DraftKings Sportsbook has announced it expects its surpass 2 million sports bets placed sometime this coming Sunday.
The extra competition didn’t seem to slow down DraftKings Sportsbook and it quickly racked up its first million bets. The lucky bettor who made the milestone wager on September 7 picked up an extra prize of $10,000 worth of free bets.
Bets become revenues even with new competition
There are now eight online and mobile sports betting options available in the New Jersey regulated market, but if anything it appears that DraftKings Sportsbook’s rapid growth has accelerated.
Bets turn into revenues and the New Jersey Division of Gaming Enforcement (DGE) reported that DraftKings Sportsbook generated more than $2.97 million in revenues and paid more than $386,000 in taxes in August.
Assuming DraftKings Sportsbook is maintaining the same margins and bet sizing, it is entirely possible that it will be reporting significantly more than that amount when the September figures are published.
Only 38 days to a million and then only 15 more days to 2 million is obviously a feather in the cap for DraftKings Sportsbook, but it also says something about the way that sports betting has taken off in New Jersey.
Football season is a big sports betting revenue driver
NFL season kicked off September 6, so DraftKings August figures weren’t affected by the boost from pro football betting.
But it might be significant that only three days later, DraftKings Sportsbook hit its first million bets. The shorter time frame to 2 million might be partly due to organic growth as sports betting becomes more available in New Jersey, but a large part of that growth probably came from football.
The American Gaming Association (AGA) recently put out a study which forecast that the NFL itself could benefit by as much as $2.3 billion in additional revenue as the result of legal sports betting.
Sara Slane, senior vice president of public affairs for the AGA, stated:
“Legal, regulated sports betting will create huge new revenue opportunities for sports leagues — and the NFL could be the biggest winner of all. Once legal sports betting expands across the country, the NFL could take in more than $2 billion a year, reinforcing how much sports leagues stand to gain from increased viewership and private partnerships with sports betting operators.”
A separate AGA-funded research report from Nielsen Research reported that the current proportion of NFL fans engaging in sports betting will increase by 60 percent now that the activity is legal and regulated.
That impact might already be starting to show up in New Jersey numbers, and DraftKings Sportsbook can thank the NFL for much of its rapid early growth.
Over in Pennsylvania, casinos have missed out on the start of the football season and its associated revenues. Sports betting applications only started arriving at the state late this summer because of the hefty $10 million licensing fee and effective 36 percent tax. They should be up and running by late this year.
What’s the big deal about 2 million?
Two million bets is a lot: a lot of money being wagered, and a lot of revenue for state taxes and DraftKings.
DraftKings’ achievement can be put in context by a quick look at esports betting growth. Esports are generally seen as being the fastest-growing area in online gaming at the moment, and are the darling of venture capital investors looking for the new thing.
Global online gaming company Pinnacle, which left the US market in 2007 after UIGEA passed, took its first esports bet in January 2010.
It took Pinnacle more than three years to reach its 500,000th bet in May 2013. It finally reached the two million mark in November 2015.
And that is rightly seen as a stellar growth rate, proudly displayed on Pinnacle’s website.