Greg Karamitis, DraftKings | Actifio Data Driven 2019
Channel: SiliconANGLE theCUBE
Date: 18/06/2019

Greg Karamitis, SVP of Fantasy Sports at DraftKings sits down with Dave Vellante (@dvellante) and Stu Miniman (@stu) live at Actifio Data Driven 2019 at the Intercontinental hotel in Boston MA

#DataDriven19 #Actifio #theCUBE

https://siliconangle.com/2019/06/20/fantasy-sports-startup-takes-calculated-risk-bets-data-datadriven19/

Fantasy sports startup takes calculated risk, bets big on data

Gentlemen and ladies … place your bets! Easily accessible from your personal phone and plenty fun to play, the online fantasy sports market is riding an all-time high.

Whatever your favorite sport, there’s a fantasy game for you. And market growth is predicted to keep climbing, from $14 million in 2018 to $33 million by 2025. Claiming the crown as the industry heats up is fantasy sports content provider DraftKings Inc.

“We’re not playing for second place,” said Greg Karamitis (pictured), senior vice president of fantasy sports at DraftKings. “We want to be a market leader.”

Karamitis spoke with Dave Vellante and Stu Miniman, co-hosts of theCUBE, SiliconANGLE Media’s mobile livestreaming studio, during the Actifio Data Driven event in Boston. They discussed the rise of online fantasy sports and DraftKings’ strategy to dominate the market (see the full interview with transcript here). (* Disclosure below.)

Take a calculated risk to go all in
DraftKings is the current MVP of fantasy sports sites. A heavy marketing blitz in 2015, where commercials such as this one aired in heavy rotation across the U.S., made the company a household name. Outspending massive companies, such as AT&T and Warner Bros., may have seemed like a crazy strategy for a small startup, but the gamble to grow wasn’t random.

“We’ve [always] been a very analytically driven company,” Karamitis said. “We’re a company that ends up taking risks, but we take calculated risks.”

With loan-to-value ratios higher than customer acquisition costs, the company knew that it could afford to make an investment in marketing. “We did the math, we figured out this is a worthwhile shot, we pushed in for it, and it really took off,” Karamitis stated.

Analytics drives every decision made at DraftKings, so much so that Karamitis ranks the company as “one of the most analytically based companies definitely in the market, but also of general companies right now.”

Predicting outcomes is critical in an industry where the risk-reward ratio can be very skewed. “If we’re right, we make a little bit more, but if we’re wrong, we lose a ton very, very, very fast,” Karamitis said. “So, our ability to be very, very sound analytically is what allows us to push the envelope and grow, grow, grow but not lose our heads along the way.”

The company’s Millionaire Maker contest, where a $20 entry fee gives the chance to win a million dollars, was another gamble that paid off. While the seemingly crazy odds of winning big on a low bet made it a viral hit, the risk-to-reward ratio was carefully calculated by DraftKings.

“That energy of doing disciplined analysis … then taking the risk on the back of it, is what allowed us to grow a lot,” Karamitis said.

The odds favor a horizontal strategy
As legalized sports betting gains traction across the U.S., an enormous new sector is opening in the online gambling market. Retaining its number 1 spot as competition heats up is the next challenge for DraftKings.

“As markets open up, we need to be able to get into the market very, very fast. And that means our tech team needs to be working feverishly to make sure that we can hit the requirements that each legislator and each regulator puts on market entry in their state. We need to be making sure we’re constantly figuring out what are the product elements that are absolutely critical for our user,” Karamitis said.

Right now, the data supports a horizontal strategy, with build-out across all sports, including fan favorites such as NASCAR and MMA. “If users are interested in a product, we don’t want them to have to go elsewhere. We want to be able to have the offerings that any critical-mass-type environment is going to have,” Karamitis said.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the Actifio Data Driven event. (* Disclosure: TheCUBE is a paid media partner for the Actifio Data Driven event. Neither Actifio Inc., the sponsor for theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)