The company raised its full-year revenue forecast as it continued to sign up new bettors despite decades-high US inflation squeezing consumers budgets. The shares gained in early trading.
The company said that DraftKings saw revenue for the year in the range of $2.08 billion to $2.18 billion, up from $2.055 billion to $2.175 billion. The guidance now includes Golden Nugget Online Gaming Inc., which the company bought in May, as well as new markets like Ontario, Canada.
DraftKings is competing with FanDuel, a division of Irish bookmaker Flutter Entertainment Plc, and other sportsbooks to sign up bettors as more states legalize online sports gambling. Hundreds of millions of dollars have been lost as the companies have poured money into advertising and promotional offers. The strategy may be paying off, according to a series of forecast boosts for DraftKings.
Jason Robins, DraftKings Chief Executive Officer Jason Robins, said in a statement that customer engagement remains strong and there is no real impact of broader macroeconomic pressures.
The shares rose by 3.4% at 8: 37 a.m. in New York, compared to an earlier gain of as much as 17%. The stock has fallen 40% this year through Thursday's close, compared to a 13% drop in the S&P 500.
Revenues rose to $466 million in the second quarter, a 57% increase from the year-earlier period. It beat the average analyst expectation of $438 million.
DraftKings has 1.5 million monthly unique paying customers, up 30% from a year ago. The analysts expectations of 1.7 million were not met, according to estimates by Bloomberg, but DraftKings said its bettors are spending more money.
Its average monthly revenue per player rose to $103 in the quarter, up from $80 a year ago. The company has introduced more parlays when bettors can combine multiple wagers into a single bet. Sportsbooks are focused on promoting riskier bets because they are more profitable.
DraftKings said there was a smaller loss for the year in terms of earnings before interest, taxes, depreciation and amortization.
A souring economy could threaten the growth of sports betting if consumers start to cut their entertainment spending. In June, several states, including Pennsylvania and New Jersey, saw declines in gross gaming revenue in the year over year, according to Stephen Glagola, an analyst at Cowen Co.
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