A DraftKings executive has confirmed that the sports betting and daily fantasy sports operator is exploring ways to go public and that becoming a public company had been something its management had discussed a long time ago.
During an event in Manhattan on Thursday, Ezra Kucharz, Chief Business Officer at DraftKings, told sports tech news outlet SportTechie that they are “looking at a bunch of different options”.
Mr. Kucharz’s comments basically confirmed recent reports that the company was in talks to be acquired by a special purpose acquisition company (SPAC) in a bid to go public.
Bloomberg reported late last month that the betting and DFS operator was in exclusive negotiations to be acquired by Diamond Eagle, a SPAC controlled by former Sony executive Jeff Sagansky and Metro-Goldwyn-Myer ex-CEO Harry Sloan.
It should be noted that merging with a SPAC enables a private company to go public without a traditional IPO. In its report, Bloomberg said, citing people familiar with the ongoing discussions, that a deal was yet to be signed and could yet fall through.
Asked about his company’s plans, Mr. Kucharz said that they have “openly talked about someday we might want to go public” and that they are currently “just looking at a bunch of options”. There are three ways for a company to become public, as the DraftKings Chief Business Officer noted – a traditional IPO, a direct listing, or a merger with a SPAC. Mr. Kucharz stressed that they “have nothing concrete” at this point.
Going Public amid Sports Betting Expansion
Mr. Kucharz’s confirmation that DraftKings is exploring different ways to go public comes as the company is looking to expand its presence in the nascent US sports betting market. The Boston-headquartered company came into being in 2011 as a daily fantasy sports contest operator. Its DFS product is currently available in 43 states.
Since last year, when the US Supreme Court struck down a long-standing federal ban on athletic wagering, DraftKings has also been providing retail and digital sports betting services. It ventured into the nascent but lucrative space with the launch of a mobile sportsbook in New Jersey in August 2018.
Since then, the operator has launched a mobile betting app in three more states – West Virginia, Indiana, and most recently Pennsylvania.
DraftKings is the second highest grossing sports betting operator in New Jersey, behind only its archenemy FanDuel. In Indiana, where it went live on October 3, DraftKings emerged as the early market leader. The company handled $39.3 million in bets in October and its handle last month accounted for 43% of all bets placed in the Hoosier State.
Mr. Kucharz said last week that “the largest portion of our business right now is fantasy sports” and “it will probably be that way for a little while [because] we need more states to come online.”
The company’s CEO, Jason Robins, provided similar comments in an interview earlier this year, saying that DFS is still their primary product, accounting for nearly two-thirds of their business, but sports betting was growing at a much quicker rate and could take over as their leading product in the near future.
Source: DraftKings’ Ezra Kucharz Confirms It Is Exploring Options to Go Public, SportTechie
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