DraftKings was the No. 1 most downloaded sportsbook during Super Bowl LVII.
That’s according to the sports betting company’s latest earnings call, where DraftKings’ Chief Executive Officer and Co-founder Jason Robins told investors that his gambling platform continues to find “big wins” on the product front.
“Customers love the parlay product,” DraftKing’s Chief Financial Officer Jason Park said on the call. “It helps with retention as it keeps getting stronger. [Our approach is to] start with the customer, find the product that the customer wants and ideally construct those products in a way that benefits those customers and also creates attractive economics for the company.”
“We see many years of innovation [ahead] that will drive growth in our consumer wallet share,” added Robins.
Football fans bet a record $16 billion on Super Bowl LVII, the first to be held in a state where sports gambling is legal.
Company executives noted that compared to the Super Bowl, while the recent World Cup was “great,” it only represented a “low single digits percentage of revenue.”
Nearly one in five (19%) of American adults bet on sports in the past year.
Read More: DraftKings Bets on Instant Payments to Drive Growth of Sports Betting
“We have retained our customers very well,” said Park. “Over a 4-year period from customer acquisition, our average annual retention rate has been 87%. The dynamic is such that we have seen the biggest churn in the first year, and then once a customer stays with us for a year they are very likely to stay with us for multiple years.”
Per its newly released fourth quarter 2022 results, DraftKings ended the year with 2.6 million monthly users, a 31% increase compared to the year prior.
“When a customer has stayed with us, that customer’s level of play has typically increased due to more frequent engagement and higher average bet size,” Park told investors. “Customers are trying new bet types, new sports and new games. They also tend to naturally grow their discretionary entertainment budget as they age and their income increases. Additionally, customers who churn are more likely to be casual, and retained customers tend to be more frequent players.”
While DraftKings paid out $2.68 million to one bettor who made a hefty wager on the Chiefs’ victory, the sportsbook still enjoyed big wins for the big game.
The speed of payments is crucial in the gambling industry, but it can also increase the risk of fraud.
PYMNTS research found that 45% of respondents who had experienced account takeovers or social engineering fraud were victimized while using faster payment options
DraftKing’s stock price is up double digits on the news of its Q4 earnings as of writing, powered by positive results and a focus on efficiency that was underscored by executives on the earnings call.
DraftKings’ CFO said the company found more than $100 million of cost efficiencies, while CEO Robins told investors, “We improved retention of top talent, fixed internal processes that had not scaled, and streamlined organizational structures … We established measurement systems to optimize internal efficiencies and prove that more can be done with the same resources, demonstrating that decisions previously thought of as trade-offs don’t always have to be.”
“At DraftKings, we talk about ‘Ands,’” the CEO added. “’ Ands’ are things that great companies can effectively do simultaneously, while weaker companies struggle to make progress in one area without harming progress in another. Examples include Revenue Growth and Cost Control and Win Now and Invest in Foundational Areas to Win Long-Term.”
With 26 states plus Washington, D.C., now with legalized online sportsbooks representing around 132 million Americans, the sports betting landscape offers gamblers more scale and scope than ever before. When money is both the product and the experience, it is important for industry players to drive wins by reducing payout frictions and developing innovative new products.
As the gambling industry grows, cashless payments are set to play a more prominent role.
PYMNTS research in the “Money Mobility Tracker” finds that consumers want to receive their gambling winnings through various payment methods, with instant payments among the most desired — but many companies are not meeting this need.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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