Last week when Draftkings announced to go public avoiding the conventional IPO route the news caught many by surprise in the European and American sports betting industries. Draftkings is to merge with gaming content and technology supplier SBTech.
The new entity following the merger would give birth to sports betting giant worth $3.3 billion.
While the new entity will have the name Draftkings and will also be headed by Jason Robins, Co-Founder and CEO of Draftkings.
Talking to investors following the announcement of the merger, Robins termed the deal as a “powerful combination.” He said that it would create a premier, pure play, US-based sports digital entertainment and gaming company.
“Together our companies will be able to realize DraftKings’ vision to build the best, most trusted and most customer-centric destination for ‘skin-in-the-game’ sports fans. To develop the most entertaining real money gaming products and offers and to forever transform the way people experience sports,” Robins added.
He commented: “We are positioned at the intersection of digital sports entertainment and gaming. The global gaming and entertainment industry is valued at approximately $2.5t. The global gaming market, including casino, sports betting, slots and lottery is approximately $450bn, of which just over 11% is currently online.”
Commenting on the online gaming possibilities and opportunities that the firm plans to capitalize on he said: “The estimated market maturity could be anywhere between $14bn to $23bn in gross revenue. We triangulated on these estimates in a variety of ways including existing third party research, an extrapolation of New Jersey results, and an extrapolation of more mature markets like the UK and Australia.”
The CEO also said that he expects the company’s revenue to grow by 0% to $540m in 2020, an additional 30% in 2021 to $700m. Robins said that as they are to scale the businesses they can achieve more than $1bn in EBITDA on a revenue base of $3.7bn in the US alone.
Talking topline figures, he commented: “We expect to be able to grow our revenue by 30% to $540m in 2020, an additional 30% in 2021 to $700m. As we scale our combined businesses we believe we can achieve more than $1bn in EBITDA on a revenue base of $3.7bn in the US alone.”