DraftKings was one of the first sportbet platforms to offer online sportsbet action following the Supreme Court 2018 decision that opened the path to states to legalize sportsbetting. The company has managed to push ahead, even in the face of the pandemic, by optimizing its online platforms to bring sports betting right to fans’ PC or mobile device.
Now DraftKings has embarked on two new partnerships that seem to promise that the operator will continue to move ahead.
In mid-August the company announced that it would be going public after merging with Harry Sloan’s Diamond Eagle. And at the end of the month, it was announced that basketball legend Michael Jordan will be investing in the company and serving as a special adviser to the board.
Both deals helped the DraftKing stocks move higher and signaled that the company is in a good financial situation.
According to a DraftKings statement, the company’s deal with Jordan includes presenting him with an equity stake for his services in "providing guidance and strategic advice" as well as inclusion initiatives, strategy and product development
DraftKings is a gaming and digital sports entertainment company that was originally created provide a platform where sports fans could indulge in fantasy sports. Participants build fantasy teams for various sports using players from real teams. Then they watch the progress (and sometimes bet on their predictions) of the fantasy team based on the real-life performance of the players that they’ve put on their teams.
DraftKings is a U.S.-based vertically integrated sports betting operator which provides gaming technologies and sports betting via multi-channel platforms. The company powers sports and gaming entertainment for dozens of operators who are located in states and other locales where sports betting is legal.
The company also powers a Sportsbook that provides retail and mobile betting for a wide range of sports events in states where sports betting is legal which include Colorado, Illinois, Indiana, Iowa, Mississippi, New Hampshire, New Jersey, New York, Pennsylvania and West Virginia. DraftKings services are also accessible in 8 countries.
DraftKings is the official daily fantasy partner of the MLB, NFL and the PGA TOUR. It operates authorized fantasy games for the NBA and the MLB and is the official betting operator of the PGA TOUR.
Michael Jordan is probably one of the most famous NBA players of the 20th century. He won six championships and six Most Valuable Player awards during his career. Since his retirement he’s been a successful pitchman for products including Hanes, Nike, Gatorade and others. Jordan’s playing career ended in 1998 but over the last 20 years he has earned tens of billions from his endorsements.
Jordan has a penchant for gambling so his involvement with DraftKings is an appropriate partnership.
The announcement of Jordan’s partnership with Drftkings led to a 8% surge in the DraftKings stock on Wall Street. Jordan himself will receive DraftKings stock in exchange for providing the company “guidance and strategic advice.” Jordan is also a majority owner of Charlotte Hornets of the NBA. The deal has the NBA’s approval.
An NBA spokesman said, “NBA team investors, including governors, are permitted to have involvement with sports betting and fantasy sports businesses, subject to safeguards required under league rules to prevent actual or perceived conflicts of interest.”
In its statement, DraftKings said that Jordan would “provide strategic and creative input to the board of directors on company strategy, product development, inclusion, equity and belonging, marketing activities and other key initiatives.”
The deal with Jordan follows DraftKing’s move to become a public company. DraftKings merged with SBTech and Diamond Eagle Acquisition after it received approval for the merger from the Securities and Exchange Commission.
The merger, valued at $2.7 billion, began to take place in April and was finalized a few weeks ago. Together the new group will create what they describe as the only vertically integrated U.S. online gaming and sports betting company. DraftKings is now a publically traded company (DKNG) and can anticipate more than $500 million of unrestricted cash to access the capital that it needs to fuel its growth.
DraftKings was on a roll before the pandemic hit. When live sports events were halted, the company’s sports betting division suffered a $68.9 million loss in the first quarter of 2020. DraftKings said, however, that it did not anticipate that the shutdown would affect the company in the long-term and it has been focused on restarting its sports betting division and incorporating esports betting into its sportsbook.