DraftKings CEO says M&A hiatus not “the worst thing” after flurry of deals

DraftKings CEO Jason Robins has said it “wouldn’t be the worst thing in the world” to have a small break from M&A as the operator integrates its recently acquired assets.

Speaking at the Bank of America Gaming and Lodging Conference yesterday, September 5, Robins suggested that recent moves for Jackpocket, Sports IQ, and Simplebet mean the firm has its hands full and focus will be on bedding in the new businesses.

The Boston-based operator completed its $750m move for online lottery courier Jackpocket in May before following that up with an undisclosed deal for odds specialists Sports IQ that same month.

Last week, DraftKings also confirmed its intention to acquire micro-betting supplier Simplebet to bolster its in-play sports betting capabilities.

And while Robins has previously downplayed M&A chatter, most notably after sealing the Jackpocket deal, DraftKings then went on to snap up Sports IQ and Simplebet in quick succession.

Further divulging his line of thinking during the conference, Robins said the smaller deals for Sports IQ and Simplebet were more manageable in their size, plus both assets added a core functionality to an existing product in online sports betting.

The additional benefit of bringing both Sports IQ and Simplebet in-house is that DraftKings will take exclusivity over the companies’ respective tech as it phases out existing third-party deals with rivals.

Robins said: “M&A is not explicitly a focus of ours, it’s more what are the business things we need to address and what is the best way to do it. In some cases that might be M&A, some cases it wouldn’t.

“For example, take Simplebet and Sports IQ, those were deals where we said we absolutely can build this stuff but here’s how much it would cost us, here’s how long it would take, here are the other things we couldn’t do, and here’s the money we could save from any third-party fees.

“It takes work to integrate to get the deals done. We’re mindful of every time we do something like that, there’s a cost in that our people have to spend some of their time on how to integrate.

“There is some merit in saying if the perfect thing came along, we’d look at it for sure, but it wouldn’t be the worst thing in the world if we had a little break from M&A while we integrate and see if we’re getting the benefits,” he added.

While touching specifically on the expected benefits from Simplebet, of which DraftKings was already a customer and a minority shareholder, Robins noted that the operator’s live betting product was already the market leader.

He continued: “Purely on the basis of cost savings alone, this is a very attractive deal for us.

“The upside is we can really continue to enhance our live betting product to a point where we are ahead of the competition. I think we do have a best-in-class product [currently].

“We are starting from a position of being ahead as opposed to where we are trying to catch up on the same game parlay. There’s an opportunity to make it better, but also an opportunity this [NFL] season to lean in more to marketing it.”

Elsewhere, Simplebet co-founder Joey Levy, who went on to establish micro-betting operator Betr with YouTube star Jake Paul, said the sale of Simplebet had been baked into his plans for Betr.

Simplebet has served as one of Betr’s major supplier partners, with Levy confirming recent deals to acquire Chameleon and license Huddle’s tech mean it will be able to thrive once DraftKings acquires the business.