DraftKings CEO Says Company Continues to Monitor California Sports Betting Future

The future of California sports betting remains hazy even as tribal nations work more closely with online operators. But that uncertainty doesn’t seem to be worrying key stakeholders. 

DraftKings CEO Jason Robins is the latest figurehead to wax optimistic over the potential for sports betting in California. In fact, his company may even be baking it into future revenue projections. 

As Sam MacQuillan of Legal Sports Report writes:

“DraftKings repurchased 3.7 million shares in Q1 and ended the quarter with $1.1 billion in cash. Robins said the company expects to generate about $750 million in free cash flow this year. Robins also addressed federal regulatory developments, telling investors that while prediction markets haven’t yet triggered sports betting legalization, they may become a ‘powerful lever’ to drive states like California. He said DraftKings is closely monitoring the space.”

“Closely monitoring” may be an understatement. Robins previously said that collaboration with tribes is the only way to legalize sports betting throughout California. His company has also made a series of hires over the past year or two, appointing candidates with tribal leadership experience, or simply closer ties to tribal relations.

Whether this all results in finalizing a sports betting agreement in the near future remains to be seen. At the very least, though, it speaks volumes that DraftKings, FanDuel and other companies remain so focused on the market. 

DraftKings Continues to Focus on Expanding to California Sports Betting Rather than Other Opportunities

When sports betting in Missouri goes live later this year, it will be the 39th state to offer some form of legal wagering. Sports betting is also legal in the District of Columbia and Puerto Rico, as well. At some point, the remaining holdouts may be seen as lost causes, prompting online sportsbooks in the United States to focus their attention and financial resources elsewhere. 

In recent months, many have wondered whether the current domestic sports betting climate might drive DratKings and other online operators to expand their business abroad. Robins, however, puts the kibosh on that—at least for his company. As Maquillan also writes: “Executives reaffirmed that US expansion remains the priority over international M&A, though they left the door open for global opportunities ‘under the right conditions.’

This is big for what it signals: a continued emphasis on the expansion of online sports betting in the United States. That will come as a welcome indicator for people who the legalization of wagering in places like California, Texas, Georgia and Minnesota, among others. At the same time, when you consider the math behind it all, it really is a no-brainer.

Holdout Online Sports Betting Markets Project to be Extremely Lucrative

The company GeoComply recently provided estimates for how much revenue markets without online sports betting stand to make if they legalize it. California was surprisingly left off the list of places studied, and it isn’t immediately clear why.

Still, we can look at the per capita projections of a similarly sized market like Texas. The folks at GeoComply project that Texas online sports betting will generate $302.4 million of revenue by Year of operations. If we apply that number to The Golden State’s population, the (rough) estimate for California sports betting revenue by Year 3 checks in over $380 million.

That is a monstrous number. And it speaks intimately to why companies like FanDuel, DraftKings, BetMGM, etc. aren’t diverting their expansion efforts elsewhere. There is still plenty of money to be made in the United States.

, these projections only cover the projected tax revenue, which is merely a percentage of the gaming revenue generated by the sportsbooks themselves. Even if the California sports betting tax comes in at 50 percent, this means operators in total can rack up $760 million in total revenue before having to pay the piper. 

What’s more, those revenue figures may prove to be conservative. Only a handful of states have implemented a sports betting tax of 50 percent. Either way, though, California online sportsbooks would stand to make $1 billion annually likely within the first half-decade of operations. 

Will Sportsbooks Ever Focus Their Expansion Efforts Elsewhere?

Granted, regardless of the potential payoff, every initiative has its limits. Sportsbooks will not sit around and invest resources in failed legalization attempts forever.

Right now, the dynamic between tribal nations and sports betting sites like DraftKings appears to be on the up-and-up. That could change if an agreement isn’t reached in time for it to appear on the 2026 electoral ballot. It could also shift if tribal nations continue to insist online sportsbook sites only enter the market in ing capacities, without any concrete chance to gain independent licenses. 

For the time being, sports betting advocates don’t have to worry about these companies abandoning their efforts. Like we said, too much money is at stake. And even if sports betting sites start focusing their attention elsewhere, it could simply pave the way for tribal nations to launch retail sports betting unencumbered. 

Still, this is something to at least keep in the back of our minds. The sports betting landscape continues to grow, but that progress will become more incremental than exponential only time. There are only so many states—so many people—in the USA. Without expansion into more markets, the industry will be faced with a cap it hasn’t yet incurred. That ceiling may still be a ways off, but it’ll be reached a lot faster if the California sports betting market—or, for that matter, the Texas sports betting market—don’t soon the legalization fray.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: