The secret sauce of the unified “Super App” that DraftKings announced in March isn’t that it allows users to toggle between its sportsbook, casino, predictions and lottery offerings — though it does that. There certainly are cross-sell benefits in a handful of states as a result.
No, the magic of combining them into one app is that it will allow DraftKings to use a single, unified ad campaign to introduce prediction markets that look identical to sports bets in states that haven’t legalized online sportsbooks, and do it while continuing to reach bettors in legal states with the same 30-second spot.
On your couch in Chicago thinking about taking the Bears laying 2½ points?
Fire up the DraftKings app.
Out for breakfast in L.A. and feeling good about the Rams getting 1½?
Fire up the DraftKings app.
Picture LeBron James and Kevin Hart in a buddy movie-styled ad campaign, romping from L.A. to New York, Dallas and Miami and finding that the DraftKings app now works wherever they go.
Just click the green icon.
In Illinois, New York and the other 25 legalized states in which DK operates, you’ll land on the sportsbook side of the app’s backend, placing a traditional wager.
In California, Texas, Florida and the other 14 states previously off limits to DraftKings and other sportsbooks, you’ll be on the predictions side, buying an event contract.
In the event that the NFL hasn’t cleared the networks to accept prediction app advertising during games by the start of the season, it won’t be a problem for DraftKings. It’s not promoting the still murky product; just its home. And that $100 million plus per year that DK committed to spend with ESPN to reach half the country?
It’s now hard at work, from sea to shining sea.
“A huge part of having these national partnerships is being able to have a national, singular sort of offering and message that we put out there,” DraftKings CEO Jason Robins told analysts on the company’s first quarter earnings call last week. “And that’s been a core effort that we’ve been really focused on as we’ve thought about what our back half of the year and also [our] remaining Q2 plans are for the Super App.
“It’s really less about advertising predictions and more about advertising a unified DraftKings platform that’s accessible in almost every state in the country.”
So artful is this approach that archrival FanDuel quickly followed suit, telling investors and analysts last week that it intends to pivot away from the free-standing FanDuel Predicts app that it soft-launched late in December, with hopes of integrating predictions into its primary app in time for football.
“Critically, this now allows us to leverage FanDuel’s strong nationwide brand awareness by giving customers one app that delivers access to an increasingly compelling sports experience,” Flutter CEO Peter Jackson said in opening remarks during the FanDuel parent company’s earnings call last week.
Rolling predictions onto the familiar flagship app cut DraftKings’ customer acquisition costs for the new offering by more than 80% in April, Robins said. As a result, an initially slow growth curve has rocketed upward, with prediction volume per customer exceeding sportsbook handle per customer, Robins said. Volume does not equate to handle. But industry insiders say a 50% discount often will get you close, with the caveat that volume on events such as golf that play out across four days with frequent leaderboard changes can equate to as little as 10% or 20% of traditional handle.
Robins and Jackson hailed the potential to for their companies to make money as “market makers,” providing liquidity on contracts and taking advantage of pricing inefficiencies when their predictive models identify them.
“We’re probably one of the few people who’s making any money in our prediction markets at the moment,” Jackson told analysts.
