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What DraftKings’ Latest Earnings Report Shows It Can Learn From Starbucks

Written By Derek Helling | Updated:
Jason Robins, Chief Executive Officer Of DraftKings

DraftKings co-founder and CEO Jason Robins would do well to take one approach as far as his leadership goes; whatever current Starbucks CEO Laxman Narasimhan does, do the exact opposite. In DraftKings’ most recent earnings call, Robins voiced some platitudes toward that end, at the very least.

While DraftKings’ first-quarter numbers for 2024 were an altogether different story than Starbucks’ Q2 figures (Starbucks divides its quarters up on a fiscal year, not calendar year, basis), the fallout of Starbucks’ regression bears some intrigue for online gambling companies like DraftKings. A deeper look at DraftKings’ numbers and Robins’ comments shows how vital the lessons are.

Everything is looking good on DraftKings’ bottom line

If you look at DraftKings’ first-quarter 2024 earnings with zero context you’d be a happy investor. Total revenue was up 53% compared to Q1 2023. The total of monthly unique players on DraftKings’ various online gambling products grew by 23% in the same comparison.

As a result, DraftKings has escalated its revenue guidance for 2024, forecasting a 36% year-over-year increase when the annual cycle closes. However, it’s important to note where this growth came from. DraftKings’ press release1 points to several factors:

  • customer engagement
  • efficient acquisition of new customers
  • expansion of DraftKings Sportsbook into new markets
  • higher sports betting win by percentage
  • promotional reinvestment into online gambling products

Those terms add up to an elaborate way to rephrase one sentence; during the quarter, more people gave DraftKings their money and then played in such a way that DraftKings got to keep it. If you’ve been reading and waiting for a shoe to drop, the laces are loosening.

Robins directs the conversation to what actually matters

During the call on Friday, Robins took answers from the media about the company’s earnings for the first quarter. One of those questions centered on DraftKings’ share of the US online casino market and competition gaining some momentum. Robins brought up several points in his response.

“Yes. I mean I think what you’re seeing, which probably isn’t surprising, it’s the same dynamic emerging in iGaming as in OSB (Online Sports Betting),” Robins said. “So on the one hand, I think that, that gives a lot of sort of clarity in terms of investors of what long-term market structure could look like, which is good. And I think for us, we just continue to focus on trying to deliver the best customer experience. And I think if we do that, we’ll maximize our long-term share of the pie.

But I do want to note that share is not the only metric. Obviously, everybody follows that, and that’s a lot of questions. But we’re focused on being the most profitable company in the space and making the most money. So I think that’s ultimately how we define share of the space, not GGR (Gross Gaming Revenue) share. Obviously, GGR shares a helpful metric to look at, but bottom line share is the most important thing.”

In this statement, Robins points to a simple fact that many investors and players in the online gambling space may struggle to understand; gross gaming revenue is not actual revenue, much less profit, for DraftKings. In most other industries, GGR would be called sales.

Most of GGR is simply money that DraftKings gets to hold and look at for a brief period. To Robins’ point, that’s where DraftKings’ actual revenue and any profit comes from. However, it’s a poor evaluator of DraftKings’ fiscal health.

Another point Robins brings up is where the comparison to Starbucks comes in most poignantly. While Robins has said the right words, DraftKings’ long-term competitiveness in online casino play will indicate whether he has taken the right actions.

Starbucks’ comparatively horrible quarter

Narasimhan’s tenure at the helm of Starbucks has seen the greatest labor unrest in the company’s history. Rather than address the concerns of Starbucks’ workforce, though, Narasimhan has thrown on an apron at a local store2 and posed for a photo.

That unrest in Starbucks’ labor force has now bore itself out in the company’s numbers. For the first time since the beginning of the COVID-19 pandemic, there was an annual decline in same-store sales. Global revenues dropped by almost 2%3 as well.

Narasimhan’s response so far has been to double-down4 on exactly what has produced the company’s problems in the first place. For example, amid the National Labor Relations Board finding that Starbucks has violated labor laws, Narasimhan is pushing workers to further cut down on customer wait times and introduce more menu items that will constipate the production process.

This drew an indirect rebuke from former Starbucks CEO Howard Schultz. While Schultz didn’t have a sterling record for labor relations either, his words suggest what Narasimhan and Robins both should prioritize.

Robins and Schultz are (almost) saying the right things

In a now-much publicized LinkedIn post5, Schultz delivered some zingers that seem to criticize Narasimhan’s misguided strategy. For example, Schultz said that “the stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data but in the stores.”

Schultz rightly calls upon what made Starbucks the powerhouse brand it is. It’s not getting a coffee-flavored milkshake with 47 alterations in half a minute from obviously stressed staff. People have been willing to pay inflated prices for Starbucks’ mediocre-at-best beverages because the brand has been a status symbol and Starbucks’ cafés served as a third place they wanted to meet at.

During DraftKings’ earnings call, Robins also highlighted the importance of customer experience for the company’s long-term health. However, neither of these leaders talked about what drives the customer experience.

DraftKings’ staff is the driver of product improvements and operational efficiencies that Robins referred to as behind the company’s growth. They create new features and games that will differentiate DraftKings Casino for players.

If DraftKings continues to post strong quarterly earnings, it won’t be because its app is designed to glean as much GGR as possible from players. It will be because DraftKings’ staff have committed to making DraftKings Casino the easiest to use and most fun to play.


  1. DraftKings Reports First Quarter Revenue Growth Of 53% To $1,175 Million; Raises 2024 Revenue Guidance Midpoint To $4.9 Billion And 2024 Adjusted EBITDA Guidance Midpoint To $500 Million ↩︎
  2. Starbucks’ CEO moonlighted as a barista. He burned his hand on a sandwich and had an egg bite explode in front of a customer — and now he’s making 5 key changes. ↩︎
  3. Starbucks Reports Q2 Fiscal 2024 Results ↩︎
  4. Starbucks just had a ‘disappointing’ quarter. Here’s how it plans to turn things around. ↩︎
  5. Howard Schultz LinkedIn post ↩︎
Photo by AP Photo/Charles Krupa
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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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