Sports betting company DraftKings is positioning itself for the National Football League season, aligning with Genius Sports in a multiyear agreement over data.
The deal provides DraftKings with exclusive sportsbook data around the NFL, as Genius Sports is the official rights holder of the information. Th companies said Wednesday that DraftKings will get access to Genius’ live video feeds from over 170,000 sporting events per year and fan retention services like marketing tech to lure customers. This software allows DraftKings to buy advertisement space at key moments of live sporting events; hence, lure customers.
Terms of the deal were not disclosed.
DraftKings Chief Business Officer Ezra Kucharz called the partnership “mutually beneficial,” adding in a statement that aligning with Genius will allow the company to “expand on the capabilities of our products and provide new and exciting features for our customers like single-game parlays.”
DraftKings reported $312 million in revenue in its first-quarter earnings report. The company also raised its fiscal year 2021 revenue guidance to a range of $1.05 billion to $1.15 billion from $900 million to $1 billion.
In April, DraftKings joined Caesars and FanDuel in an NFL sportsbook partnership. The agreement allows the sports betting firms to use NFL intellectual property and its trademarks for betting promotions. The companies will also operate in a content-sharing model with the NFL. For example, the betting sites will be allowed to leverage material such as NFL highlights and Next Gen Stats data, which will help set betting lines.
That’s why the companies need to do business with Genius.
The London-based data and tech firm also struck an NFL deal last April and is allowed to distribute real-time play-by-play stats and the league’s Next Gen Stats. That four-year cash and equity deal with options could be valued at $1 billion over the life of the contract if it’s extended.
Genius completed a $1.5 billion deal merger with special purpose acquisition company dMY Technology Group and is now traded on the New York Stock Exchange under the ticker symbol GENI with a market cap of $3 billion. In its first quarter earnings report last May, the company said it made $53.7 million, and raised revenue guidance from $190 million to up to $260 million. The stock was down 2% on Wednesday, closing at $15.86 per share.
According to the American Gaming Association, sports wagering is legal in 22 states and the District of Columbia, and DraftKings is positing itself to enter more markets, including New York. The state is inching closer to allowing mobile bets and estimates the market will bring in $482 million in tax revenue, according to The Wall Street Journal. New York plans to charge platforms a one-time $25 million licensing fee for access.
In addition to NFL data, DraftKings will obtain data around the National Basketball Association, Major League Baseball, and NASCAR. Genius also has international soccer partnerships with the English Premier League and Liga MX.
Shares of DraftKings closed at $48.67 on Wednesday.
Disclosure: CNBC parent Comcast and NBC Sports are investors in FanDuel.
Source: Business - cnbc.com
