Welcome back to Radio Row. It's the week before the Super Bowl. Front Office Sports with you now. I'm Dan Roberts and I've got DraftKings CEO Jason Robins. Jason, what's up?
Hey, good to see you, Dan.
We've known each other a long time. Good to have you back.
A long time. Great to see you.
You've made a lot of news over the years and right now as we talk, you guys just made some more news. You've launched Crypto.com's prediction market engine on DraftKings Predictions. You've just added that. Talk about what that means because so much going on with prediction markets right now.
Well, we're really excited to be partnering with Crypto.com and adding it. It basically expands our content offering significantly, fortunately right before the most important weekend of the year for us in terms of engagement with customers. So, having a much more complete offering where there's many more things that customers can trade and adding that to the already offering that we have from CME, I think puts our product in a much better place. And we're still early. I mean, it's a new product. We're going to improve this thing dramatically over the coming months and years, but I think this is a huge step forward and happy to get it in time for Super Bowl and happy to be partnering with Crypto.com.
It's almost confusing to track the landscape with prediction markets. Now, you guys are in this business, your competitors are in this business. Fanatics, we talked to Fanatics Betting CEO Matt King about this the other day. You know, he used to be at FanDuel. They're in prediction markets. Plus, there's the pure play options, Kalshi, Polymarket. What do you think it is right now about the momentum here and why everyone is getting into this? And as you said, it's still new and new, but it's dramatically accelerating.
Well, I think that there's a real opportunity here and that's what you're seeing. We'll see how big it ultimately can be. I've seen estimates though that this can be an opportunity worth billions of dollars of revenue. And I think if you can capture a significant chunk of that, if you're us, that's huge incremental EBITDA and revenue upside for us. So, that's what we're focused on doing. And I know just like any competitive market others are going after it too as you mentioned several names. But you know, we like our chances. We think there will obviously be multiple winners but in the past we've really done well when it comes to advancing our product quickly and staying ahead of the competition that way. So that's going to be the centerpiece here. We're going to try to have the best product in the market and then from there hopefully we'll continue to do well.
I think with new products like this, there's often a do we build it or do we buy it question and one that I have is why someone like DraftKings doesn't try to buy someone like Kalshi or Polymarket.
You know, there's always considerations like that, but I think that those companies are raising money at huge valuations and it would be tough to do a transaction at this point. Meanwhile, our stock's getting killed. So, you know, which I don't think is necessarily fair, but such is life. We have to prove it, which we will do. But you know, I think this is also a product that's so new, particularly the sports side of it. It's really only a year and change old. So, it's not like we have to, it's not like the same thing when we were in sports betting where we felt like we had to buy a platform because we were competing with businesses that have been investing for decades into their platform. Here, it's still all so new. And we have so much of the core infrastructure too already between pricing models, you know, trading, all the different things that you would need to do a sportsbook. Many of them are very easily repurposable for the prediction markets on the sports side. So I think because of those two factors, we feel like in a very short period of time we can have the best product in the market.
It's really interesting that you draw that distinction of it's not like with sports betting where we felt like we got to move fast because we're competing with existing giants that weren't in mobile. Some of them have gotten into mobile and online sports betting, some of those brick-and-mortar casino companies. But when you look at prediction markets, I mean, could they end up being a forcing mechanism to drive legal change state by state or even to bring some of those pre-existing betting giants into the now?
Absolutely. I mean, I think that there's something that states are really going to have to take a hard look at this and say we are now basically seeing a federally regulated product that we are not generating tax revenue off of. And we've said pretty consistently that we are happy in any state that we do predictions to switch like here in California. If we were to be able to get the tribes on board with a framework that worked for us, then that would hopefully happen and then we wouldn't need to do predictions here. It's not something that we prefer to do over sports betting. But in absence of that, I think it's a big opportunity because there's a lot of Californians and a lot of people all over these various states in the country that don't have access to legal sports betting that would enjoy playing the predictions product. And even by the way, people in sports betting states will, I just think it'll be a little bit less of a big deal because a lot of that consumer demand is already being met by the legal sports betting market.
What do you think the leagues are going to end up doing when it comes to prediction markets? I've covered this closely because I think it's fascinating. The NHL and Major League Soccer have now made official league level marketing deals with either Kalshi or Polymarket. The NFL, NBA, and Major League Baseball have for now stayed away and been very cautious. Is all of this inevitable that they will make partnerships with prediction markets?
I don't want to speak for them on that. I think rightly so. They're very focused on making sure that the right protections are in place to ensure that we're monitoring integrity of the game type of things and doing things the right way. I'm sure there's certain types of event contracts that they would rather not see. So I think all that has to get worked out. I know the recent comments from Mike Celig at the CFTC basically addressed that and said we need to work with the leagues and other stakeholders to create rules of the road, create guidelines for this industry. So I'm excited to see that develop. I think that's how we really make sure that everyone like these leagues that are obviously key stakeholders in making sure that their core product is protected, making sure that they feel comfortable with what everybody is doing. And the good thing is for us, we've had long-standing relationships there and they're very familiar with the things that we're doing and we're applying a lot of those same things in the prediction space, but I think they would like to see that everyone in the industry is doing something similar.
