DraftKings has hired a new director of trading for the US as the company builds out its capabilities ahead of its looming platform shift.
Stephen Baumhol starts with DraftKings today, based initially in a former SBTech office in Bank, London. He is expected to relocate to DraftKings’ trading office in Las Vegas next year.
One source with knowledge of the situation said Baumohl would receive a budget to build out trading teams and systems.
Platform shift ahead for DraftKings
Baumohl joins DraftKings from UK bookmaker Redzone, which is known for its focus on US sports and proprietary pricing. The operator is also well regarded for its range of NFL betting markets and high betting limits, led by Baumohl.
As part of the move, Baumohl sold his ownership stake in Redzone. However, the company will continue to get his prices via its existing contract with SBTech.
In a post on LinkedIn, Baumohl said he had “contributed as much as he could” in the UK market.
“After 25 years of running American sports betting everywhere but the USA, now is the right time to turn my focus to where it belongs,” Baumohl said. “Thank you, DraftKings for the opportunity.”
The benefits of proprietary pricing
The hire comes as DraftKings prepares to move off its current Kambi technology and onto SBTech by September 2021. Following that migration, DraftKings will have full control over pricing and trading.
And according to Canaccord Genuity analyst Michael Graham, that proprietary control is a major reason why DraftKings can outgrow its competition.
“As live betting rolls out in the US over the next couple years, DraftKings’ traders should be able to set increasingly efficient odds for an increasing number of bets,” Graham said in a recent note. “That results in rising ARPMUP (revenue per player).”
Migration to SBTech is looming
DraftKings last week announced a mutual agreement with Kambi about that upcoming migration phase.
The current deal will expire “no earlier than September 30, 2021.” However, DraftKings can use its proprietary technology prior to that date – when entering a new state for instance.
The process of migrating to a new sports betting platform is likely not a painless one for DraftKings. That is a primary reason the company chose to move slowly in its switch to SBTech.
Previous platforms migrations in other sports betting companies have produced innovation delays and technical issues that DraftKings can ill afford in the bustling US market.