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DraftKings to Become CardPrinces? Fantasy Sports and Sportsbook Giant Enters Card Auction Business

DraftKings to Become CardPrinces? Fantasy Sports and Sportsbook Giant Enters Card Auction Business
June 8, 2023
Dylan Dittrich

Photo: DraftKings

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When the auction closes on June 18th, it'll be official: the most expensive sports card ever sold by DraftKings will be a BGS 9 Jayson Tatum National Treasures RPA. It has a current bid of $5,200.

There's a bit of work to do there to catch the likes of PWCC, Goldin, and Heritage, but if DraftKings is really going to make a play for a greater piece of the sports card market, you can bet that record is going much higher in the months and years ahead.

The Spring Sports Auctions hosted on the DraftKings Marketplace are the first card auction attempts for the daily fantasy juggernaut turned sportsbook, but they're far from the company's first exploration of the collectible world. Efforts in cards started earlier in May with auctions for break tickets, with those tickets corresponding to ownership of specific packs to be opened by the breakers. So far, the breaks, hosted by Steve Aoki, DraftKings co-founder Matt Kalish, and Chris Costa, have focused exclusively on basketball card product ranging from 1980-81 Topps to 2022-23 Prizm.

The show is're never going to guess this one....The Break. Sometimes the simplest answer is the best one.

Before the company dabbled in physical collectibles though, it was active in digital collectibles, putting a significant push behind NFTs in their heyday. The surge in demand for digital collectibles dissipated about as quickly as it arrived, and attention has pivoted to the also recently-declining, but comparatively resolute interest in physical sports cards.

DraftKings' pursuit of the space coincides with Fanatics' bolstering of both its sportsbook and collectibles businesses. The "build" method of starting a card marketplace will certainly lag the "buy" route taken by Fanatics in its acquisition of PWCC, and with the significant competition offered not only by PWCC but by all the other incumbents, you're left to wonder just how competitive DraftKings can be. Winning consignments of desirable cards is the ultimate challenge, particularly when your audience is not yet as focused or engaged as that of the competition.

That said, DraftKings has 2.3 million monthly unique users, a figure that surged 31% year-over-year in the fourth quarter of 2022. When you have a captive audience of literally millions of sports-crazed consumers that already spend - not just spend, but gamble - on your platform, the opportunity to cross-sell different expressions of fandom is appealing. The synergies are quite natural. While purchasing sports cards with aims of financial gain is typically not as overt a gamble as explicitly casting a bet on a sporting outcome, we've seen the power of the speculative appetite in the category. Perhaps the opportunity to collect or to speculate with lower risk (but not zero risk) of losing 100% of principal will appeal to some segment of that audience.

The rise in popularity and legality of sports gambling in the United States has surely increased the comfortability that many feel with staking some level of money on a sporting outcome. Of course, that money is often gone as soon as it's staked, with effectively nothing to show for it in a losing effort. That need not be the case in cards. To the extent DraftKings wants to create new card customers, they may seek to lower the barriers to entry and flatten the learning curve. To some degree, The Break scratches the latter itch but not the former.The traditional auction method, which is crowded and competitive, may not be the best mechanism to convert this audience. Could vaulted base or other inexpensive cards be used as rewards or incentive for prop bets placed on a specific player? Could cards be staked in peer to peer wagering? We're not advocating for those potentially scary, but potentially effective bridges between the two categories, just musing on the possibilities.

Pure collectors may be disturbed to learn of the strengthening ties between sports gambling and the Hobby. In a category already polluted in some circles with short-term thinking and action, the introduction of an audience accustomed to near instant results will do little to assuage those concerns.  To the extent sportsbooks are successful in cross-selling cards and creating new card customers, the schism between speculator and collector could be set to grow. Based on the cards selling on DraftKings to date, it appears that as always, vintage will remain the purist's safe haven.

Not much betting left to do on ole Cannonball Titcomb, is there?

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