Episode 104: Testing DraftKings and Fanatics PM Products

[Music] Hello and welcome to Zero Latency, the podcast from Iles and Crouchick Gaming. I'm your host Brad Allen and this episode is brought to you by Optimoove, the creator of positionalist marketing and the number one player engagement solution for eye gaming and sports betting operators. Thank you Optimoove for sponsoring the show. I'm joined today by James Neely or Jimmy Neely to his friends, King of Product Testing at Iles and Crouchick. And we're going to talk about prediction markets and we're starting to see some product rollout now, chiefly fanatics and draft kings is what we're going to talk about today. And Jimmy put together some work in our last sports market monitor, comparing these to each other to Calchi and to OSB apps to get a kind of idea where these new products are and to start I think a question we get a lot is who's going to win in this space and nobody really knows yet because nothing's live or everything's been live two weeks but hopefully this will point us in the right direction. So Jimmy let's start with fanatics. This one was out a week to before draft kings. So what are your initial impressions upon launch? I would say the first thing to take away from all of this is that this is such early days that it's hard to get a complete grasp on what these apps will end up looking like in the end. Right. So we're talking about fanatics markets and we're talking about DK predictions today. There's also a fan deal prediction here and we weren't able to get full testing done on that one yet because that literally just launched when we were trying to do that report. But these are in such infant stages that the gap between them and Calchi is how the size of the grand candy is pointed. It's hard to get a sense of how many markets they will end up having. It's hard to get a sense of what's going to be able to be live predicted on and what won't. It's just difficult at this juncture. But from what we do have, it is clear that fanatics markets is a step ahead of what DK predictions is at this moment. The one area where DK predictions does a little bit better than fanatics is in terms of general UI. So when you land on that app, there's a very clear journey to find your markets and actually interact with the product and make any predictions that you want to make. It's very clear. They lean more into OSB type lensing. They use OSB odds plus 120 minus 110 as opposed to trading lens, 60 cents, 40 cents. So it's much more of a softer landing for OSB betters on tracking. But that's about the only area where we found DK to be better than fanatics. Fanatics stumbles a little bit with the multiple side scrolls on their home page with with plikative markets, which kind of made it a little confusing which one you were supposed to tap to make a prediction on. So that was a little confusing. Everything else was done quite well on fanatics. They have the things you would expect from a PM at the line graph to show how the odds have moved over time. A live trading book to see how individual users are shifting their positions over time on the market. There was a decent amount of cultural and political topics to dive into on fanatics. Again, I don't know where near what you would see on call sheet, but a decent amount, the Grammys, the Oscars, some political election type markets you could bet on, some things related to the S&P 500. So they did well there. They have a live button. So you can live predict on fanatics the scale to which you could do that is a little odd at this point, but you can do that. That is built into the infrastructure of the app. And then most importantly, and probably the biggest issue these OSB apps are going to have as they try to launch their PM versions is with the wallet. And you know, accounts. I think a lot of users are going to come over from their OSB side and think that their OSB account and their and the money they have on their OSB app is just going to inherently carry over to their prediction market app. And fanatics has solved for this. They have fanatics one which is a shared account across all of their spaces. So when you log into fanatics markets, you instantly have access to the money you had in the OSB app. It's just shared across. You don't even have to do anything. It's automatically synced. DraftKings does not do this. So they are two separate accounts. The money you have on the OSB side of things stays on the OSB side. And when you log into DraftKings predictions, that is a new wallet. That is a new wallet. You have to fund. You cannot use the credit card on it. It has to be online banking or a debit. And so it's just a new thing that the users will have to set up fund and get rolling with the app. So that is a very clear distinction there between the two and a big step forward, I would say for fanatics. And I'm sure DraftKings have a reason for that. I mean, they know more than anyone. They must be. The power of like the funded wallet. That's the DFS to sports betting. That's how they got this big lead in the first place in the sports betting market. So I'm sure HPS probably regulatory legal. They think there's a big risk of them fanatics does because fanatics were quite punchy with some of the states they launched in as well. They went into some sports betting states. So maybe just fanatics are taking a risky approach in general, but it definitely gives them a leg up early in terms of product. And I assume people just crossing over and ease of sign up and ease of funding there. And you're checking away a hurdle there, you know, and on those early stages of a user going to that app, you get rid of a hurdle. It's a big deal. Yeah. So for example, how