DraftKings CEO Jason Robins said that the legalization and regulation of sports betting in US states would take the company to “hyper growth” in 2021.
Q3 Revenue Jumps by 98% Year on Year
The adoption of sports betting legislation and regulation by US states would bring DraftKings from “high growth to hyper growth,” the operator’s CEO Jason Robins said in an interview with FoxBusiness journalist Maria Bartiromo on Thursday.
DraftKings expects more than 40% growth excluding new sports betting measures in the US in 2021. With $133 million in revenue generated in the third quarter, up one million from analysts’ expectations, the company reported a 98% increase compared to last year’s third quarter revenue of $67 million. DraftKings announced a $348 million loss in Q3.
Raising its fiscal year guidance for 2020 to $540 million to $560 million, from a first estimated $500 million to $540 million. Its 2021 revenue guidance equals a 45% growth year on year, the company said, with a range of $750 million to $850 million.
In November, the sports betting mobile app reported a 64% rise in new users for Q3 year on year, with “on average, more than a million monthly unique paying customers engaged with DraftKings each month,” according to the Boston-based company.
Q3 Results Boosted by the Resumption of Major Sports Events
The shutdown of most competitions and events during the Covid-19 pandemic limited wagering activities and significantly impacted gambling and sports betting companies. DraftKings suffered from important losses from the end of March to June.
The sportsbook company detailed a $161.4 million loss in the second quarter, 55 cents per share, while turnover rose by 24% year on year to $70.9 million.
Following a break during the pandemic, “the resumption of major sports such as the NBA, MLB and the NHL in the third quarter, as well as the start of the NFL season” boosted growth for the third quarter through a surge in player engagement, Mr. Robins told investors last month.
DraftKings hopes that “new states [adopt sports betting] legislation and regulatory frameworks to bring this activity into a legal, safe environment,” Mr. Robins shared with FoxBusiness.
DKNG Stock Soars
The recent sports betting bills adopted by a number of US states have allowed the company to launch online sports betting, online casino, and iGaming operations across the nation.
Various news outlets stated that New York may soon authorize sports betting, boosting DraftKings’ stock up 5% on December 9. As investors took their profits, the DKNG stock closed at $48.94 with a 3.8% loss that day. This is a 357% jump year to date.
The company’s stock has been trending as Louisiana, South Dakota and Maryland recently voted in favor of sports betting, bringing the total of US states where the activity is legal to 24.
For New Jersey, where DraftKings has been “operating in the longest”, Mr. Robins reported a triple digits development rate year on year. He added that growth is “by no means slowing down even in the states that have launched.”
On October 30, DraftKings announced the official launch of its mobile sportsbook app in Tennessee, the ninth state to offer the company’s sports wagering product.
A partnership agreement between the operator and the Mashantucket Pequot Tribal Nation‘s Foxwood Resorts Casino in Connecticut was finalized on December 7, pending the soon legalization of sports wagering in the state.