DraftKings unveils Progressive Parlay betting product amidst ongoing feud with fantasy gaming companies

DraftKings introduced a new betting product named "Progressive Parlay" during its Investor Day on Tuesday. According to reports, the product mirrors the offerings of smaller fantasy gaming companies such as PrizePicks and Underdog Fantasy, with whom DraftKings is currently engaged in a public feud. The new betting product empowers customers to make over/under prop picks against the house.

CEO Jason Robins, during the Investor Day presentation, expressed optimism about Progressive Parlay, calling it a "win-win" where customers would enjoy the product, and the company would benefit from higher margins. 

Robins said: “Those are the types of things we’re focused on. The customer likes it, but also, there are so many of those products that can be great financial drivers for DraftKings.”

Progressive Parlay allows bettors to swiftly build a parlay card, still enabling them to win money even if some of the bets lose. However, the crucial distinction lies in its regulation as sports betting, making it unavailable in fantasy-only states. 

The feud between DraftKings and smaller fantasy companies has intensified in recent months as these smaller businesses demonstrate significant growth in popularity and revenue. PrizePicks, for instance, reported $28.2 million in entry fees in Arizona through August, surpassing the fantasy products of DraftKings ($14.6 million) and FanDuel ($3.4 million). 

The Investor Day presentation also shed light on DraftKings' path toward profitability. While the company previously expected each new state to reach "contribution profitable" over a three-year period, it now projects that new states could achieve this in as little as five quarters. 

CFO Jason Park highlighted: “Put simply, more recent states have citizens that are geared up and ready to go when their state finally launches online sports betting.”

DraftKings provided revenue estimates for the future based solely on states with existing legal betting, forecasting $4.7 billion in revenue in 2024, $6.2 billion in 2026, and $7.1 billion in 2028.

Progressive Parlays is expected to launch soon on the DraftKings sports betting app.