DraftKings CEO on prediction markets versus sports betting

DraftKings CEO Jason Robins emphasized to CNBC’s Jim Cramer that prediction markets are not driving customers away from sports betting and that the two have different offerings.

“If you just go and spend five minutes looking at the products you’ll see what I mean; it’s night and day,” Robins said. he said. “The amount of markets, even the pricing, is not something I would consider competitive for what we do.”

Robins pointed to the UK and Western European markets, where both currency-based betting and traditional sports betting are available. In those areas, he said, “trades’ share of the total industry generally has low to mid-single digit percentages,” suggesting there is little volume migration from sportsbooks.

But DraftKings is making its own foray into the prediction markets. IT acquired Prediction platform RailBird announced last month that it would launch a mobile app that allows users to bet on outcomes across a variety of industries, including finance and entertainment.

Robins told Cramer that prediction markets present an opportunity for DraftKings, especially in places like California and Texas where traditional online sports betting is illegal. But he added that the company will continue to focus on sports betting in states where the practice is legal.

“The reality is that the momentum seems to be here, at least in the near term,” Robins said of the prediction markets. “They’re here to stay. I think we need to participate with that in mind and have the tools to win.”

company reported Earnings after Thursday’s close lowered its full-year sales outlook, sending shares down more than 5% in extended trading.