did the fanatics trading app compare to its own sports betting app? Was it was it like a similar feel similar vibe? Could you have told that these are made by the same people? Or was it entirely different? Good question. Design wise, they look very similar. It's again, it is still a little tough to get a sense of this because it is so early. There's not a lot on these apps, right? Like we're talking first week or two that we that these apps had launched. We're going into them. So the number of markets is really low. That inherently makes the app look a bit emptier when you look at say fanatics is OSB app versus the the markets app, regardless of the features in the UI, if you just land on those two apps and did a side-by-side comparison, you would think that the market's app is just empty and actually isn't live yet, because there just isn't a lot on it. That's just inherent from the early long days. But the overall design looks the same. You know, colors are the same. Layout is approximately the same. You would not necessarily look at it too and go like, oh, this one was done by a different company. They do look similar. There is that shared design philosophy. There is that shared sort of architecture of where the account page is. What the bottom-nav is doing. What's some of the side scrolling, sort of tabs are doing. All of that looks and feels the same. The difference just comes in with the actual content itself, which is just there's a start difference there. Yeah, I know draftings, for example, they told investors we will be live, but in December. So I think it's probably they're like, let's just get this out. We've said, this is our deadline. Let's get this out. We'll work it out later. And especially given the kind of stock market pressure they were under. I'm just trying to look up their share price now, but I think they had a little bump even the day they launched. Yeah, there was a little spike around that launch. So yeah, I think it was important for them to get it out. How do they both compare to Calche? Is it just the number of markets currently that's different? Or you know, you kind of said that Calche was ahead. And then we're supposed to drive in that. Yeah, so there's a few things here. The first of all, Calche just has a much wider user base. So there's more predicting going on. There are more users interacting on that site, not just with the predictions themselves, but with each other. That's one big difference between the two is Calche has almost a social media ecosystem within the app itself, where users can talk to each other, predict with each other. There's almost like a social media feed type of feature that they have at least called ideas. And so there's a lot more to do from a user perspective to interact others and learn more about what they want to do and what they want to predict on and what site they want to take and what kind of position they want to take on whatever the market may be. You know, Venezuela or an upcoming election or a midterm, there's a lot more you can do there with that. There's also a lot more that Calche has in terms of overall topics, you know, they lean into much more of the political cultural space. They obviously have sports predictions you can make. The political and cultural things that you can do on Calche are just so vastly ahead of what we saw on fanatics and draft kings that it's almost unfair to compare the two. So in terms of the feature set, in terms of the extra bells and whistles, and then just in terms of the depth of the number of users themselves, all of that leads to a feeling of Calche being a lived in experienced product, whereas all that we see on fanatics and draft kings very much feels like almost not even beta, it feels more alpha. It feels more like this has not been a lived in space. They're still trying to figure things out, but content isn't quite there yet. But again, it is such early days that that is to be accepted. Head in twice. Make sure to stop by Optimoode stand in Hall 4. Discover how operators are using Optimoode's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bed slips and create engaging gamified experiences. Stop by for live demos, real-world use cases and hands-on insights on how to maximize player lifetime value. One thing I was interested about, I assume you don't have a deep reservoir of trading background, Jimmy. Is it easy to come on to come onto one of these platforms, whether it's Calche or one of the sportsbook East Star ones? Is it easy to come on and trade and like being reduced to trading? Is it easy to pick up for? Because obviously most people sign up to these are going to be people who just want to have bet on something and actually should be chill done for. Notice you keep saying trading like you've been media trained by Calche and these sports to explore there. I have to pause for about a half second or a second and be like, am I saying, "Dad, are you in my same position?" "No." "Please don't, no." Yeah, so it's easy to trade basically or learn how to trade or is it the same? It's a good question. It definitely took me a good hour to get my feet and feel comfortable using these apps and somewhat know what I'm doing. I wouldn't even say I know what I'm doing at this point on these apps, but I'm still learning about them and looking at them from the product lines. But what I would say to kind of differentiate the three, Calche is much more surefooted and confident in what they're doing. They're also a bit more playful when you go to help sections or you're trying to learn more about what terminology means. They're a little bit more playful in their language, which I think is a good thing. You would want this new-ish space that is drawing