While Coronavirus and the ensuing shut-ins were very good for DraftKings by virtually every metric, CEO Jason Robins says the fun is just beginning. He told the Boston Globe that the pandemic has ratified his business model, which presumed the widespread acceptance of i-gaming. The stock market has also been good to DKNG, which is riding a market capitalization of $24 billion. It’s a reward for those who bought into Robins’ strategy, which was predicated on patience, prioritizing expansion over profits. Indeed, DraftKings lost $855 million last year and could be a billion in the red this year. However, DraftKings has secured a monopoly in two states (New Hampshire and Oregon) and appears juiced into a duopoly in another (New York State). Although daily fantasy sports, DraftKings’ early signature business, has taken a back seat to real-life sports betting, the DFS experience built valuable brand equity. PlayUSA analyst Dustin Gouker calls the DraftKings and FanDuel customer wellsprings “better than a regular casino’s database.”
It didn’t hurt that DraftKings was well-suited for its employees to work offsite as Covid-19 surged. “We adjusted faster than I would have thought to the working environment talking to each other over computer screens, and I think we’ll adjust to whatever comes next,” Robins told the Globe. However, he has to catch FanDuel in the OSB sphere. FanDuel posted $645 million over the last three years compared to DraftKings’ $501 million. And Robins isn’t laughing off new-is competition from Big Gaming. However, DraftKings may have to temper its brash advertising approach. “There’s always got to be a tieback to responsible gaming, and not an oversaturation of advertising and marketing and being in too many people’s faces,” industry consultant Sara Slane told the paper. Ironically, DraftKings remains a prophet (if not profit) without honor in its home state. Sports betting is still illegal in Massachusetts and the Lege is getting nowhere fast on the issue.
Our Atlantic City correspondent has been busy, visiting four casinos in three days. He started at Borgata and reports, “It was like a (pre-Covid) summer weekend, with 50% of the slot machines blocked off, it was difficult to find an open machine. Had to get in the Player Club lounge line earlier than we would like, but the food was good. When we left the lounge @5:00, the line was extremely long as we expected. On Saturday, we first went to Philadelphia Live, and found the metal detectors are back at both entrances, perhaps there’s ‘trouble in Philly Live paradise,’ otherwise they wouldn’t need them. It was not that busy. There were more cars parked across the street at a local fairgrounds event.
“Later Saturday we went to Harrah’s Philadelphia @ Chester. It wasn’t that busy until after we had dinner @ Philly Tap (former Guy Fieri’s) Nice large portion of salmon, we’re using up our Caesars comps. As we were leaving, it was busy. Sunday, we went to Atlantic City’s Ocean Casino for [the missus’] Ocean Casino gift bag. It wasn’t too busy, but she got quite a surprise when a 1-cent Buffalo Gold slot machine filled her bag with a hand pay. As some people watched nearby, we didn’t want to go directly to the exit, went to their Player’s Lounge area upstairs instead. Ocean/Revel interior design is strange in so many ways. The Ocean Player’s Lounge area is now located in a hallway outside the closed entertainment venue. The hallway is 25-30 feet wide as there is so much excess spaces inside Ocean/Revel. The menu was limited to three entrees; the steak was large enough for leftovers. Great day in AC, with gift, $ and food, got home safe.” Sounds like a recipe for a good weekend—except for the Philadelphia Live part.
Sports-betting handle in Indiana hit $317 million last month, due largely to the “once in a lifetime” all-in-Indiana session of March Madness. Revenue for the books was $26.5 million. “It’s hard to know just how much [location] moved the needle, but March’s results were clearly fueled by a huge volume of NCAA Tournament games all in one place and by a number of fans who traveled to Indiana and then bet legally as they attended games. We may never see a betting event quite like that ever again,” said PlayUSA analyst Jessica Welman. “For a basketball-crazy state like Indiana, a dearth of local teams could have really lowered the state’s handle,” she added. “But it appears that the proximity of the tournament made up for a lack of Indiana representation.”
Thanks in part to an emaciated sporting calendar a year ago, handle was up 323% from $75 million, while revenue leapt from $5.5 million. DraftKings/Ameristar East Chicago led market share with 40% and $111 million in handle, along with $8.5 million in revenue. FanDuel/Blue Chip was next with $92.5 million of handle and $7 million revenue. BetMGM/Belterra‘s $39.5 million handle plus $3.5 million revenue also put it well in the picture, along with PointsBet/Hollywood Lawrenceburg with $13 million and $2 million respectively. Barstool Sports was largely a walk-up-only nonfactor, since it doesn’t go online until this month. No one else cracked the million-dollar mark in revenue, and handle fell precipitously at Horseshoe Hammond, which scratched out an embarrassing $1,392 in win. Walk-up betting leaders were Hollywood Lawrenceburg ($11 million) and Ameristar East Chicago ($6 million). The Hoosier state may continue to benefit from Illinois betting refugees, now that the in-person-registration requirement is back in effect. The Lege really ought to repeal that.
We hate to suggest that casino revenues are an afterthought, not least when they represent $202.5 million. Indiana, however, bucked the emerging national recovery trend by being 4% off the March 2019 pace. An exception to this was Caesars Entertainment‘s brace of racinos. Indiana Grand grossed $28 million (up 6%) and Harrah’s Hoosier Downs galloped to $20 million (plus 10%). Horseless casinos generally fared less well. Hollywood Lawrenceburg’s $15 million was a 7.5% and Belterra Resort’s $9 million represented an 18% decline. Tropicana Evansville slid 14% to $13 million while Caesars Southern Indiana was down 5% to $19 million. Horseshoe Hammond ceded 6% to a state-leading $36 million but Ameristar East Chicago gained 10% to $25 million. Blue Chip slid 15% to $13 million, while Majestic Star I was down 2% to $8.5 million and Majestic Star II tumbled 32.% to $4 million. That leaves French Lick Resort, ceding 17% to $7.5 million.
Early reviews of Elon Musk‘s Las Vegas Convention Center people-mover are in … and they’re not good. “It’s just some Tesla Model 3s driving slowly in a tube,” groused one critic. “It’s about as exciting as a sheet of unpainted drywall discarded in a closed office park.” Said another, “The tunneling remains the most impressive thing about the project, with both tunnels completely excavated this past May. However, the rest of the process seems to boil down to a ride in a Model 3.” Still another complained, “Vegas actually let Elon Musk make a less efficient subway system. One of the reasons for the disappointment is that the planned 155 mph ride actually trundles along at 35 mph. As Musk himself says, it’s been “simplified.” (No telling how this bodes for his plan to unify the Las Vegas Strip and Downtown.) Still, it beats a 25-minute walk for the tired conventioneer.
Jottings: Faced with an MGM Resorts International fait accompli in Osaka, the local government reopened the application process to new bidders. Nobody came … Another epic fail for Alabama: A bill to found a state lottery expired in the Lege … More green shoots on the Strip—MGM is hiring additional guest-room attendants (pointing to rising bookings), providing in-room Covid testing and vaccinating third-party employees and entertainers, the latter a hopeful step towards more show resumptions.
