DraftKings Gains Players as It Adds Jurisdictions and Features

Digital sports entertainment and gaming company DraftKings is gaining players as well as more spending from its existing players as it expands to new jurisdictions and adds new features.

“DraftKings had a very strong third quarter,” DraftKings Co-founder, CEO and Chairman of the Board Jason Robins said Friday (Nov. 4) in an earnings press release. “Our team continued to drive top-line growth through highly effective customer engagement and compelling product and technology enhancements while remaining focused on our path to profitability.”

Despite the growth and gains, investors are concerned about projected losses of more than $500 million continuing into next year. As a result, DraftKings’ stock was down 25% Friday and has plunged 75% over the past year.

While the rate of user growth was up, it rose slower than analysts had expected, a factor that has added to investors’ existing concerns about the company’s progress toward becoming profitable, Bloomberg reported Friday.

DraftKings reported in the release that its revenue increased 136% year over year during the quarter ended Sept. 30, exceeding the guidance it had provided in August.

The company attributed the gains to “robust” customer acquisition and retention and the launch of its products in new jurisdictions over the past year, according to the release.

The number of monthly unique payers (MUPs) rose 22% year over year, and the average revenue per MUP leapt 114%, the release stated.

The recent additions to the company’s mobile sports betting footprint include the September launch of its online Sportsbook in Kansas and the May launch of its Sportsbook and iGaming products in Ontario, Canada, per the release.

“We had an excellent launch in Kansas on Sept. 1 with more rapid customer acquisition on a population-adjusted basis than we have with any other state launch,” Robins said Friday during DraftKings’ quarterly earnings call.

During the quarter, DraftKings also began a multi-year collaboration with Amazon that includes being a sponsor of Prime Video’s Thursday Night Football.

Looking ahead, DraftKings raised its fiscal year 2022 revenue guidance and announced a 2023 guidance that projects revenue to grow about 33% year over year.

“As we have stated previously, we expect that the fourth quarter of 2023 — only one year away from now — will be our first quarter with positive adjusted EBITDA,” Robins said during the call.

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