DraftKings CEO Jason Robins has admitted he could have chosen his words a little better after drawing fire for saying that his company did not want professional, profit-seeking bettors as customers.
DraftKings prefers recreationally-minded sports bettors
Robins initially made the polarizing comments last week at the Canaccord Genuity Group investor summit, where he said DraftKings prefers recreationally-minded sports bettors, rather than professional gamblers and bonus hunters.
At the summit, Robins equated betting to entertainment, rather than money-making. “People who are [wagering] for profit are not the players we want.” He added that bonus hunters and shoppers represented under 10% of the sports betting audience, and that they were “not the most profitable customers.”
After receiving criticism for the comments, Robins defended himself on Wednesday via a VSiN Follow the Money podcast. The chief executive affirmed that the Boston-based sportsbook doesn’t “ban people from winning.” However, he said DraftKings was not looking for customers who “manipulate the sports betting ecosystem.”
‘Billy Walters types’
During the podcast, Robins elaborated on the meaning behind his comments. He said DraftKings didn’t want “the Billy Walters types who are throwing money on one side to try to manipulate the lines and move them one way and mess around with the ecosystem. That’s not good for anybody.”
the firm has since bounced back
According to EGR Intel, Robins’ initial controversial comments caused DraftKings shares to drop, a slump which the firm has since bounced back from.
Robins and DraftKings also drew fire from other quarters. Jeffrey Benson, for instance, sportsbook operations manager at rival sportsbook Circa Sports, took to Twitter December 2 to affirm that his brand appreciates all kinds of customers:
Meanwhile, Kynikos Associates founder and iconic US short-seller Jim Chanos questioned DraftKings’ long-term staying power. In reaction, Robins pointed to the stock seller’s investment track record. He said: “When people are short selling and dumping shares, only so their other hedge fund buddies can try to buy it back at a cheaper price, that’s not really how it’s meant to work,” the CEO commented.
Bullish despite challenges
Chanos’ major gripe about DraftKings was the firm’s massive marketing spend, which he said currently tops 100% of revenue.
DraftKings revenue for the first half of 2021 reached almost $620m. During that period, the Wall Street Journal reported, DraftKings spent about two-thirds of that amount on sales and marketing. Not only is DraftKings in an all-out advertising war of attrition with its sportsbook rivals for market share — and losing ground on FanDuel and BetMGM — it’s also fighting several lawsuits, with two legal challenges arriving in one week.
Speaking after his recent comments on bettors, however, Robins maintained he was “very confident” in DraftKings’ strategy. He stated that there were things in the pipeline that he believes will create a lot of value.