DraftKings

In two thousand and twelve, Jason Robins and Matthew Kalish noticed sports fans bet constantly. Not in casinos, but in bars with friends. Fantasy sports had legitimized betting conversations. They built a platform for daily fantasy sports. You could enter a tournament for that day's games for ten or fifty dollars, pick a lineup, and compete for cash prizes. Daily fantasy operated in a legal gray zone. Sports betting was mostly illegal. But fantasy leagues had a court exemption for games of skill. DraftKings leaned into this. The platform rewarded research, pattern recognition, and strategic lineup construction. The pitch was that skill mattered. While regulators caught up, DraftKings moved fast. Revenue exploded. Millions of players entered tournaments. The user economics worked regardless. A new player might deposit twenty dollars and lose it. But DraftKings made money from the rake—ten percent of the prize pool. Ten thousand players, twenty dollars each: ninety percent to winners, ten percent to DraftKings.