draft kings CEO Jason Robbins told CNBC’s Jim Cramer that prediction markets aren’t driving customers away from sports betting, emphasizing that the two offer different offerings.
“If you go in and look at the product for five minutes, you’ll see what I mean. It’s night and day,” Robbins said. “I don’t think the market can match our business in terms of size or even pricing.”
Robbins pointed to markets in the UK and Western Europe where both exchange-based betting and traditional sports betting exist. In these areas, “exchange products typically account for a low to mid-single digit share of the overall industry share,” he said, suggesting there is little volume migration from sportsbooks.
But DraftKings is making its own foray into prediction markets. Last month, the company announced it would acquire prediction platform RailBird and launch a mobile application that allows users to bet on outcomes in a variety of fields, including finance and entertainment.
Robbins told Kramer that prediction markets present an opportunity for DraftKings, especially in places like California and Texas where traditional online sports betting is illegal. But he added that his company will continue to focus on sportsbooks in states where they are legal.
“I think the reality is, at least in the short term, it looks like there’s momentum,” Robbins said of prediction markets. “They’re here to stay. So with that in mind, I think we should come in and have the tools to win.”
Shares fell more than 5% in extended trading as the company released results after the close on Thursday and lowered its full-year sales outlook.
