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Not only do online casinos make more money per capita than sportsbooks, but that revenue is also considerably steadier. DraftKings is learning this the hard way, having informed investors that it is revising its revenue guidance for the full calendar year downward by about $400 million after experiencing the downside of sports betting volatility.
DraftKings pointed to what it called “the most customer-friendly stretch of NFL sport outcomes in our history” as part of the rationale behind the downgrade. Even with one of the largest market shares in regulated sports betting in the NFL’s home markets, the volatility of sports outcomes proved significant for DraftKings.
Revenue from online casino play is tremendously less volatile. That’s why players should expect industry forces like DraftKings to support online casino expansion as a rule.
DraftKings previews Q4 in updated guidance
At the end of Q2 2024, DraftKings updated its guidance for revenue for the full calendar year to $6.6 billion. That guidance is now at $6.2 billion after the company’s investor call for Q3.
DraftKings points to one factor behind that decline. In its investor presentation, DraftKings assigned a loss of $250 million to “customer-friendly sport outcomes in Q4 2024.”
A graph in the presentation shows that for the month of October 2024 and the first four days of November 2024, DraftKings’ hold percentage (the portion of all the money bet that DraftKings held onto versus paying out to customers) for NFL wagers spent just one week in the 10% – 15% range.
Comparatively, DraftKings’ NFL hold sat in that range for 17 weeks for the month of September in 2024, 2023, and 2022. To further emphasize the poor results for DraftKings Sportsbook during the five-week period between Oct.1 and Nov. 4, 2024, DraftKings says that one of those weeks saw hold sit in the negative 10% -15% range.
While DraftKings is surely looking at its NFL pricing and trading models to reduce this liability in the future, there’s only so much those models can be improved. To an extent, this is the nature of the sports betting beast and why it’s such a poor one compared to online casino play.
Online casino gaming: the superior vertical
While DraftKings does not separate out its publicly reported gaming revenue by vertical, other data show the value of online casino play for companies like DraftKings. That value is not only in terms of reliability but also return on investment.
Online casino win in Michigan for DraftKings Casino from September 2024, 2023, and 2022 demonstrates this. Those totals were:
- September 2024 — $38.2 million
- September 2023 — $37.1 million
- September 2022 — $21.9 million
In Pennsylvania, DraftKings operates its online casino platform under the license of Hollywood Penn National with other brands, but the data still show value in that gaming.
- September 2024 — $83.7 million
- September 2023 — $75 million
- September 2022 — $61 million
Comparing those data with the sports betting win totals for DraftKings in Michigan and Hollywood Meadows in Pennsylvania (DraftKings contracts with a different land-based facility for sports betting in Pennsylvania) in the same months shows the contrast.
- Michigan September 2024 — $17.4 million
- Michigan September 2023 — $11.7 million
- Michigan September 2022 — $10.5 million
- Pennsylvania September 2024 — $26.8 million
- Pennsylvania September 2023 — $20 million
- Pennsylvania September 2022 — $17 million
While DraftKings saw consistent growth in both verticals over the time periods and in the states in question, iGaming simply outperformed sports wagering. The reasons why are not complicated.
Online casino revenue is predictable
The logic behind the diminished volatility of online casino win compared to sports wagering is simple. Online casino games have fixed odds and the games have mostly fixed house edges, so casinos know exactly how much of the money bet on the games they are going to collect.
With sports bets, factors like in-game injuries and in-game adjustments can skew sportsbooks’ models. Even with live dealer online casino games with some human influence like blackjack and craps, the probabilities of most results remain mostly fixed.
In short, with online casino games, very little is left to chance or human influence for operators like DraftKings. The only variables are whether people play them and if so, how much they stake to their plays.
Maximizing the value of online casino games therefore requires a company like DraftKings to ensure an optimal number of regular players. Expansion of access is one of the simplest paths toward that end, however challenging it currently proves.
Online casino expansion at a standstill in the US
As much as DraftKings would love to see more people in the US have access to its online casino platforms, (DraftKings Casino, Golden Nugget Casino, and Jackpocket Casino), that is beyond its control to a large extent. In most US jurisdictions where regulated online casino play is not present currently, significant legislation would be necessary to expand the scope of regulated gaming.
State legislatures were mostly silent on that issue in 2024 and currently, 2025 isn’t looking significantly more promising. Because of the comparatively less volatile nature of online casino win, though, DraftKings is likely to support movement toward that end in any US jurisdiction as long as that legislation would not exclude DraftKings or prove unnecessarily onerous.
Online casino games might not get the flashy press of sports bets, but they are tremendously more reliable and valuable for companies like DraftKings compared with those sports wagers. If the map for regulated online casino play ever expands far enough, such companies might someday simply characterize sports betting as a loss leader.
