Gaming operator DraftKings reported $133 million in third-quarter 2020 revenue Friday. Their quarterly earnings report also increased revenue guidance for the current fiscal year and 2021.
This is the first full quarter that the company has spent as publicly traded, following the April IPO.
DraftKings Q3 Reports
DraftKings Sportsbook capitalized on the return of major North American sports in July, nearly doubling their revenue from Q3 2019 of $67 million. The company revised the 2020 revenue projections, previously at $500 to $540 million, to $540 to $600 million. They also introduced 2021 revenue projections of $750 to $850 million.
“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, generated tremendous customer engagement,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board, in a statement.
“In addition to our year-over-year pro forma revenue growth of 42%, DraftKings recorded an increase in monthly unique payers of 64% to over 1 million, demonstrating the effectiveness of our data-driven sales and marketing approach. Our product offerings and scalable platform provide a distinctive and personalized experience for customers across the ten states where we operate mobile sports betting today, and we look forward to entering additional jurisdictions at the earliest opportunity.”
While DraftKings has built their brand on daily fantasy and sports betting in NJ, more of the revenue comes from online casinos.
On top of the sports betting world… for now
The company took the top spot in gross gaming revenue for iGaming in the very competitive New Jersey market, while placing second in Pennsylvania and West Virginia. They are planning to expand the DraftKings casino to Michigan when that market launches in early 2021.
DraftKings is now available in 10 states with 20 percent of the US population in the footprint, with three more states approving sports betting via referendum earlier this month. During the presentation, the company mentioned the possibility to join a newly privatized market in the province of Ontario for iGaming and sports betting.
While the company has shown revenue growth, there is one notable concern. In the report, the company listed $203 million in sales and marketing expenses for the quarter, nearly four times higher than last year’s $58 million for Q3.
DraftKings has spent significant money to create partnerships with major league franchises, athletes, and organizations to draw business. The company also ran major promotions for the opening weekends of the NFL season.
Q4 will be very interesting for DraftKings and other sports betting companies. The prolonged NBA and NHL seasons in the summer will prevent most games from happening this fall. College football has seen multiple games moved and teams opt-out of playing, while the NFL has largely avoided major disruptions from the coronavirus.
The Ivy League’s announcement Thursday to not play a winter schedule might not be the only one from mid-majors in college basketball. Despite the lack of a regular schedule, New Jersey announced a record in October with over $800 million in handle Friday.