DraftKings Gets Approval for Launch in Maryland
Having recently passed the online sports betting bill in the state, Maryland is now reviewing applications from operators that are keen to open their sites to customers.
DraftKings is the latest to have been approved, having agreed an initial 10-year partnership with the Timonium Racetrack to open a retail sportsbook, with a view to then launching online when this opens up, which is predicted to be 2023.
This could prove to be an effective stepping stone for DraftKings, with the idea being that it will then be well-placed to hit the ground running when Maryland does eventually provide information on an exact date for online gambling.
Effective Marketing Channel for DraftKings
Entering the state early in this way could help from a number of perspectives. Getting customers acquainted with the type of service that the brand offers in person will be a great way to then acquire them digitally once the website is available.
Forging that relationship will be seen as key for the brand as it looks to make ground up on its competitors in the wider US online gambling industry.
Currently, the brand is somewhat behind in terms of performance, compared to its closest competitors; FanDuel and BetMGM having witnessed a considerable decline in stock.
It has since been focused on restoring investor confidence in the market and has essentially gone back to basics, ensuring a quality product and effective customer service.
If it can demonstrate this to potentially a considerable new customer base in Maryland, this can help to increase its reputation over the next few months.
Although DraftKings’ operating performance is an area of concern and the prospect of improvement in the near future is limited, there are no overwhelming issues that would lead us to conclude that the company is unsuitable for licensure.
Meanwhile, DraftKings’ Vice President of Investor Relations, Joseph DeCristofaro, was positive about the outlook and how this initial license could positively affect the brand: “There is an upfront cost, and then you earn a return on that over a period of time,” he said.
“When you have more existing players than new players, you turn profitable. That’s the business model and why we’re optimistic about it.”
Fourth Quarter to Kickstart DraftKings Performance?
A positive outlook will certainly be on the agenda for the company in the closing months of this year, as it looks to slowly keep improving.
It will be closely monitoring the situation in California as well, with the state committee to vote on whether to regulate in the industry in November, while the upcoming sports seasons can also play a big part in how the brand performs over the next few months.
Maryland presents an interesting challenge for the brand, though it will also be interesting how much competition it will face from the likes of FanDuel, if that decides to follow suit with retail outlets of its own.