DraftKings (DKNG 11.49%) has established itself as a leader in online sports gaming, and assuming more states allow gambling in the years to come there is a clear path for the company to grow in its core markets. But co-founder and CEO Jason Robins sees no reason the company should limit its ambition to just the business lines it is today.
On this clip from Motley Fool Live recorded May 19, Robins talks with Industry Focus host Nick Sciple about the opportunities he sees for the business in the years to come.
Nick Sciple: What are some of these other markets where you see potential to expand into maybe outside of sports betting? When you think about international markets, a little bit more mature when it comes to betting. How are you thinking about that?
Jason Robins: Well, certainly, geographic expansion in our current product portfolio, that's an obvious one. I also think we can expand into new product lines and revenue lines. We've recently made some moves to start to explore the content business. I think that could be a very interesting expansion point for us. It's not really I think a controversial point of view that media and content intersects greatly with online gaming. It's clearly very synergistic, so I think there could be an interesting opportunity there. Simple way to put it is, the customers on our platform, as they do more gaming, they increase their appetite for content, and then as they consume more of that content, they increase their appetite for the gaming, so it's really a flywheel that gets created, and right now, we're only partaking in one part of that flywheel. I think we could partake in the media and content side as well. That will be both through things that we do organically, but also through relationships that we build and deals that we do externally. We have a lot of deals right now including companies like Turner, ESPN, UFC, NFL, many others that I think really are content companies and licensing companies at the core. So lots of interesting things to do there, I think. There's other types of products in the gaming space we don't currently offer like poker. I used to be a big poker fan, I still am, but I used to play a lot of poker. I have a I think strong understanding as well as a lot of survey data to back up that there's heavy overlap between that product and the sports products that we offer. Then I think, there's other products that are completely outside of content or gaming that we could get into. They just overlap really nicely with our customer base. That's really what we get excited about. We obviously have a long way to go, but Amazon started just selling books and look where they are now. So we have similar ambitions to just continue to expand product and really all center it around making sure that anything we do are focused on creating a great customer experience and putting the customer first and at the center of every decision we make.
Sciple: That makes a lot of sense on the content side. We've seen your relationship that you've entered with Dan Le Batard as well as some others. I think that the natural follow-up is one of your competitors, Penn National (PENN 5.90%), their relationship with Barstool Sports, seems very much along those same lines, the collision of content with sports betting. What do you make of their approach and what they're doing?
Robins: I think it's based on a very similar view that there is tremendous synergy between the content media side of the business and the gaming. I think Penn figured that out and their way they're approaching it is through Barstool. Obviously, Barstool and Penn have gotten some traction, so there's something to it. I think that they're really just pursuing the same strategic view around those synergies that we are and they did it a little bit earlier in that regard in terms of making a big move. Most of what we had done was relatively small scale until recently. But I think you're going to see us get much more aggressive now. We just hired a chief media officer, a guy named Brian Angiolet that was at Verizon, and we're planning on making a more meaningful move in this space.