Copyright The Boston Globe
DraftKings Inc. Chief Executive Officer Jason Robins said he sees a “huge incremental opportunity” in predictions market bets, but that the emerging business doesn’t overlap with the company’s core sports wagering products. Exchange-based betting is only about 5 percent of the market in the UK, according to Robins. DraftKings plans to launch its own prediction-based product in the US aimed primarily at states were online betting isn’t already legal. “The cannibalization isn’t a huge concern,” Robins said in a Bloomberg TV interview Friday. “We haven’t seen that happen.” The company reported revenue and user numbers on Thursday that missed analysts’ projections at the start of the NFL season and lowered its guidance for the year. The Boston-based sports-betting operator reported revenue of $1.14 billion, compared with the $1.22 billion expected by analysts. Advertisement Adjusted earnings before interest, taxes, depreciation and amortization showed a loss of $126 million, compared with the $77.8 million loss projected by analysts. Monthly paying customers, at 3.6 million, trailed analysts’ projections for 3.9 million. DraftKings lowered its forecast for sales and profit this year. It now sees revenue of $5.9 billion to $6.1 billion. The company previously gave annual revenue guidance for $6.2 billion to $6.4 billion this year. Guidance for adjusted earnings before interest, taxes, depreciation and amortization is now $450 million to $550 million. It previously forecast adjusted earnings before interest, taxes, depreciation and amortization of $800 million to $900 million. Robins said the weaker results were due to the outcomes of games favoring bettors. “That’s a temporary thing,” he said. “It’s not anything that has anything to do with the fundamentals of the business.” Advertisement DraftKings announced a new multiyear agreement to be the official provider of sports betting and odds to Walt Disney Co.’s ESPN division on Thursday. That deal, which starts Dec. 1, replaces the ESPN Bet product that Disney offered with casino operator Penn Entertainment Inc.