in a lot of new eyeballs and new users to be a bit more playful and not feel so rigid. Calche is doing good job that, especially in their responsible trading adjacent section. They're quite good at making that feel a little fun and a little bit inviting to try to get people to learn and then ultimately predict. Phenatics goes a little bit more. Stern might be the wrong word, but they're just kind of embracing the fact that they want their prediction app to be separate from the OSB app fanatically. This is a prediction app. That's what you're getting here. Do not expect us to hold your hand in terms of if you're an OSB better and you're coming over here, we're not going to be using OSB language. There is no option, sorry, sorry, yeah, actually, there is no option on phonetics to switch between OSB apps, sorry, OSB odds and prediction odds. They just use the sense terminology and that's all you really get. So you have to learn what that means for your position when you're buying whatever state you are buying in that particular topic. Draft Kings, meanwhile, is trying to soften that landing. They're clearly trying to bring in your OSB better and they are giving it a soft landing. They're willing to hold your hand. They introduce you with OSB odds and then they give you that option to switch to trading if you want later on. You can ultimately switch that up and they also they explicitly say how many shares you have in a given position, which is not actually what phonetics does. Phenetics just says what your position was. How much you actually bought into a certain side, yes or no on whatever the question is. And then you have to kind of do the math yourself of, okay, this was my position and this is what I stand to win. How many approximate shares do I have? Draft Kings will explicitly say it when you look at your my prediction section, it'll say, oh, you have six shares in your stake on this term election or you have four shares. So there's definitely a difference between the issues there in terms of how they are hand holding or not hand holding the user into this experience. And then I think one of the last key questions I had for you was obviously one of the big questions that again we asked a lot is substitution. Is it kind of a realization? Is there a risk that people, if they're both in the same market, that people do prediction markets instead and everyone you speak to so far has no chance. Just based on the breadth of the OSB offering SGPs, Ben Sula's kind of thing. Do you think there is any chance? It's so hard to tell honestly. It's actually tough for me to make a prediction here on this or to kind of take either side of it. I could see the case for this cannibalizing because the entire point of predictions is for it to be sports betting plus everything else. So there's absolutely a chance here that prediction markets end up gaining such a following, gaining such a user base that that is just where OSB goes. What I would say is based on what we've seen on these very again very, very early days, I'm not entirely convinced that is going to be there's going to be a massive cannibalization here. I think when you look at fanatics is OSB at versus fanatics markets and then when you also do the same thing, draft kings is OSB app to draft kings predictions. There's such a golfing quality between the two that I can't quite see it myself right now. If there were to be an app that could make this an easy sort of transition and maybe not necessarily cannibalize their own user base, it's probably draft kings only because they have kind of made it so that there isn't there's a bit of a blurring of lines there between the two because like I said, there's there's a much more of a softer landing on prediction side of their product now OSB odds bit more handholding, more limited markets, more of a focus on sports markets than political and cultural stuff. So I think that would be the one that that could handle that the best, but again, it's just so tough to tell in these early days. Anything else I should be able to do about Jimmy. I think at this juncture, we're really excited to see what Fandall predicts ends up looking like. We're going to do a bit more testing on that in the coming weeks. And I think really a few months from now, we're really excited to see where these prediction market apps, the OSB prediction market apps really excited to see what they do in terms of the markets they offer themselves because again, it is so far leaning towards more sports, not as much political and cultural stuff. And they're going to need to do that if they want to compete with call sheet, the breadth and depth of things that you can predict on that you can find information on. It just vastly outnumberes what we're seeing on the OSB versions at this point. So in these next few months, you know, market availability, market depth, that's going to be a very big deal. Yeah, and I assume at some point there's going to be a big report here and comparing all of these versus polymarket versus Gemini and Coinbase and Robinhood. And that will tell us a lot more about who will win in this base because product is product as you know, well, is probably the biggest biggest factor or one of the biggest two anyway. Right, Jimmy, thank you very much for joining me and sharing always the most as ever and to our listeners, if you would like to get hold of Arles and Crouchek research, get hold of this slide that Jimmy put together in the sports market monitor along with I think 50 other eight slides about market shares, product quality, gossip, M&A speculation, all that good stuff. Drop me a line of LinkedIn and I'll point you in the right direction. Thank you all for listening. [Music]