So is it making this push right now
02:25 because it was relatively cheap at less than $2 million
02:28 and they're already starting to see customers from it?
02:31 Look, they had 630,000 registrations
02:33 since it launched in October,
02:36 and 440,000 of them have actually funded and bet.
02:41 So maybe they're just trying to build up
02:44 a player database in the US
02:47 for some push they have coming.
02:49 I'm not sure, but this was surprising to see
02:53 because you have companies like PrizePix
02:56 that had to pay out $15 million
02:59 for operating in New York without a license.
03:01 That isn't gonna be the only kind of payment
03:04 that we see, in my opinion.
03:06 A lot of these companies are gonna have to do
03:07 what they need to do to get right
03:10 in order to eventually either just get the right DFS license
03:15 or get into sports betting
03:16 as some of them have ambitions to do.
03:19 So this was an interesting note to come across
03:23 in a check of some news that I didn't think would turn out
03:27 to be much of anything from TabCorp.
03:29 But yeah, them investing in the Pick'em DFS right now,
03:33 I don't know that I would advise anybody
03:35 to invest in Pick'em DFS right now
03:37 until we know exactly what that looks like moving forward
03:41 because there are an awful lot of states
03:43 that are just not seeing it as a kosher product right now,
03:47 especially when they have regulated sports books
03:51 in their state that are paying a much higher tax rate
03:54 typically than the DFS companies
03:56 if the DFS companies are paying a tax
03:59 at all in those states.
04:01 So yeah, interesting one for sure,
04:03 one that I'm gonna keep my eye on.
04:04 But overall, TabCorp, if they're interested in the US,
04:07 that's great.
04:08 Bring more people that know what sports betting is
04:11 into the US marketplace anytime.
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