It’s a tough time for sports in just about every way during the COVID-19 pandemic.
Whether it is people involved directly with the sport, fans missing watching their favorite teams or companies that revolve around creating sports content, there’s just not a whole lot going on right now.
DraftKings, however, made a surprising move on Friday when it announced it was debuting as a publicly traded company.
You can now find the Boston-based company – made famous from its daily fantasy sports offerings – on the Nasdaq stock market as “DKNG.”
According to Bostonomix’s Callum Borchers, investors must be impressed with DraftKings’ ingenuity or are optimistic about the long-term prospects because the companies’ stock value drove up 10 percent on the first day of trading.
Off the beaten path
This comes at a time when DraftKings is having to get very creative to entice players to still enter daily fantasy contests. Many of its daily offerings are revolved around eSports, namely Call of Duty, League of Legends and CS:GO. They also have contests for sports simulations that are being broadcasted on Twitch through Madden and NBA 2K.
In terms of real sports, they’ve backed the Outlaw Tour – a mini tour in Arizona that has begun to draw professional golfers like Alex Cejka, Dylan Wu and Calum Hill – and Korea’s professional baseball league.
DraftKings is also going way outside of the box. It runs “Tiger King” popularity pools, which offer prizes for guessing quotes and viewers’ favorite characters.
“Thank God for that,” DraftKings Chief Executive Jason Robins told Borchers.
DraftKings Sportsbook entering new states
What is truly driving the DraftKings’ surge is its fairly new sportsbook. It is currently offered in six states – including New Hampshire and in Colorado starting this Friday – but many more states will likely be on the way. According to Borchers, Robins believes there will be a business opportunity for DraftKings in many states in the coming months and years.
“There will be some budget holes that didn’t exist before that states will need to fill,” Robins said. “I do think it’s possible that [sports betting] is one of the things that they will consider. And it’s possible that some of the states that were maybe on the fence about this before, because they have a greater need now for tax revenue, it might get them over the fence.”
While many sports-focused companies have had to lay off or furlough staff during the pandemic, DraftKings is actually still hiring. According to Borchers, DraftKings reached the stock market more easily than most companies by making a special purpose acquisition. Instead of making an initial public offering, DraftKings merged with Diamond Eagle Acquisition Corp., which was already on the Nasdaq exchange. Once the deal was closed, the company began operating under the DraftKings name and changed the ticker symbol from DEAC to DKNG.
“I think if we had been considering a traditional IPO, it’s possible we would have decided that now wasn’t the right time,” Robins said.
New Hampshire a healthy partner for DraftKings
The state of New Hampshire has been a boost for the DK Sportsbook. While most other states have multiple sportsbooks to choose from online, DraftKings is the only legal online sportsbook in New Hampshire. In a deal that gave DraftKings an effective monopoly in the state for the indefinite future, the sportsbook will pay around half of its revenue back to New Hampshire.
And New Hampshire citizens have delivered. According to Gov. Chris Sununu’s Twitter, bettors made over $15.8 million in wagers in just the first two weeks after DraftKings was made available on Dec. 30. Twenty-seven thousand new users placed 750,000 separate wagers in that time period.
Bettors have calmed down for now, but the sportsbook is still offering plenty of futures bets across all major sports leagues for when sports finally return.