Despite ending the quarter with a nominal net loss of US$142.6 million (£114.04m), hard-charging US sportsbook DraftKings has delivered a spectacular Q1 that has delighted markets and maintained its leading position atop the iGaming money tree.
The sleight of loss–considerably less, or is that more (?) than the loss of US$397.1 million (£317.57m) in Q1 last year–, was posted despite the Massachusetts-based fantasy sports operator generating record-breaking revenue of US$1.175 billion (£943.7m) — a massive 53 percent, year-on-year, uplift.
And it led, unsurprisingly, to DraftKings–currently operating in half the USA’s 50 states and Canada’s Ontario province–significantly increasing its full-year guidance across both revenue and adjusted EBITDA.
Projecting growth of some 30 percent, 2024 revenue should now amount up to US$5 billion (£3.99bn), instead of the previous estimate of a maximum US$4.9 billion (£3.91bn), says the US online sports betting leader.
And adjusted EBITDA is now forecast to be a minimum US$460 million (£367.89m), compared to a previous estimate of at least US$410 million (£327.9m).
Performance
“[Our] performance in the first quarter of 2024 was outstanding,” affirmed DraftKings Co-founder and CEO Jason Robins, when unveiling the results last week.
“It reflects healthy revenue growth and a scaled, fixed-cost structure that positions us to drive rapidly improving Adjusted EBITDA.
“We successfully launched our online sportsbook in Vermont and North Carolina with highly efficient customer acquisition.
“Looking ahead, we remain committed to maximizing shareholder value through continued innovation, operational excellence and disciplined capital allocation.”
And in what many iGaming observers laud as a cheeky cock-a-snoop at new “noisy” sportsbook competitors Disney and PENN Entertainment-backed ESPN BET, DraftKings struck a multi-year partnership with Barstool Sports during the quarter.
Difficult to forget that only last year PENN sold back its controlling interest in Barstool to the book’s controversial founder Dave Portnoy for a peppercorn dollar.
Money Train
Other factors boosting the DraftKings money train included a surge of new players drawn to the premium online brand (average Monthly Unique Payers, MUPs, grew 23 percent, year-on-year, to 3.4 million); market expansion and a higher hold percentage.
DraftKings’s US$750 million (£599.8m) acquisition of lottery app Jackpocket, furthermore, is expected to generate an additional US$340 million (£271.91m) of annual income.
Nevertheless all is not plain sailing in the DraftKings metaverse.
The quarter saw more than its fair share of corporate churn as the company battled criticism of its Responsible Gambling protocols.
In what could be interpreted as a sideways shuffle, Jason Park was appointed Chief Transformation Officer, being replaced as CFO by Alan Ellingson.
And in a patent move to address its fair betting issues, Lori Kalani was installed as DraftKings’ first-ever Chief Transformation Officer.
Watch this space!
