Big expectations for 2020
Jason Robins, co-founder and CEO of DraftKings, has said that the sports betting giant expects to increase its revenue by 30% to $540m in 2020.
This announcement comes only one week after the daily fantasy sports and sports betting company announced a major merger with SBTech and unveiled its plan to go public in 2020.
the sports betting giant expects to increase its revenue by 30% to $540m in 2020
Robins made the company’s expectations for 2020 known during a recent investor call. He also said that the company is aiming for additional growth of 30% in 2021. This would see revenue jump to $700m.
He believes that these results can be achieved thanks to the synergies and scalability of the new merger deal. Robins said: “As we scale our combined businesses we believe we can achieve more than $1bn in EBITDA on a revenue base of $3.7bn in the US alone.”
According to forecasts, the value of the newly formed company will be in the region of $3.3bn. As well as merging with SBTech, it has been bought by Diamond Eagle. This company will change its name to DraftKings, with the sports betting company then becoming listed on the NASDAQ.
As there is not going to be a traditional IPO taking place, this indicates that there does not need to be a public raising of capital for the company.
Thanks to this deal, DraftKings will be the only vertically integrated online gaming company and sports betting operator in the US.
It will be able to streamline numerous areas of its operations due to the merger with SBTech. This means that DraftKings will no longer need to avail of external services in areas such as risk management once current arrangements come to an end.
Vision for the future
Robins has a vision for the company to be the
best, most trusted and most customer-centric destination for ‘skin-in-the-game’ sports fans.”
This will be achieved through the development of real money sports products and offerings that are highly entertaining. He hopes the company will permanently transform the manner in which sports are experienced.
He went on to identify five key areas in which DraftKings is looking at in order to fuel revenue growth.
He believes the company is ideally located at the intersection of the burgeoning digital sports gaming and entertainment space.
According to Robins, the global entertainment and gaming industry is worth $2.5tr. With a mature market in the United States, Robins believes there could be gross revenue of between $14bn and $23bn up for grabs.
Robins believes that DraftKings could secure $2.9bn to $7.4bn just from the US market alone.
At the end of the call with investors, Robins reiterated the massive potential the company has going forward in the space.