Genius Sports and DraftKings agreed on an expanded, multi-year sports data supplier agreement Thursday in a comprehensive deal that grants DraftKings access to Genius Sports’ full portfolio of global sports data and content, including its crown jewel: a complete suite of NFL-related products.
The portfolio includes Genius’ official NFL data sports betting feed, as well as real-time play-by-play statistics and the league’s proprietary Next Gen Stats (NGS) data. The partnership could set the market for the cost of official NFL data to U.S. sportsbooks, as Genius embarks on a roadshow to enlist sportsbook clients before the start of the NFL regular season on Sept. 9. The deal was announced Thursday morning, hours before the kickoff of the 2021 Pro Football Hall of Fame Game between the Dallas Cowboys and Pittsburgh Steelers, which marks the start of the NFL preseason.
In April, Genius Sports secured a landmark multi-year deal with the NFL that granted the data provider exclusive rights to the global distribution of the league’s sports betting feed. The deal carried a hefty price tag. The four-year deal is worth as much as $1 billion and gave the NFL a 5% equity stake in the U.K.-based data company. Under the deal, the NFL received 22.5 million warrants, half of which vested when Genius went public earlier this spring. Genius beat out main rival Sportradar, which previously maintained an exclusive data partnership with the NFL.
“We have invested heavily to ensure that our official data is the fastest, richest, and most accurate available, and are committed to continued innovation,” said Christopher Halpin, NFL chief strategy & growth officer, in a statement. “With Genius, DraftKings, and the NFL working together on official sports data, we will help create a highly engaging, secure, and sustainable sports betting environment for fans to enjoy.”
Data implications for other major sports
Shortly after finalizing approximately $100 billion in media deals this spring, the NFL named Caesars Entertainment, DraftKings, and FanDuel as its first exclusive sports betting partners. As part of the agreement, the three companies will have the “exclusive ability to leverage NFL marks” for both retail and online sports betting, according to the NFL. All three companies will also use the NFL’s official data feed, the league announced in the April deal.
DraftKings, however, is the first of the three companies to announce a separate deal with Genius. Beyond football, DraftKings will expand its data portfolio, giving customers access to official data from other prominent leagues, such as the English Premier League, Liga MX, and NASCAR, all of which partner with Genius. In total, DraftKings will gain access to Genius Sports’ proprietary official data and live video feeds from over 170,000 events per year, the companies said in the statement.
DraftKings partners with NFL data provider Genius Sports to fuel sports bets https://t.co/RpCnb1HqJP
— CNBC (@CNBC) August 5, 2021
DraftKings will also deploy a host of custom bets, make-your-own bets, and single-game parlays through Genius Sports’ BetBuilder product. FanDuel, DraftKings’ arch rival, has received high marks from customers on its same-game parlay offering, which allows bettors to combine multiple legs from one game, such as Thursday’s Cowboys-Steelers contest.
“Our customers are at the forefront of all we do and we are always working to better their experience and our products,” DraftKings Chief Business Officer Ezra Kucharz said in the statement. “The mutually beneficial terms of this agreement allow us to leverage Genius’ technology for years to come. We are excited to expand on the capabilities of our products and provide new and exciting features for our customers like single-game parlays, while having confidence in the integrity of the data we utilize to fuel our offerings.”
The cost of official data
Given the significant cost of Genius’ partnership with the NFL, there is concern within the sportsbook community that the costs will be passed down to individual books. During the negotiating process, the going rate for the NFL’s official data package through Genius is around 4% of a sportsbook’s pre-game gross gaming revenue (GGR) for NFL wagers and 6% of a book’s in-game GGR, multiple sources told Sports Handle. The rates represent an increase of about 4x from Sportradar’s NFL pricing levels under the previous deal.
After losing out to Genius on the NFL deal, Sportradar Chief Commercial Officer Eduard Blonk penned a letter to sportsbook clients, asserting that the economics of the negotiations “became irrational” and would have required the company to increase rates significantly for customers. With the increased rates, the costs almost certainly would have filtered down to individual sportsbooks and bettors, an industry source told Sports Handle.
Genius Sports did not comment on rate negotiations with sportsbooks, as they pertain to official data. Any time there are considerable price increases for official data, though, the resulting spike in prices will be met with a certain amount of resistance from the industry, a data expert noted.
For now, it is unclear how many sportsbooks have purchased the NFL’s official data feed since Genius was awarded the contract in April. There are strong indications that Genius could add a bevy of new sportsbook partners in the coming weeks as the regular season approaches.
.@GeniusSports fundamental strategy has always been about bringing value to our partners through the strength of our products, built on emerging technologies & always powered by the official data partnerships we have with sports leagues – none more important than the NFL.
— Mark Locke (@MarkLockeGenius) August 5, 2021
The partnership between DraftKings and Genius also has major implications for the mobile sports betting landscape in New York. The deal was announced ahead of the New York Gaming Commission’s Aug. 9 deadline for operators to submit license applications to be eligible to participate in the state’s competitive bidding process for mobile sports wagering. The state will award contracts to a minimum of two mobile sports wagering platform providers and a minimum of four mobile sports wagering operators. While DraftKings is expected to submit an application, the company has not disclosed if it will apply as a platform provider.
When the commission drafted a set of proposed mobile sports betting regulations last month, the rules included a provision that requires sportsbooks to use official data from a sports governing body, with certain exceptions. The provision could incentivize the purchase of official data by top sportsbooks over the next several weeks in attempts to put forth a more attractive bid, another source told Sports Handle.
Official data from a sports governing body shall be used to determine all sports wagers, unless a casino sports
wagering licensee demonstrates to the satisfaction of the commission that wagers for such wager type may be determined objectively, reliably, accurately and timely by an alternative data source. See Racing, Pari-Mutuel Wagering and Breeding Law section 1367(14).
–New York Mobile Sports Betting Regulations, Draft Pre-Proposal Regulation Part 5329
DraftKings’ shares rose 1.7% to $49.50 in midday trading on Thursday. The announcement came one day before DraftKings will release its 2021 second-quarter earnings on Friday morning.
Shares in Genius, meanwhile, surged more than 5% to a session high of $16.71, giving the company a market capitalization of $3.2 billion. Genius was valued at $1.5 billion when the company announced a deal to go public last October with dMY Technology Group Inc II, a special-purpose acquisition company.
The transformative deal with DraftKings has larger ramifications for in-stadium branding activations among NFL clubs, with venue highlights and player insights available for bettors inside the venues. Top sportsbooks have yet to offer props on a running back’s top speed during a game-winning touchdown, which is tracked through the NFL’s Next Gen Stats platform.
Since winning the NFL contract, Genius has explored the integration of Next Gen Stats for prop formation as a way of enabling sportsbook clients to offer creative microbets for customers. Those microbets have not been approved on the state level, though Colorado allowed books to offer wagers on exit velocity during last month’s MLB Home Run Derby.
Given DraftKings’ cache across the industry, the partnership represents a historic accomplishment for Genius Sports, CEO Mark Locke emphasized.
“This partnership reinforces our commitment to official sports data and demonstrates its intrinsic value in helping our sportsbook partners stand out from the competition,” Locke said. “Our data, trading, streaming and marketing services deliver a complete set of sportsbook solutions that are backed by the largest leagues in world sports, including the NFL.”