Editor’s note: DraftKings Ontario went live on May 19.
DraftKings has big plans for Ontario.
But one of the leading US sportsbooks doesn’t expect American dominance to cross the border all that easily. At least not right out of the gate. Speaking of right out the gate, DraftKings was not even at the start of Ontario online gambling market.
Not that anyone had a doubt but more confirmation of DraftKings Sportsbook in Ontario came last week during an earnings call. The province’s expanded market launch in April and DK will be there. Needless to say, the Ontario online sportsbook and online casino launch is anticipated by many industry players.
“We look forward to launching in Ontario and competing in that market, pending licensure and required approvals,” said Jason Robins, CEO, in the Q4, 2021 earnings round up.
“For context, Ontario represents about 40% of Canada’s population and would be the fifth-largest U.S. state.”
But numbers won’t likely be as high on the balance sheet for Boston-based DK — or any of its American rivals.
American companies dominate American market share
The DraftKings CEO went on to temper expectations for an American-like podium finish in Ontario.
Getting on to that medal stand has proven to be very lucrative for brands like DraftKings, FanDuel and BetMGM in the young USA sports betting market. The trio dominates in US states such as Arizona and Michigan, which both launched online sports betting last year.
In Michigan, for instance, more than $3 out of every $4 wagered was bet on one of those three platforms. And that’s in the first year of online sports betting alone.
Even the next set of “the rest” features formidable American companies such as Caesars and Barstool Sportsbook, owned by Penn National Gaming — which also now owns Canadian brand theScore Bet.
However, in the US last year, regulated sportsbooks typically raced from the same start line. With much of the Ontario sports betting market already signed up before those brands take their first bet, Robins said market shares could be down.
Ontario grey market presence eliminates ‘early-mover advantage’
Despite the cursory mention in the prepared statements of the call, Ontario came up repeatedly during the question period at the end.
Robins spoke to the unique approach Ontario’s private internet gaming sector requires due to the existing grey market. Because of that, DK will compete with many brands that have already operated in the province for years.
“Definitely, it’s different. There’s been a gray market there for many years,” Robins said. “A lot of the operators [we] will be competing with have already been operating in and have already had time to build customer bases. So as noted in last year’s Investor Day, we are not projecting the same level of market share in Ontario or in Canada in general that we are projecting in the U.S. Just because we don’t have that early mover advantage.”
Robins went on to say DraftKings will approach Ontario the way they approach everything else: analytically.
“But it should be a good market,” Robins added. “It has iGaming, it has sports betting, and we already have a decently sized user base of DFS customers there. So we’re pretty excited about Ontario.”
Robins: DraftKings Ontario ad spend will be data-driven
Robins also addressed questions around DraftKings’ planned promotional spend for Ontario compared to New York. Acquisition of Ontario online sports betting and casino players could prove costly.
“It’s something I think we’re still evaluating,” Robins said. “And of course, it has iGaming. So I think that improves the overall TAM available to us,” he added. “So just like we will with external marketing, we’re going to do a lot of testing, and we’re going to base whatever decisions we make on what the data tells us.