DraftKings CEO Jason Robins has moved to dismiss growing concerns that the company’s prediction market expansion is eating into its established sportsbook business.
Speaking on the operator’s Q2 earnings call, Robins argued the two products are serving entirely different customer groups rather than competing for the same audience.
He stated there was “minimal, if any, cannibalisation” occurring between DraftKings’ sportsbook and prediction market offerings, framing the situation as a clear incremental opportunity.
Robins noted that prediction market activity in states where online sports betting is already legal is being driven largely by institutional and professional traders who had no prior presence on DraftKings.
He was clear that existing sportsbook customers were not simply migrating across to prediction markets, pushing back firmly against the narrative that the two products are in conflict.
DraftKings’ prediction market strategy is also targeting states where legal online sports betting remains unavailable, with Robins specifically highlighting California and Texas as key markets showing promising customer profiles.
“We looked at a lot of internal data,” Robins said. “We also used some third-party data, and we have a number of different ways that we’ve triangulated various metrics to come to the same conclusion.”
Robins added that volume coming from legal sports betting states on prediction markets is sourced from “institutional, professional syndicates, and people that were not previously active on DraftKings.”
He described the prediction market push as an incremental opportunity, saying he does not believe it “will ever be cannibalistic” to the core sportsbook operation.
Beyond cannibalisation concerns, Robins pointed to broader momentum across the business, noting sportsbook handle continued to grow at double-digit rates in July even after the World Cup concluded.
He also revealed DraftKings acquired significantly more customers than expected in Q2, prompting the company to increase customer acquisition spending by around 10% to capitalise on the momentum.
Despite that additional investment, acquisition costs came in around 25% below expectations, reinforcing management’s confidence in the overall predictions strategy heading into the NFL season.
“I think what’s happening here is that both the World Cup impact, predictions and having everybody talking about this all the time is really just going to lift everything,” Robins said.
DraftKings reported a $67.6m net loss for Q2, driven in part by lower revenue and higher spending across the business during the quarter.
Despite the loss, the company elected not to cut its full-year guidance, signalling strong confidence in its strategic direction as the NFL season approaches in September.
