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DraftKings CEO Jason Robins told CNBC’s Jim Cramer that prediction markets aren’t driving customers out of sports betting, stressing that the two have different offerings.
“Simply going and spending five minutes looking at the products, you’ll see what I mean — it’s night and day,” Robins said. “The amount of markets, even the pricing, isn’t something that I would view as competitive with what we do.”
Robins pointed to U.K. and Western European markets, where there is both exchange based betting and traditional sports betting. In those areas, he said “exchange products are typically low to mid single digit percentages of share of the total industry,” suggesting that indicates there is little volume migration from the sports books.
But DraftKings is making its own foray into prediction markets. It acquired prediction platform RailBird last month and announced it would launch a mobile application that allows users to bet on outcomes in a variety of sectors, including finance and entertainment.
Robins told Cramer that prediction markets present an opportunity for DraftKings, especially in places like California and Texas where traditional online sports betting is illegal. However, he added that his company is going to continue to focus on sports books in states where the practice is legal.
“I think the reality is that at least for the near term, it looks like the momentum is here,” Robins said of prediction markets. “They’re here to stay. And so, I think with that in mind, we need to participate, and we should have the tools to win.”
The company reported earnings Thursday after close and lowered its full-year sales outlook, sending shares down more than 5% in extended trading.
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