DraftKings Expects Online Gaming to Reach $30 Billion by 2028

Online sports betting and iGaming in the United States will be a $30 billion total addressable market (TAM) in 2028, up from $20 billion this year, according to DraftKings.

That projection includes only the existing states, as the legalization of sports betting in additional states would boost that market higher, DraftKings CEO and Co-founder Jason Robins said in prepared remarks delivered Tuesday (Nov. 14) during the fantasy sports contest and sports betting provider’s 2023 Investor Day event.

“This is an important concept for today. Any additional state legalization would add significant revenue growth and additional long-term Adjusted EBITDA, and improve our long-term Adjusted EBITDA margins,” Robins said in the prepared remarks.

Further online sports betting and iGaming legalization in the U.S. provides the potential for up to an additional $6.2 billion of Adjusted EBITDA, Robins added.

The states in which these activities are already legal have proven to be markets that are larger and faster growing than the DraftKings had anticipated, according to a presentation released in conjunction with the Investor Day event.

“Put simply, online gaming in the U.S. is growing very rapidly,” Robins said in his prepared remarks. “In the states where we are live, and also including Ontario, gross gaming revenue is expected to grow more than 50% year-over-year in 2023 and reach $20 billion.”

The number of states where online gaming is legal is expected to continue to grow, Robins said. He pointed out that the states that were the first to legalize online gaming are growing, and many other states have launched these activities in just the last year or two.

As an example of one of the older states, Robins cited New Jersey. That state launched online sports betting more than 5 years ago and iGaming about 10 years ago. Still, New Jersey’s gross gaming revenue is expected to grow by about 25% this year.

“The percentage of adults who are participating in the online gaming category is increasing, and existing participants are engaging at a higher level over time,” Robins said in the prepared remarks.

PYMNTS Intelligence has found that the legalization of online sportsbooks has ushered the industry into the mainstream market. That trend will only continue as more jurisdictions legalize online sportsbooks, according to the “Disbursements Satisfaction Report 2023: Instant Payouts Reach an Inflection Point,” a PYMNTS and Ingo Money collaboration.