DraftKings’ Legal Betting Shows How Big Gambling Can Be

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(Bloomberg) -- DraftKings Inc., which launched in 2012 as a fantasy-sports company, is already on its way to doing more business in real gambling.

The company’s legal sports and online casino businesses in New Jersey have soared to a third of overall revenue, co-founder and Chief Executive Officer Jason Robins said in an interview. Right now, the company offers fantasy sports in 42 states, and mobile gambling in just one.

“We had no idea it was going to be this popular,” Robins said of iGaming, the online casino business that debuted in December. “Now we’re putting more behind it.”

The full breakdown of DraftKings’ New Jersey business is this: About 50% comes from sports betting and another 40% is from iGaming. The rest is daily-fantasy contests, where players compete for cash prizes based on the performances of professional athletes that they assemble into teams.

The numbers shed light on the future for the Boston-based company, and the potential for online betting. So far, New Jersey is a rarity, offering both mobile sports wagering and online casino games like blackjack and poker. But other states are on the verge of launching legal sports betting and four allow online-casino gambling of some sort.

Since many state legislators will take their time deciding whether to legalize one or both of those industries, fantasy remains an important part of the DraftKings ecosystem.

For example, as many as 200,000 customers are expected to enter a contest set to take place on day one of the NFL regular season. First place wins $1 million.

“We’re trying to reactivate as many people as possible this year,” Robins said of the contest.

©2019 Bloomberg L.P.

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