DraftKings Increasing in Size by 75%, Pivoting to Legalized Sports Gambling?
DraftKings has embarked on “an aggressive hiring campaign”, designed to increase the size of the company by 75% (from 425 to 700+) over the next 18 months; with 600 employees relocating to new office headquarters (still within Boston, but 105,000 SF), in 2019. The announcement comes just weeks after the SCOTUS heard New Jersey’s argument to revoke the federal ban on sports betting; a decision that many have assumed, if it were to go in NJ’s favor, would signal the end of daily fantasy sports. Instead, DraftKings is doubling-down; looking to build on its edge over rival FanDuel and continue to expand internationally (currently in UK, Ireland, Germany and Austria). The private company would not release user acquisition or revenue figures, but says both are up YOY.
Howie Long-Short: CEO Jason Robbins referenced the development of new products and the diversification of offerings in the company’s press release, leading many to assume he’s talking about legalized gambling. While the company owns a valuable user database that would significantly help its transition into the sports betting space, several pro sports leagues (see: MLB, NHL) are invested in the company; complicating a potential pivot. Then again, you don’t increase your staff by 75% to simply license your database; I would expect DraftKings to overcome the hang-ups and look to get-in on the sports betting gold rush.
Fan Marino: While DraftKings focuses on growth, FanDuel focuses on profitability; a goal it expects to reach for fiscal 2018. Why? There are rumors the company is actively pursuing a buyer.
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