A decade after launching a fantasy sports company with Jason Robins and Paul Liberman from a spare bedroom in Liberman’s Boston suburb apartment, Matt Kalish has watched and learned.
A decade after launching a fantasy sports company with Jason Robins and Paul Liberman from a spare bedroom in Liberman’s Boston suburb apartment, Matt Kalish has watched and learned.
And, sometimes, he’s waited.
DraftKings, created by three friends and coworkers who back in 2012 thought they could improve the daily fantasy sports experience, became the latest online sportsbook and casino to open its digital doors for business in Ontario on Wednesday.
“This will be our 18th (launch),” Kalish, the president of the company’s North American business, said Tuesday. “Every market is a little different and each time you open, you pick up a few learnings.”
The sports betting and daily fantasy sports behemoth enters a crowded market with 22 internet gaming sites already in operation including its major betting and DFS competitor FanDuel, which was among the operators to launch when Ontario raised the curtain on its open, regulated market on April 4. The result is a potpourri of established, well-known brands, former grey market operators who have made the transition to a regulated world, and newcomers like NorthStar Bets, which opened last week.
While others have been bullish on the opportunities, Robins, the company’s CEO, tempered DraftKings’ expectations around Ontario during a call with financial analysts in February by pointing to the province’s decades-long grey market.
“When states open for the first time, you’ve seen splashy launches with giant, mega promotions,” Kalish said, reiterating Robins’ thought. “People in Ontario have been betting for years. We expect (the competition for customers) to be a long-term journey.”
DraftKings enters the market minus the presence of both the Raptors and Maple Leafs, first-round casualties of their respective playoffs. In a news release to announce their Ontario opening, DraftKings pointed to the remaining rounds of the Stanley Cup playoffs, the ongoing MLB and MLS seasons, and the FIFA World Cup in November and December as coming attractions for the province’s wagering populace.
“We would love to have local teams in the playoffs and no one is happy about how the Leafs and Lightning series turned out,” said Kalish.
For Leafs and Raptors fans in Ontario who are also fantasy sports players, there’s an additional layer of discontent with both DraftKings and FanDuel hitting the pause button on their DFS offerings. The Fantasy Sports and Gaming Association estimates that there are two million fantasy players in the province, but they are being sidelined by the new industry. The regulations established by the Alcohol and Gaming Commission of Ontario require all players to be located within the province, meaning a reduction in the number of potential player pools and the revenue that can be generated by the operators.
“We’ve been serving Ontario with DFS for years,” said Kalish. “We’ve built a large audience of fantasy sports fans, and we’re working with the regulators to bring back fantasy.”
Kalish was non-committal when asked about the company’s partnership strategy for Ontario. Last fall, DraftKings’s new deal with the NHL as a betting, DFS and online gaming partner also included providing data and daily fantasy content to the league’s new rightsholder Turner Sports – which reported Tuesday record numbers on American cable TV for the first round of the playoffs from Game 7 of the Rangers-Penguins and Leafs-Lightning series.
Since the opening of Ontario’s betting business, the NHL has announced expanded partnership deals with FanDuel and BetMGM to include Canada, and brought in OLG as an official sports betting partner. Maple Leaf Sports and Entertainment last month added FanDuel, Poker Stars and PointsBet Canada to its posse of partners.
On the first day of Ontario’s new market, FanDuel Canada agreed to a multi-year deal with TSN to be the network’s official betting partner. Sportsnet hasn’t announced an official partner, although Bet365 – and for the first time on Tuesday night, DraftKings – have sponsored betting-related segments on the network’s NHL playoff broadcasts. In the U.S., DraftKings is a co-official betting partner with FanDuel for the NBA, and with BetMGM is a co-exclusive partner of MLB.
“As we get into the market, it will be more apparent what those partnerships are,” said Kalish.
Along with the race for business alliances with sports leagues, teams and organizations, sportsbooks have also allocated generous budgets for advertising and marketing. Television commercials asking viewers to sign up for a sportsbook app have been ubiquitous beyond the sports networks. While DraftKings has also been aggressive in the bid to acquire customers – its sales and marketing budget totalled more than C$1 billion in 2021, Kalish predicted the Ontario market will settle down.
“When we enter a new (jurisdiction), we’re trying to build an awareness that our products are available,” he said. “There are so many operators launching in Ontario. (The stream of ads) is temporary.
“I watch sports, too. I don’t want to see 3-4 betting ads every commercial break.”