DraftKings CEO Looks to West Virginia After Legalization of Sports Betting

December 21, 2018

By Michael Teich

DraftKings CEO Jason Robins said West Virginia is the company's next, best opportunity for replicating the monster success it's seen in New Jersey as it rolls out a mobile sportsbook in the Mountain State.

"West Virginia is an early mover and I think they're being smart and thoughtful about how they actually legislated and regulated. There's reasonable taxes, they're leveraging a lot of the New Jersey model rather than trying to reinvent the wheel," Robins told Cheddar Friday.

And while the West Virginia population may be modest, he said there is opportunity to attract betters from the large student demographic as well as from people crossing state lines from Virginia, Pennsylvania and other large surrounding states.

DraftKings, a daily fantasy sports and sportsbook app, inked a deal with Penn National Gaming ($PENN) on Tuesday. The deal with the operator of Hollywood Casino allows DraftKings to be the first to launch a mobile sportsbook in West Virginia. DraftKings currently has a brick-and-mortar sportsbook in Mississippi and New Jersey, but mobile has been the key driver of growth in the sports betting business. Since June, 58 percent of dollars bet in New Jersey have been generated digitally.

DraftKings has capitalized on that digital opportunity, particularly in New Jersey. The company brought in $7.1 million in gross revenue for the state in November, and has already logged over 8 million bets on its mobile sportsbook since rolling out on August 1. Robins told sports media company The Action Network that DraftKings captures 60 percent of New Jersey's online sports betting market, and about 40 percent of the total market when including brick-and-mortar locations.

In another victory for the sports betting community, the Washington, D.C. council voted on Tuesday to pass legalized sports betting in the city. When the bill is signed by the Mayor and approved by Congress, the district will join the eight states that have already given sports betting the green light. Robins sees Washington, D.C. as a possible opportunity, but said he doesn't see eye-to-eye with its online strategy.

"We believe the approach they're taking, particularly online, is not the best one. It's one that will not allow for a lot of competition in the state right now. It's a sole operator state. If that's DraftKings, great. If it's not, it's unfortunate we wouldn't be able to offer our product. Even if it was us, I can't look at that and say that's what's best for consumers," Robins said.

Both in D.C. and in throughout the industry, Robins said more competition is better than less.

"Competition's a great thing," he added. "This is a huge market and the most important thing is that it grows and it grows in the right way."

As for the possibility of federal legislation to regulate sports betting, Robins said he has been surprised that the door seems to be opening to that possibility.

"Now I think there's maybe more opportunity than I thought to get more momentum at the federal level," he said.

For full interview click here.