DraftKings CEO: Here's Why We Got Into Trouble With Regulators

DraftKings CEO Jason Robins (R) speaks to FORBES reporter Alex Konrad at the Under 30 Summit in Boston.

A year ago the future of daily fantasy sports looked precarious. Amid a wave of intense regulatory scrutiny, in late 2015 New York Attorney General Eric Schneiderman called the concept illegal, and specifically singled out industry heavyweights FanDuel and DraftKings for leading “a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country.” The companies were ordered to immediately stop accepting bets in New York.

Today the outlook for the fantasy sports business is much brighter.

On Monday afternoon, at FORBES’ Under 30 Summit in Boston, DraftKings CEO Jason Robins offered his take on the company’s history of regulatory trouble, which concluded in August with the legalization of daily fantasy sports in New York. He also spoke about his forecast for the industry going forward.

Robins began Monday’s discussion by describing the strategic misstep he thinks catalyzed government pushback toward fantasy sports providers. In 2015 DraftKings massively increased its advertising expenditures from the prior year, when it spent just $50 million. For a few weeks the company was among the nation’s largest ad buyers, on par with huge corporations like AT&T and Geico. The flurry of activity, and resulting traffic to the DraftKings site, may have attracted regulators who hadn’t realized how big the industry had grown.

To make matters worse, Robins believes that aggressive marketing overexposed the company’s brand and started to “rub [customers] the wrong way.” As a result, this year DraftKings significantly dialed back its advertising, though now Robins thinks that he may have overcorrected.

http://www.forbes.com/sites/noahkirsch/2016/10/17/draftkings-ceo-heres-why-we-got-into-trouble-with-regulators/#276a98582746




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