DraftKings and FanDuel Set Trends with Parlay Promos
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SportsTranscript
00:00One that we all talk about here on the show, the two, I should say probably, are FanDuel
00:08and DraftKings, because those are the leaders and those are the ones that really set the
00:11bar for everyone else.
00:12They also, I know recently, had their earnings report, and not surprisingly, Sam, it just
00:18seems to me that everywhere I look for promos involve parlays, and if that's the case, that's
00:26telling me what's driving the bus for these companies.
00:29Yeah, you're 100% spot on, Craig.
00:33It's kind of like where there's smoke, there's fire.
00:35If these companies are going to continue to offer me more parlays and say, hey, we can
00:40juice your bet even better if you add another parlay leg, please do it.
00:44Here's all these promos around parlays.
00:46That's really telling you what they want you to do, obviously, and it seems to be working
00:50for DraftKings.
00:51In the first quarter, they had really impressive numbers, having a 9.5% hold, despite having
00:58one of the worst quarters in terms of sports results.
01:02A lot of favorites won, they got hammered in football, they got hammered in baseball
01:06early on, but DraftKings was able, basically, to weather the storm by offering so many parlays
01:13where they were actually able to squeeze more money out of their existing customers.
01:18This go-around, second quarter, is going to be really interesting because sports results
01:22have gone a lot better in favor of the books and worse against betters, presumably, because
01:26last quarter was one of the worst ever.
01:28Now it's about how is DraftKings able to take what they did with a really bad quarter, and
01:33wow, can they do an even more amazing job now that they had a normal environment to
01:38work with?
01:39They might be victims a little bit of their success with the last quarter.
01:45Investors are going to be looking for the lowest away quarter in terms of how much they've
01:50been able to grow revenue this summer and how much they've been able to grow a hold
01:54because all that fits in with their vision of having 10.5% hold at the end of the year,
01:59which doesn't make much sense unless you have context.
02:02The industry average is 8%, so that'd be a pretty big margin that they're hoping to get
02:07and, in turn, have their first year of profitability.
02:11It's going to be a pretty big report that investors are hoping comes out from DraftKings
02:17and hoping that it keeps them steady on this path, and I'm sure the market will react really
02:22quickly.
02:23As you said, these are the leaders in the space, so whatever DraftKings and Fando are
02:26doing, everyone else is going to follow.
02:28Caesars are starting to do more parlays because it worked with DraftKings.