Sports Betting Surge: DraftKings and FanDuel Lead with Parlays

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Transcript

00:00There are some surprises when you come on and some stories we surprise me when you come

00:08on.

00:09This is the least surprising story that we would start off with.

00:11But let's tell it.

00:13People love betting on parlays.

00:15And that's why these companies like DraftKings and FanDuel and BetMGM are making all of their

00:20money.

00:21That's the simple way of me saying it.

00:23Maybe you can give me the more intricate description.

00:25Yeah, definitely.

00:28It's been the theme of sports betting in the last year, last two years, is you see

00:32these companies like DraftKings, like FanDuel leading the way, making these huge investments

00:37on product, which has then translated into better parlays, more easy-to-use systems,

00:46more markets available.

00:49And then you see that in their marketing as well.

00:50I think at this time last year when I was opening up a sports betting app, or maybe

00:54two years ago rather, you would have boosts on games or boosts on bets.

00:58Now almost all those boosts and all those promos are incentivizing you to do a parlay

01:03or a same-game parlay, even more importantly.

01:06Morgan Stanley just came out with this new survey data, which is really interesting.

01:10It said about 48% of all bets that people placed last year or this entire year were

01:17parlays or same-game parlays, which isn't surprising, but it's a little stark to see

01:22that data out there.

01:24These are high-margin bets for sportsbooks, low-margin bets for sports bettors.

01:28Essentially, they advertise them as kind of lottery tickets that you bet.

01:31And when somebody bets $5 to win a million or something, that's actually really good

01:36for the sportsbooks because they can advertise it online and it gets a lot of free advertising

01:40as well.

01:41So no surprises there in terms of how this has grown.

01:45Morgan Stanley detailing that it's especially in newer states where sportsbooks launched

01:50more recently, parlays are even more popular.

01:52I think in Louisiana, it was almost 60% of all bets that people placed there were parlays,

01:58which is just staggering when you think about how sports betting has traditionally operated

02:01over the years.

02:02But yeah, you see that translate in hold rate increasing for operators.

02:05And it's no surprising that companies like DraftKings are now really inching towards

02:08profitability or had some profitable quarters.

02:11So it's just going to continue to see this product development go on.

02:15And yeah, not surprising to hear that DraftKings is kind of ahead on it.

02:22Yeah.

02:23Yeah.

02:24Yeah.

02:25Yeah.