Legendary NBA star Michael Jordan has been integrated by US sports betting operator DraftKings to its staff as a special advisor and shareholder, with the extent of the shareholding in the company not being disclosed so far.
DraftKings confirmed Wednesday that Jordan had
“agreed to take an equity stake in DraftKings in exchange for providing strategic guidance and advice to the board of directors on key business initiatives.”
The former Chicago Bulls player will support the operator by providing guidance on “company strategy, product development, inclusion, equity and ownership, marketing activities and other key initiatives.”
After DraftKings made the announcement, the company’s share price soared 15%, although its price later dropped to less than 4% at close of business on Tuesday. The fantasy sports operator’s market capitalization rose about $ 800 million to $ 13.1 billion, according to Refinitiv data.
Jordan, who has not yet commented on this deal, is currently president of Hornets Sports and Entertainment, the group that owns the Charlotte Hornets property.
Jordan owner and gambler
The NBA Hall of Famer was praised by DraftKings CEO Jason Robins, who called him “one of the most important figures in sports and culture.” He indicated that Jordan will bring his “invaluable” knowledge to the table.
Jordan’s involvement in the gambling world has a history as revealed in the ESPN documentary The Last Dance aired recently.
The former professional gamer was focused on the gambling business after joining Sportradar, the sports data company, as a partner.
Despite being seen as a gambler, Jordan became president of Hornets Sports & Entertainment and took control of the Charlotte Hornets team. The dual role of basketball team owner and betting operator might have been difficult for someone else to assimilate. But in the case of Jordan, this did not become a scandal due to the conflict of interest.
In fact, the NBA in a statement said it had no problem with the owners of affiliated teams venturing into sports betting and the fantasy sports business that is “subject to the safeguards required by league rules to avoid real or perceived conflicts of interest “.
In several states in the United States where DraftKings operates it is prohibited for team owners to have an ‘ownership interest’ in the betting operating companies. Although Jordan’s stake in DraftKings is so small that he does not need to obtain a license issued by state gambling regulators.
The “big disruptor” in the betting industry
As a precedent, there is the case of New Jersey that prohibited the Golden Nugget casino bookmaker from accepting bets on NBA games. The owner of the casino, Tilman Fertitta, was once the owner of the Houston Rockets. However, this restriction was lifted in 2019 and it was only established that the Nugget could not bet solely on the Rockets’ home team games.
Speaking to CNBC last week, Jason Robins said he expects his company to become a “major disruptor” in the gambling industry, akin to the impact that Google, Apple and Amazon had on the tech industry.
DraftKings’ sports betting operation currently spans nine states across the country and it expects three more, including Tennessee, Michigan and Virginia, to join the group before the end of the year.
Ahead of the NFL season next week, the company launched its ‘Reignmakers’ marketing campaign in which influencers will compete against US carriers for a weekly prize of $ 10,000.