DraftKings Launches Subscription Service That Includes Better Odds
DraftKings has introduced a new subscription service called DraftKings Sportsbook+ that aims to enhance the betting experience for its users by offering improved odds on parlays. The service, which launched last week in New York, is priced at $20 per month and provides members with what the company refers to as "stepped up" profit boosts for parlays where each individual leg is set at odds of -500 or narrower.
LISTEN TO THIS ARTICLE:The subscription offers increased profitability for parlays, starting with a 10% profit boost on two-leg parlays. As the number of legs in a parlay increases, so does the boost, with a maximum boost of 100%, or double the profit, available for parlays consisting of 11 or more legs.
Related: DraftKings Spearheads Efforts to Legalize Sports Betting in TexasDraftKings stated that the service is designed to offer an enhanced fan experience by adding value and excitement to their parlay offerings. The rollout of DraftKings Sportsbook+ is currently limited to select eligible customers in New York, though the company did not specify the criteria for eligibility.
The service is designed to cater to customers interested in high-reward bets, which often involve greater risks. Parlays are particularly profitable for sportsbooks due to their structure, which requires all legs of the bet to succeed for the bettor to win. This high-risk, high-reward format allows sportsbooks to maintain higher margins while offering customers the potential for large payouts.
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DraftKings has been working to increase the adoption and complexity of parlay betting across its platform. Last year, CEO and chairman Jason Robins highlighted the company's focus on expanding its parlay product mix and increasing the average number of legs per parlay during its Q1 and Q2 earnings calls. Robins emphasized that there is substantial room for growth in this area and noted that the company's team is actively working to enhance its parlay offerings.
In August of last year, during the company's Q3 earnings call, both Robins and CFO Alan Ellingson reported progress in these efforts. They noted that margins on NFL parlays were projected to grow by 5% year-over-year. The structural sportsbook hold percentages, which measure the sportsbook's profitability, have also increased as customers continue to engage with DraftKings' parlay offerings.
The introduction of DraftKings Sportsbook+ builds on other innovations from the company, such as its progressive parlay product launched in December 2023. That product allows bettors to earn partial payouts even if some legs of their parlay bets are unsuccessful, adding flexibility and appeal for users. The new subscription service complements these efforts by providing an unlimited number of odds boosts for subscribers, which is uncommon in the U.S. sports betting market.
Odds boosts have long been a tool used by sportsbooks to attract and retain customers. They are often heavily utilized during the early stages of launching in a new market to encourage customer acquisition. Over time, they become a key strategy to reduce customer churn and foster loyalty. DraftKings Sportsbook+ differentiates itself by allowing unlimited boosts, giving subscribers additional incentives to place more bets on the platform and stay engaged with its offerings.
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