Sean Kelly

Sean Kelly inquired about the connection between prediction markets and pricing, specifically the narrative of longer-term pressure on hold rates for straight bets, and how price-sensitive customers are in the sports book ecosystem.

Answer

Jason Robins, Co-founder and CEO of DraftKings, noted that current prediction market pricing is generally worse than OSB. He explained that OSB benefits from higher margins due to a strong bet mix (parlays), with singles hold in the mid-single digits. Predictions involve more fees across the ecosystem, whereas DraftKings is primarily the market maker in OSB, allowing more margin. He also highlighted that OSB promotions engage customers, while predictions use rebates for market makers, making the overall value proposition better in OSB currently.

Sean Kelly connected prediction markets and pricing, asking about the narrative of long-term pressure on hold rates for straight bets in the industry and how price-sensitive or price-aware customers are in the sports book ecosystem.

Answer

Jason Robins, Co-founder and CEO of DraftKings, noted that current prediction market pricing is generally worse than OSB, and it will be challenging for it to improve significantly. He explained that OSB benefits from a strong bet mix, with singles hold in the mid-single digits, and fewer "mouths to feed" in the ecosystem compared to prediction markets. Mr. Robins also highlighted that OSB promotions engage customers directly, unlike prediction markets which use rebates for market makers, making the overall value proposition better for retail customers in OSB.