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FanDuel CEO says ‘fiscal pressures’ from the pandemic could force more states to legalize sports betting

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FanDuel CEO Matt King joked with MarketWatch that the Super Bowl should fall into the “essential travel” recommendations from the CDC.

King, the head of the New York-based bookmaker and daily fantasy sports site since 2017, is an annual attendee of the big game, but this year decided it “didn’t make sense” to go. Like millions of other NFL fans, King will be watching the Chiefs take on the Bucs on TV.

In an interview with MarketWatch, King weighed in on how the pandemic is accelerating sports betting, FanDuel’s interest in becoming a public company, and if legal sports betting in New York state is a “game-changer.”

MarketWatch: Is FanDuel doing any physical events for the Super Bowl this year?

King: It’s pretty limited this year. Last year we did a bunch of events with players and some events with a few of our partners that are down there. A series of smaller things.

MarketWatch: Do you anticipate more money being wagered on the Super Bowl this year than in past years?

King: Yeah there’s going to be a lot more. Obviously we are in a lot more states, that’s the tailwind, but even the states that we’ve been operating in the last two years are up significantly this year.

See also: Here’s everything you need to know about betting on the Super Bowl legally

MarketWatch: What are your total bet projections for the game?

King: Our business is up dramatically. I’m not sure we are disclosing our specific projections but it’ll be by far the biggest game on record for us. Many orders of magnitude up year-over-year. The statistic I can give you because it’s on the tip of my tongue is that in the first 28 days of 2021, we’ve done $1 billion in handle on the sportsbook. We didn’t hit $1 billion in handle in 2020 until Q4.

MarketWatch: Any particular growth areas in your business that you’re seeing? Something like live-betting for example?

King: The live-betting has been pretty popular since day one. I would say the big story this year is going to be our same-game parlay product. This is where you can bet on multiple things happening in the same game and we are really the only ones in the market that offers it. The Super Bowl is perfect for same-game parlay betting. It allows people to say “here are the three guys who I think are going to score a touchdown.” The customer acceptance of the product so far this year has been off the charts.

See also: 10 Super Bowl prop bets including ‘Doink Special’ and ‘Fat Man TD’

MarketWatch: Florida, the state where the Super Bowl is, was close to legalizing sports betting in 2020, but it never happened. How closely are you watching new states attempting to legalize gambling?

King: Our head lawyer once gave me a good piece of advice which was “the chances of passing any law is 50/50 until it actually passes.” It’s either going to pass or it’s not and I’ve taken that to heart. The way we look at the world is we think about the total number of states that are considering sportsbetting and we assume that some percentage of those are going to pass. It’s just hard to predict which ones are going to get it over the goal line. We are confident that you’re going to see a number of states pass it this year, we just don’t know which ones.

MarketWatch: The four states with the highest populations: California, Texas, New York and Florida have not legalized sports betting yet, do you see those states as game-changers for your business?

King: We certainly see every new state as a market opportunity, and obviously the bigger the state the bigger the market opportunity. But, the real change is what is already happening. Sportsbetting is becoming part of the narrative around sports. It’s embedded in how we talk about sports and even in those big states it’s a bit of a when — not if — question because people are understanding the size of scope of the illegal market and the fact that it’s just common sense legislation to try and put it out of business. I don’t necessarily view them as game-changers because the reality is we are already in the middle of the game. Certainly a big state will accelerate things.

MarketWatch: Do you think the pandemic will force states to legalize sports betting faster?

King: I think it will be the case. I think it will be the case for sports betting and igaming. You have two things going on. One is the fiscal pressures for any individual state are greater than they have ever been. I do think states will look for ways to help them claw out of fiscal holes that were created by the pandemic. But the other thing is more states passed laws around sports betting and igaming and demonstrated that they are win-win common sense legislation. It allows consumers to do what they love, and it generates tax revenue for the state and puts an illegal market out of business. It’s a pretty easy choice to make.

MarketWatch: Are you guys advertising during the Super Bowl this year?

King: We are not going to be during the game. We didn’t think it made sense to do a Super Bowl ad this year.

MarketWatch: Do you think the NFL would like an ad for a sportsbook during the game?

King: The NFL approves all ads for the game, (laughs) so they are not going to let a sportsbook ad go during the game at this point.

MarketWatch: FanDuel is not a public company, but when you see huge growth of other public betting companies like DraftKings
DKNG,
+1.12%

and Penn
PENN,
+8.93%
,
do you feel jealousy or do you feel like it’s just good for the industry?

King: Our focus is on the fan, and where we focus on winning is in delivering the best product and best fan experience on the market. When we get customer feedback and look at the market share reports, it’s clear we have the number one business out there. And that makes us very proud. Stock prices, as we’ve seen over the last few weeks (laughs) can be somewhat ephemeral.

See also: Mark Cuban to WallStreetBets traders: ‘Thanks for changing the game — thanks for taking on Wall Street’

MarketWatch: What about from a “high tide raises all boats” line of thinking?

King: From a perspective of people understanding more about the industry and how it’s additive to the sports ecosystem, that’s a good thing. So anything that does that is a good thing. It’s also a big market. We don’t look at things as a zero-sum game; we look at it as we are in the early innings of a big business game. That competition breeds innovation.

MarketWatch: In our interview last year, we discussed the idea of FanDuel as a public company. Is going public something that you have discussed with your team?

King: Our focus is just trying to build the best business we can. There’s just so much to do to grow the business and innovate the product. We are well-funded by Flutter
FLTR,
+0.11%

and we have all the resources we need. We are just trying to grow the business.


I think it will be a long time before we see a big election betting market here.


— Matt King, CEO FanDuel

MarketWatch: Is election betting something you’re interested in?

King: I think clearly people find election betting as an interesting way to engage in politics. There’s a lot of legal restrictions in the U.S. that don’t exist in Europe. Our focus has been offering free to play games on the presidential debates. We can see there’s a lot of interest in it. I think it will be a long time before we see a big election betting market here.

MarketWatch: So the 2024 and 2028 presidential elections, you don’t anticipate election betting by then?

King: I don’t think it will be a big thing mostly because regulations will continue to restrict the market and I don’t see those regulations changing. The demand is definitely there though.

MarketWatch: Who do the sportsbooks need to win?

King: The Super Bowl is not about making or losing money as we talked about last year. It’s about giving fans a phenomenal experience. More of the bets are on the Chiefs. If the Chiefs win and cover the spread we are going to lose a few bucks. The same is true if it’s a very high scoring game, which is pretty typical.


If the Chiefs win and cover the spread we are going to lose a few bucks


— Matt King, CEO FanDuel

MarketWatch: What is sports betting like 10 years from now?

King: I think it’s less about sports betting in isolation and more about the convergence of things like sports betting and gaming in general with sports and sports media. It’s safe to say that all the sports rights owners are trying to find new ways to engage fans. I think you’re going to see some great stuff for the next generation fan experience. You may see new ways to watch sports, a more customized experience.

See also: Tickets for this year’s Super Bowl are more expensive than they’ve been in over a decade

MarketWatch: A gamification of the actual games?

King: The ability to pop in and out of games more easily based on moments that matter. Reduced latency in the streaming feeds. You’ll see some alternative broadcasters, whether it’s your favorite Twitch personality announcing the game or somebody who may take a more betting oriented look at the game. A more build-your-own experience versus having to consume the same broadcast that 20 million other people are watching.

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