Jerry Jones, Robert Kraft Keep Stakes in DraftKings
According to ESPN, New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones have each retained their stock in daily fantasy sports giant DraftKings. DraftKings, which has been a huge DFS provider for a number of years, recently dove into the sports betting realm by launching their new sportsbook.
The National Football League has been incredibly hesitant over the years when it comes to associating with sports gambling, but the league seems to have eased its stance in recent months. Kraft and Jones reportedly have small stakes in the company, but they are stakes nevertheless. Both NFL owners reportedly have less than 5 percent in the company. A court disclosure revealed that 21st Century Fox is the only company involved with a stake of 10 percent or higher in DraftKings.
Jones’ investment in the company reportedly comes through Legends, which is his hospitality company. Legends is responsible for providing food and drink at a number of sports venues around the United States, including several NFL stadiums. Jones and the family that owns the New York Yankees, the Steinbrenners, are Legends’ principal owners. The Patriots declined to comment on Kraft’s involvement.
NFL spokesman Brian McCarthy issued a statement to ESPN that said the league’s policy “enables personnel to own equity interest in an entity that generates less than a third of its revenue from gambling-related operations.” Obviously, most of the money DraftKings currently generates comes from daily fantasy sports, not sports betting.
However, that could change rather quickly. DraftKings CEO Jason Robins said in a recent interview with Yahoo that he thinks the company’s primary focus will be sports betting within the next 2 or 3 years. Eilers and Krejcik Gaming, a research firm, valued DraftKings’ daily fantasy revenue from 2017 at $218 million.
DraftKings’ shift in focus toward sports betting could complicate matters for both Jones and Kraft if the trend continues. If the platform’s sports betting-related revenue surpasses the NFL’s current standards, both owners could ultimately be forced to divest their shares. That would certainly put a dent in the checkbooks of both men, which could ultimately result in a conflict with NFL commissioner Roger Goodell. Sports betting is a burgeoning industry in America, and having to sell their respective stakes could ultimately cost Kraft and Jones tens of millions of dollars.
Fortunately for Kraft and Jones, that isn’t something that is likely to be an issue until a couple of years from now. Daily fantasy is still the primary money-maker for DraftKings, as the sportsbook is still in its early stages. As of now, the sportsbook is only open to bettors in New Jersey, though it will expand as more and more states begin to legalize and regulate sports gambling.
DraftKings was the first company to launch a mobile betting app when it launched its sportsbook back on August 1. The book has been accepting bets on NFL preseason games since then, and bettors may also place future wagers. DraftKings has the Patriots listed at 6-1 to win Super Bowl LIII, with the Cowboys at 28-1 as of this writing.
While the NFL is more open to the idea of associating with sports gambling than it’s been in the past, the league is reportedly still treading lightly around the matter. The NFL is reportedly concerned that sports gambling could lead to some ethics and integrity questions when it comes to the games themselves. The NFL was among the many sports leagues in the United States to oppose New Jersey’s attempt to strike down PASPA (Professional and Amateur Sports Protection Act). With PASPA in place, Nevada was the only state in the country allowed to offer legal sports wagering.
The lawsuit ultimately found its way all the way to the U.S. Supreme Court, who subsequently voted to strike down PASPA. That cleared the way for states to create their own laws and decide individually whether to legalize sports betting. Since then, New Jersey, Delaware and Mississippi have opened sportsbooks. The racetrack at the Meadowlands in New Jersey has also started accepting wagers. The track is very close to MetLife Stadium, the home of the NFL’s New York Jets and Giants.
The NFL is trying to get involved. The league is reportedly lobbying in Washington D.C. in an attempt to get federal framework in place in order to oversee sports gambling. Senator Orrin Hatch of Utah has also said that he plans to introduce new sports betting legislation in the Senate over the next few months.
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