While DraftKings is banking on strong online sports betting performances to give it a successful 2023, its online casino success could be the reason the company is poised to deliver on its expectations. During DraftKings’ recent earnings call for the second quarter of this year, DraftKings emphasized its leadership in real-money online casino play in its four active markets.
DraftKings saw its Q2 revenue grow by almost 90% compared to the past comparable term and asserted its strategy to retain its leading position through the rest of the year. If those strategies replicate the past quarter’s success, DraftKings might achieve actual overall profitability in 2024.
DraftKings says, ‘We’re number one’
According to DraftKings’ investor presentation for Q2 2023, the online gambling company “maintained [its] #1 iGaming GGR (Gross Gaming Revenue) share in Q2 2023 at 27%).” DraftKings offers online casino play in Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia.
In this context, gross gaming revenue means the amount of money that DraftKings wins from players on both DraftKings Casino and Golden Nugget Casino in those five states. DraftKings says its share of 27% of all the GGR in those five states combined is greater than any other individual licensee’s.
DraftKings adds that leading share grew by 6% compared to Q2 2022 as well. As a result, DraftKings reported $875 million in total revenue for Q2 2023, an improvement of 88% compared to Q2 2022. Following that accounting, DraftKings further updated its guidance for all of 2023.
DraftKings now says its midpoint for the whole year in terms of revenue from all sources is $3.5 billion. That represents a 10% increase from the forecast from DraftKings’ Q1 2023 update. The presentation lists the launch of online sports betting in Kentucky as part of the reason for that improvement.
However, that isn’t the sum total of DraftKings’ plan to move further toward breaking even on its bottom line.
Online casino strategy paramount to DraftKings achieving profitability
Overall, DraftKings has made significant progress toward breaking even. For the second quarter of 2023, its net loss came to $77.2 million. That’s almost 65% better than the $217.1 million loss DraftKings took in Q2 2022. As anyone can see, though, the company still has work to do in order to be truly sustainably operating.
Still, DraftKings wasn’t an outlier and like most of its competition reported a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the recent quarter. That came to just under $73 million. DraftKings’ optimistic appraisal of its present and future is partially due to its work on its online casino products.
Among the reasons for that optimism is the forthcoming launch of Golden Nugget Online Casino in Pennsylvania. DraftKings says it is also close to completing migration of the Golden Nugget platform onto its own technology stack.
DraftKings credits its exclusive, proprietary game titles and jackpot offerings as another reason for continued success. During Friday morning’s earnings call, CEO Jason Robins said DraftKings is seeing between 50% and 60% crossover from sportsbook in its online casino markets.
The upcoming jam-packed sports calendar in the United States could drive that conversion for the rest of 2023. Should that stay consistent or even grow, DraftKings might not just report a happier EBITDA in 2024. An actual net profit could be within reach.