After reporting third-quarter results that are considered positive – a 39% increase in revenue to $1.095 billion – DraftKings’ CEO Jason Robins is confident about October’s prospects. This is despite a football season that, so far, hasn’t been too friendly to sportsbooks across the country.
Bettors, particularly during football season, are going to keep wagering.
“We have seen a little bit of evidence that handle can go up or down based on whether customers are winning or not,” Robins said during Friday’s investor call. “But it’s actually not really that big a number if it is an impact at all.
“I think much more, what we see, is that people don’t need to deposit as much but they tend to keep their betting levels at a pretty similar level. And on the margins, you see some incremental betting, but for the most part people just continue to kind of bet if they’ve been betting at this point.”
The $1.095 billion total was an increase of $306 million. Also for the quarter, monthly unique payers increased to 3.6 million, representing an increase of 55% compared to the third quarter of 2023. The average revenue per monthly unique payers was $103 in 3Q24, a 10% decrease year-over-year.
DraftKings attributed the decrease to average revenue per monthly unique payers for Jackpocket customers. Excluding the acquisition of Jackpocket, average revenue per monthly unique payers increased approximately 8% compared to the 3Q23.
Robins noted that an increase of 500 basis points in parlays was primarily attributable to DraftKings’ products.
“We’ve introduced a lot of new features,” Robins said. “We have live SGP (single-game player) markets across the NFL, NBA, and other sports now. So, a lot of it is just product and product availability. I think we’ve really increased our abilities around merchandising and creating interesting player props and combinations of player props into pre-pack parlays. And I think that’s been a factor. It’s been a number of things, our marketing approach, it’s been a lot of different moving forward to that objective that have driven it.”
Regarding new opportunities, Robins says DraftKings will consider non-sports betting markets in the future, particularly during presidential elections.
“There was a lot of attention on it during the last few weeks, and I do think there could be a place for it outside of elections, but that’s really where the interest seems to be now from a customer-demand side,” Robins said. “It’s definitely something we’re looking at in advance of the next president election, and potentially it will be an opportunity to look at something sooner.”
Robins noted that DraftKings will monitor the progress of sports betting initiatives in states where it is not yet legal, but that it was hard to predict if and when states such as Texas and California would consider legalization. He was encouraged by recent news that Florida was considering an expansion of sports betting, as reported by CNBC’s Contessa Brewer.
“We really have a ton of respect for Hard Rock and the Seminoles, and Jim Allen (chairman of Hard Rock International and CEO of Seminole Gaming) has done a fantastic job,” Robins said.
“Obviously, Florida is a big state and we’d be very excited if there was a path to be able to offer product to customers there, but it’s not up to us. We’ll have to see what they want to do and how the discussions progress.”
Robins noted the company is open to expanding into international markets.
“We definitely don’t feel like it’s a need, it’s more of an opportunistic thing at this point,” he said.
Jefferies analyst David Katz termed DraftKings’ 3Q24 report “a largely in-line quarter.”
“However, unfavorable October hold affected results in a 4Q cut (which were indicated in some public results), while the rest of 4Q should be normal,” Katz wrote in a statement. “DraftKings also provided in-line initial 2025 review guidance of $6.2 billion to $6.6 billion (+31% Y/Y) and reiterated $900 million-$1 billion of FY25 adjusted EBITDA. We view the 4Q cut in the context of a noisy 2H24, while the reiteration of 2025 should be the focus.”
