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Why DraftKings Shot Up Almost 6% on Thursday

By Eric Volkman – May 28, 2020 at 6:57PM

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The sports-betting company is gambling on a live-streaming video service.

What happened

DraftKings (DKNG -1.24%) announced Thursday that it will start to deliver live-streaming video of sports events through its Sportsbook app. The company is partnering with athletic-content specialist Sportsradar on the project. It didn't provide the financial particulars of the arrangement.

So what

At least initially, the content provided won't be top-shelf U.S. pro sports. DraftKings is starting out with international offerings such as Bundesliga soccer from Germany and the Korea Baseball Organization. All told, around 100 leagues in various sports will be available within the app.

Bottom half of a pro soccer player holding a ball with his foot.

Image source: Getty Images.

DraftKings said that its customers who are logged in to the app and have a positive "wallet" balance can access this content. It's available to people located in every state except for Iowa; it didn't specify a reason for this exception.

"Live streaming by legal sports betting operators has become increasingly popular in Europe and around the world," DraftKings wrote in the press release trumpeting the deal.

Sports companies abroad offer live betting on many aspects of sports contests -- for example, whether a particular soccer player will be penalized with a yellow or red card during the game.

Now what

For DraftKings, the new push is just the beginning of a wider streaming effort, saying that, "as additional sports leagues return to resume play, DraftKings Sportsbook will explore potential expansion opportunities of the live-stream functionality." Investors will likely welcome this, especially if the live streaming helps boost the company's financials.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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