DraftKings Bullish on Future, Even as Stock Price Tumbles
DraftKings held its 2022 Investor Draft Day presentation on Thursday, with DraftKings CEO Jason Robins and CFO Jason Park highlighting the company’s progress.
Focus on DraftKings’ Growth
Here are some of the key takeaways from Thursday’s presentation:
DraftKings noted how the overall sports betting and iGaming business is larger than originally predicted, from $67 billion to $80 billion.
The company also reiterated how it’s acquiring customers faster and more efficiently than before with 2021 sales and marketing spend guided by this data. During the sportsbook’s Arizona launch, DraftKings acquired 3.5% of the adult population in its first two quarters with online sports betting compared to 1.3% in the first two quarters with online sports betting in New Jersey.
DraftKings also believes it will be a contribution profit positive for all states where they are currently live. In years one, two and three, customer retention was 83%, 88% and 86% with year one to year two and Year 1 to Year 3 revenue per retained player increasing 39% and 49%. If no new states are added in the current fiscal year, DraftKings believes it will be contribution profit for 2022.
Five states are currently contribution positive, including New Jersey, New Hampshire, Indiana, Illinois and West Virginia. But the contribution positive does not take into account the marketing dollars necessary to acquire customers.
Currently, 44% of the adult population is in states where sports betting is legal. DraftKings has a 25% share, which is the second-highest behind FanDuel. According to DraftKings, they, along with FanDuel and BetMGM own nearly 80% of the mobile gaming market.
The company also increased its long-term adjusted EBITDA outlook from $1.7 billion to $2.1 billion.
Still, the news didn’t do anything to ease the concerns of investors. Following the conference, the stock went down 9% to $21.08.
DraftKings No Longer Offering Games in Russia, Belarus
On Thursday, DraftKings also announced it will not be offering betting on sports leagues and events in Russia and Belarus. This means no KHL betting on the platform.
DraftKings went on to reiterate it has no direct commercial relationship with any Russian or Belarusian league, team or sports organization.
Be first to get our exclusive sports offers!
Join today to stay up to date on your states gambling news and offers.