DraftKings Targets Growth with Prediction-Based Bets
Boston-based DraftKings plans to introduce a prediction-focused betting product in the US, targeting primarily states where online betting is not yet legalized. CEO Jason Robins highlighted a “huge incremental opportunity” in the prediction bets market, which operates separately from the company’s main sports wagering offerings.
Market Context and Strategy
Robins noted that exchange-based betting accounts for only about 5% of the market in the UK, suggesting significant room for growth in the US. The concern about cannibalizing existing sports betting revenue is minimal, as he stated,
“The cannibalization isn’t a huge concern. We haven’t seen that happen.”
Recent Financial Performance
Despite this optimism, DraftKings recently reported results below analysts’ expectations. For the most recent quarter, the company reported revenue of $1.14 billion, short of the $1.22 billion forecast. Adjusted EBITDA showed a loss of $126 million, which was worse than the anticipated $77.8 million loss. Paying monthly customers numbered 3.6 million, trailing the projected 3.9 million.
Revised Outlook
Following these results, DraftKings lowered its full-year forecast. The company now expects revenue between $5.9 billion and $6.1 billion, down from the previous guidance of $6.2 billion to $6.4 billion.
Author’s Summary
DraftKings is expanding into prediction bets to tap new markets, balancing cautious optimism with recent financial setbacks and adjusted revenue forecasts.