Draft Kings (DKNG) & Dish Strike (DISH) A Win-Win Partnership
The sports betting company’s deal opens up new doors both immediately and in the future.
Fantasy sports and betting operator DraftKings Inc. (NASDAQ: DKNG) and wireless and television provider Dish Network Corporation (NASDAQ: DISH) unveiled a new alliance today in a joint press release. The two companies announced DraftKings’ services will be available to viewers first on the Hopper platform, and eventually on Boost Mobile and Sling TV, too.
Is this a significant move for the two or just another small convenience for some viewers to use? Let’s see what a closer look reveals.
The Draft Kings and Dish Partnership: Could it be a DKNG Stock Catalyst?
Two separate DraftKings services will be offered for Dish’s Hopper users. In states where digital sports betting is legalized, viewers will be able to use their TV, along with the DraftKings app on their mobile device, to place bets on live games while they’re watching them.
Betting odds and other useful info will also be displayed. Dish TV customers will be able to use the integration to put wagers on NBA basketball games, NCAA basketball games, and NHL hockey, with more sports in the pipeline for future gambling support.
Viewers in both sports betting legalized and non-legalized states will also be able to use the Dish TV integration and DraftKings app to enter fantasy sports contests, then watch the live games corresponding to their fantasy predictions. DraftKings already has official fantasy partnerships in eight countries and with an even wider range of sports organizations, including the National Football League (NFL) and NASCAR.
DraftKings co-founder Paul Liberman says the partnership is “a unique opportunity for fans to watch games and engage with our real-money products while the technology also allows for further innovation ahead.” Dish TV’s group president also commented on the partnership’s possibilities for major long-term expansions by pointing out DraftKings integration’s “potential applications across our 5G wireless buildout in the future.”
Good News for DraftKings and Bad News for Fubo?
Sealing the deal with Dish Network has the potential to give DraftKings an upward nudge both right now and over the next several years, contributing to its ongoing growth. Not only does the move show the digital sportsbook company is still looking actively for new opportunities, but it’s also positioning DraftKings for objective revenue stream growth.
The integration will boost sports betting handle in states currently allowing this type of gambling. But the fantasy sports aspect will familiarize viewers with DraftKings in non-legalized states, positioning it to step in and take the sports bets of those fans immediately once legalization eventually occurs in their jurisdictions, too.
Investors shouldn’t discount the potential revenue boost for Dish Network, either. While TV watching overall is declining, dropping by as much as 42% among younger people in some countries according to Deloitte Global research, surveys also indicate sports betting availability tends to slow the decline in sports viewership or even boost it.
Sports betting is believed to drive US sports TV viewership upward by at least several percentage points in legalized states, TicketNews reported as early as 2019, even before 2020’s digital sportsbook surge. Fantasy sports and sports betting availability through DraftKings should put more eyes onscreen for Dish, which in turn means more advertiser dollars.
Also of note, if DraftKings’ strategy sounds familiar, it’s because fuboTV (Nasdaq: FUBO) is planning to make sports betting a central feature of its offerings. fuboTV released earnings last night, delivering 83% revenue growth, yet its shares are falling today. As of mid-day, they were down 15%.
Of course, there are two ways of looking at this partnership: the first is a direct competitor to fuboTV that could steal customers. The second is further validation of its sports betting concept. With investors selling the stock despite strong earnings, it’s likely fuboTV investors are seeing more downsides than positives.
Overall, the new partnership between DraftKings and Dish is likely to drive profits and thus support higher stock value for both, not only short-term but into the longer run as sports betting legalization continues its advance across America.