DraftKings Fails Despite World Cup Boost

According to DraftKings’ report, revenue fell by 5% year-on-year to $1.44 billion, while adjusted EBITDA dropped from $300.6 million to $114.6 million. This was due to a combination of favourable sports outcomes for customers and a significant increase in promotional spending. Although the number of monthly unique players increased by 9% to 4.4 million and the amount wagered increased by 15%, average revenue per user decreased by 13% to $132 as players pocketed their winnings.

However, CEO Jason Robins remains unfazed, framing the quarter as strong and pivoting to the future. He is betting big on the nationwide rollout of the "Super App," which features prediction markets. “Predictions are already growing faster than we anticipated,” he noted, expressing confidence that this new vertical will be a key driver in the upcoming NFL season and beyond.

Sportsbook: Revenue down 10.6% to $891.9 million, despite a 14.5% increase in customer spending.

iGaming: The bright spot, up 7.5% to $461.9 million, and now accounting for 32% of total revenue.

The financial squeeze was exacerbated by rising operating costs, particularly in sales and marketing, resulting in an operating loss of $68.2 million. Despite the challenging quarter and a net loss of $46.5 million for the first half of the year, DraftKings is maintaining firm on its full-year guidance of $6.5-$6.9 billion in revenue and $700-$900 million in adjusted EBITDA.

Regulus Partners notes that DraftKings and FanDuel are neck and neck in the US market. While DraftKings showed stronger handle growth, FanDuel still leads in iGaming. However, Regulus strikes a cautionary note, suggesting that as US sportsbook expansion cools, prediction markets may be a "short-term distraction" rather than a long-term goldmine, and hinting that future growth may need to come from international markets.