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DraftKings has unveiled plans for a new offering that rivals some products offered by competing daily fantasy companies as pick’em-style contests.
The company announced plans to begin offering a “progressive parlay” sportsbook product, which allows players to select multiple over/under legs of a parlay with different prizes based on how many of the legs are successful.
Most sportsbooks have only offered all-or-nothing parlays, with some offering occasional promotions that return bonus credits if all but one leg of the parlay hits or other similar offers.
The product, however, is similar to that offered by several pick’em-style daily fantasy operators, including the “Flex” option offered by PrizePicks on its contests and the insurance option offered by Underdog.
The fierce lobbying battle between leading sportsbook operators and the pick’em daily fantasy operators has been well documented in recent months, and the new DraftKings product is the latest shot to be fired.
In a slide deck for its investor day presentation on Wednesday (November 14), the company was quick to point out that the new product would be “regulated as sports betting.”
“As far as we're aware, no sportsbook operators, certainly no major sportsbook operators in the U.S., offer progressive parlay, and there's really no product that has as robust an offering out there like it,” DraftKings CEO Jason Robins said.
Parlays have become a key revenue driver for major sportsbook operators, including DraftKings and FanDuel, with same-game parlay offerings proving to be popular with customers, as well as highly lucrative for operators given a significantly higher hold rate on parlays compared with straight wagers.
“It's a win-win, customers we expect to absolutely love it and find it to be another great enhancement to the DraftKings offering,” Robins said. “We also expect it to be a very high hold product, it'll be really strong gross margin and those are the types of things we’re focused on.
“Obviously, we have to make sure that it's a great product, that the customer likes it,” he continued. “But also, you know, there's so many of those products that can also be great financial drivers for DraftKings and progressive parlay really hits in on both.”
A launch date has yet to be announced for the new progressive parlay offering, but the announcement also comes as new high-profile competition comes in the form of ESPN BET, the Penn Entertainment venture which launched in 17 states on Tuesday.
“Obviously, competition is good for the consumer, it creates a better environment, it forces innovation and forces competition,” Robins said of ESPN BET and the U.S. landscape more generally.
“I think that's really a positive thing, especially at this stage of the industry to see new competitors coming in, because it'll just push everyone to do better.
“We respect all of our competition, we think that our competition is going to bring it and at the same time, we feel very confident that we have the right people and the right makeup to do what we do well, and to really beat anybody out there.
“And in the end, I think the customer is going to gravitate to the best product and the best overall experience,” he added.
