DraftKings Announces Partnership With Sports Data Provider Genius Sports
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On Thursday, DraftKings announced a landmark partnership with Genius Sports, a sports data and technology company that provides “data management, video streaming, and integrity services to sports leagues, bookmakers, and media companies”. Following a partnership in April, Genius Sports holds official data rights to the NFL‘s precious content package. DraftKings will now receive exclusive sportsbook data from Genius Sports and access to its live metrics and feeds for betting lines.
Specifics of the Partnership
The deal’s financial terms between DraftKings and Genius Sports were not disclosed, but DraftKings will receive valuable intellectual property and statistics from Genius Sports. DraftKings will get access to Genius Sports’ live video feeds for over 170,000 sports events per year, including the NFL, NBA, MLB, NASCAR, and international properties such as the English Premier League and Liga MX.
DraftKings will also use Genius Sports’ BetBuilder to offer custom bets, make-your-own bets, and single-game parlays. FanDuel, a major competitor of DraftKings, has been praised for its unique and customizable offering of single-game parlays, which allow bettors to combine various betting markets for the same contest to boost potential payout.
DraftKings Chief Business Offer Ezra Kucharz described how the partnership would be “mutually beneficial” by allowing DraftKings to “expand on the capabilities of [its] products and provide new and exciting features to [its] customers like single-game parlays”. DraftKings has developed a strong customer base and pristine reputation in the sports betting space, so this is significant for Genius Sports.
DraftKings Profitability
In May’s first-quarter earnings report filed, DraftKings reported $312 million in revenue and raised its fiscal year 2021 revenue guidance to $1.05 billion to $1.15 billion from $900 million to $1 billion. DraftKings is a publicly traded company on the New York Stock Exchange with the ticker DKNG. It closed at $50.48 on Thursday, up 3.72% from Wednesday. Its second-quarter earnings call is on Friday at 8:30 AM EST, so a further increase in its stock price is possible.
In April, DraftKings joined Caesars and FanDuel in partnerships with the NFL, which allow them to use the NFL’s intellectual property and trademarks for their marketing purposes. In addition, these sportsbooks will operate a content-sharing model with the NFL. They will be allowed to use other material such as NFL highlights and its proprietary Next Gen Stats data on their respective websites.
What is Genius Sports?
Genius Sports is a sports data and technology company that distributes real-time play-by-play stats for several sports events. In April, Genius Sports announced a lucrative contract with the NFL, which could be worth up to $1 billion over the course of the four-year contract. In addition to typical cash payments, the NFL took a 5% equity stake in Genius Sports.
Also, in April, Genius Sports announced a $1.5 billion merger with dMY Technology Group, a special purpose acquisition company, which helped present its Initial Public Offering (IPO). Following the IPO, Genius Sports is now traded on the NYSE with a ticker of GENI. Its market cap is now $3 billion. Genius Sports reported $53.7 million in its first-quarter earnings report and raised its revenue guidance from $190 million to $260 million. Following the DraftKings announcement, GENI is up 5.86% on Thursday.
Future Implications
Genius Sports isn’t done partnering with sportsbooks, and it is currently on a roadshow to enlist sportsbook clients before the start of the NFL season on September 9. DraftKings is the first of the NFL’s three betting partners to announce such a partnership, but FanDuel and Caesars could follow suit and pay for the official league data and live streams.
Sportsradar previously held the exclusive partnership with the NFL to distribute data, but Genius Sports took over following a proposal with some controversial implications. Genius Sports is now charging sportsbooks about 4% of their pre-game gross gaming revenue (GGR) and 6% of in-game GGR; that’s an increase of four times what Sportsradar was charging. Individual sportsbooks and bettors will face the burden of this increased cost, and the full impact it will have on smaller betting operators remains to be seen.
