Sportsbooks want to offer bets, but on what?
On the eve of what would have been the first full day of March Madness last week, with 16 games crammed into 12 frenzied hours, DraftKings CEO Jason Robins ran down a few of the newly listed offerings for visitors to his company’s sportsbook and daily fantasy sites.
There were $1,000 prize pools built around Thursday night airings of “Jeopardy” and “Top Chef,” challenging players to predict outcomes such as whether the highest Final Jeopardy wager would be over or under $10,000, and whether Top Chef judge Padma Lakshmi would say “Hands up, utensils down” at any point during the show. A night later, DraftKings had a $10,000 pool running around “Shark Tank.”
All of the leading U.S. sportsbooks have expanded their wagering menus to include whatever sporting events, and beyond, they can find — including soccer not only from Argentina and Brazil, but also Belarus and Kosovo. But only a small subset of bettors are taking them up on it. On the daily fantasy side, the options fell from slim to none.
“The rest of us who want to bet on sports or play fantasy are all staying home and have the TV but no sports,” said Robins, answering questions while sequestered in a quiet room in his suburban Boston home, where he now works and lives with three children, all under 6. “So we’re trying to figure out what people are going to be interested in watching instead, and how we create games and different opportunities around that. We’re getting pretty good participation, which either shows that people are really bored or we’re doing something right. Or maybe some combination of the two.”
While sportsbooks can build contests with prizes around TV shows and election primaries, they can’t offer actual sportsbook-styled wagering. All bets offered have to be cleared by regulators in individual states, who thus far have been willing in some cases to expand beyond traditional game-based bets to, for example, predictions around the NFL and NBA drafts, but not on more easily manipulated events, like what happens on a TV show.
Sportsbooks that wanted to create bets around some of the virtual replacements that the leagues offer — such as the NBA 2K League or NASCAR’s iRacing series — would have to apply for approval of those by regulators in each state.
While creating real-money betting opportunities can take a long time, free-to-play contests like a “Jeopardy” or “Shark Tank” predictions game can be rolled out quickly in most states. Though they won’t bring in revenue, they will maintain engagement with those who choose to play.
DraftKings management began contemplating the impact of an evaporated sports schedule even before the leagues canceled games and the NCAA canceled its tournaments, Robins said. During the week that sports stopped, they quickly formed a 25-person task force to work on content to engage bettors and players while traditional sports are dormant.
The loss of March Madness can’t be overstated. Last year, the 48 games played during the first two rounds of the tournament not only generated a larger handle than did the Super Bowl in New Jersey and Nevada, it eclipsed the handle from the NBA for the entire month. In New Jersey, NCAA tournament betting totaled $106 million, almost double the $54 million wagered in that state on the most recent Super Bowl.
At DraftKings Sportsbook, 80% of account holders placed a bet during March Madness. That dynamic made the NCAA Tournament a pivotal event for sportsbooks, as both a way to acquire new accounts and engage its existing customer base.
That revenue and those opportunities are gone, never to be replaced. But Robins said he remains hopeful that when the next ones arise, his company will be well positioned to capitalize on them.
“Once we knew we were financially stable and we knew our employees were safe and we had people working on things that were going to immediately satisfy the customers’ needs today, we said how do we focus on building some things that are going to advance the ball long term and hopefully make this an even better company when all this dust clears,” Robins said.