SPORTS BETTING

US – DraftKings raises its 2023 guidance following 84 per cent jump in revenues

By Phil - 9 May 2023

DraftKings has reported revenue of $770m, for the three months ended March 31, an increase of 84 per cent compared to $417m during the same period in 2022 driven primarily by efficient acquisition of new customers, product innovation driving higher hold percentage, decreased promotional intensity in more mature states, and continued healthy customer retention.

DraftKings is raising its fiscal year 2023 revenue guidance to a range of $3.135bn to $3.235bn from the range of $2.85bn to $3.05bn, which the Company previously announced on February 16, 2023. The company’s updated 2023 revenue guidance range equates to year-over-year growth of 40 per cent to 44 per cent.

Jason Robins, DraftKings’ Chief Executive Officer and Co-founder, said: “DraftKings’ first quarter performance – 84 per cent year-over-year revenue growth and share gains underpinned by a relentless focus on operational efficiency – demonstrates that this is a company positioned for sustained success. We delivered highly successful online sportsbook launches in Ohio and our home state of Massachusetts and continued to create meaningful product differentiation driven by in-house innovations. We acquired customers faster and more efficiently and, importantly, saw healthy retention across cohorts. Looking at the remainder of 2023, I am confident DraftKings is well-positioned to achieve profitability on an Adjusted EBITDA basis in the near-term and deliver long-term value for our shareholders.”

“Strong execution across the organization is showing up in our results,” added Jason Park, DraftKings’ Chief Financial Officer. “Revenue grew at a healthy rate due to core drivers around customer acquisition, retention and monetization, including decreased promotional intensity and higher structural hold. In addition, our efficiency efforts produced clear results as demonstrated by significant year-over-year increases in gross margin and Adjusted EBITDA. Therefore, we are increasing the midpoint of our fiscal year 2023 revenue guidance to $3.185bn from $2.95bn and improving the midpoint of our fiscal year 2023 Adjusted EBITDA guidance to ($315)m from ($400)m.”

Monthly Unique Payers (MUPs) increased to 2.8 million average monthly unique paying customers in the first quarter of 2023, representing an increase of 39 per cent compared to the first quarter of 2022. This increase reflects strong unique payer retention and acquisition across DraftKings’ Sportsbook and iGaming products as well as the expansion of its Sportsbook and iGaming products into new jurisdictions.

Average Revenue per MUP was $92 in the first quarter of 2023, representing a 35 per cent increase compared to the same period in 2022. This increase was primarily due to improvement in the Company’s structural sportsbook hold rate and reduced promotional intensity.

DraftKings is live with mobile sports betting in 21 states that collectively represent approximately 44% of the US population following the launch of its online Sportsbook product in Massachusetts on March 10, 2023.

DraftKings is also live with iGaming in five states, representing approximately 11 per cent of the US population.

DraftKings is live with its Sportsbook and iGaming products in Ontario, Canada, which represents approximately 40 per cent of Canada’s population.

Kentucky and Puerto Rico have authorized mobile sports betting and collectively represent approximately two per cent of the US population. DraftKings expects to launch its Sportsbook product in these jurisdictions pending licensure and regulatory approvals.

In 2023, 12 states that collectively represent approximately 24 per cent of the US population have either introduced legislation to legalize mobile sports betting or introduced bills that may result in sports wagering referendums during an upcoming election. In addition, five states that collectively represent approximately 14 per cent of the US population have either introduced legislation to legalize iGaming or introduced a bill that may result in an iGaming referendum during an upcoming election.