Michael Jordan joins advisory board of sports betting service DraftKings
Michael Jordan, the six-time NBA champ and one of the most popular professional athletes of all time, is taking a role at the sports betting service DraftKings. The former basketball star will also buy shares of the company, though DraftKings, through a spokesperson, declined to comment on how much Jordan is investing in the company.
Jordan is also the current chairman and owner of the Charlotte Hornets franchise.
Shares of DraftKings rose just 3.5% on the news. But that small increase is on top of the huge leap that shares of the company — which went public in April — have had this year. The stock has risen 260% in 2020, propelled by a captive online audience during the pandemic and the company's ability to weather the suspension of professional sports earlier this year.
DraftKings' revenue rose 7% in the first six months of the year compared with the first half of 2019, to nearly $190 million. The company, however, has struggled to find bottom-line success. Losses this year have nearly tripled to nearly $240 million in the first six months of 2020.
In a statement on Wednesday, DraftKings said that Jordan, in his new role, will provide strategic advice to the company's board of directors.
"Michael Jordan is among the most important figures in sports and culture, who forever redefined the modern athlete and entrepreneur," said Jason Robins, DraftKings co-founder and CEO. "The strategic counsel and business acumen Michael brings to our board is invaluable, and I am excited to have him join our team."
It was once taboo for athletes and pro sports teams to have any connection to gambling. But in the past few years, the NBA has moved closer to embracing sports betting. Five years ago, Michael Jordan and fellow NBA owners Mark Cuban and Ted Leonsis invested in Sportradar, which provides sports stats and data for gambling services, including DraftKings. At the time, NBA commissioner Adam Silver said that betting makes fans more engaged in the games, similar to the effect of fantasy sports.
Jordan, who earlier this year was dubbed "basketball's most famous bettor" by CBS Sports, has his own controversial history with gambling. Richard Esquinas, a frequent golfing partner of Jordan's, claimed in his 1993 book "Michael and Me: Our Gambling Addiction... My Cry for Help" that Jordan owed him $1.25 million from golf bets. Jordan denied the claims. CBS Sports reported that Jordan eventually paid Esquinas $300,000 in a later settlement. The NBA investigated the gambling claims at the time and ultimately cleared Jordan of any wrongdoing, CBS Sports reported.
Jordan, through a business manager, declined to comment to CBS MoneyWatch for this story.
Keith Whyte, who is the executive director of the National Council on Public Gambling, said DraftKings has in the past few years embraced a message of responsible gambling. Nonetheless, Whyte says access to sports betting has been shown to increase the severity of gambling problems in the general public.
"There is a lot more they could do and should do to better protect their players and the general public, but they are doing the basics — which is good," said Whyte. "When public figures like Michael Jordan embrace sports gambling it creates risks, but it also provides an opportunity. Michael Jordan is well placed to talk about the dangers of gambling and embrace solutions to minimize the harm it can do to people's lives."
