November brought a more favourable atmosphere for iGaming companies in the stock market. 

After a challenging September and October, several companies experienced significant boosts in stock value. 

US operator DraftKings took the lead among gambling stocks, GAN soared following an acquisition deal, and Acroud stood out by defying prevailing market trends.


DraftKings emerged as the top performer among operators, witnessing a 38.8% increase in stock value, from $27.6 on 31 October to $38.3 on 30 November.

Over the past six months, DraftKings’ stock rose by 63.7%, marking a stellar run for the company.

Additionally, its year-to-date stock gain stands at a staggering 236.3%.

In Q3 2023, DraftKings generated a 57% year-on-year revenue increase to $790m in Q3 2023 – and overtook FanDuel as the US online gambling market leader by GGR.

November also saw DraftKings hold its virtual investor day and share additional insight. 

CEO Jason Robins said he believes the company had secured the top spot due to a variety of factors, the most important being the development of a market-leading product.

He emphasised the importance of having top-notch technology and affirmed that the operator wouldn’t ease off on development in this area.

He described the DraftKings product as “extremely strong” and said the firm’s competitive differentiation advantage was both “real and sustainable”.

DraftKings revised its full-year revenue guidance to a range of $3.67bn to $3.72bn, up from the earlier guidance of $3.46bn to $3.54bn. 

Looking ahead, the company projected 2024 revenue between $4.5bn and $4.8bn, with anticipated growth in subsequent years.

DraftKings’ long-term forecast also showed promising figures, expecting revenue in the mid-$5bn range for 2025 and a further surge to $7.1bn in 2028.

After a strong showing in Q3, alongside an optimistic outlook for 2024 and beyond, several analysts think DraftKing’s stock is primed for sustained expansion over the long run, despite appearing reasonably priced in the short term.


In November, GAN took the lead as the best-performing stock in the supplier category, bouncing back from a tough October

The company’s stock value surged by 67.1% throughout the month, a significant turnaround from its position at $0.88 on 31 October to a closing value of $1.47 on 30 November.

GAN’s climb began after 7 November when the supplier confirmed the long-speculated acquisition by Japanese gaming giant Sega Sammy Creation.

This acquisition, at $1.97 per share in cash, reflects a substantial 121% premium over the stock’s closing price on 7 November.

Following this announcement, heavy trading of GAN stock ensued, catapulting its value to $1.66 on 9 November.

GAN interim CEO and chairman Seamus McGill commented: “After a thoughtful review of value creation opportunities available to us, we are pleased to have reached this agreement with SSC. 

“Market share concentration in the US B2C space, a slower than expected adoption of regulated online gaming in the US, along with changes to key customer contracts make the near-term operating environment challenging without ample capital resources. 

“Sega Sammy has those resources and GAN is a strategic complement to their existing gaming portfolio. We believe this all-cash offer, at a substantial premium to recent trading prices, is the value-maximising path for our shareholders.”

However, the acquisition isn’t set to be finalised until December 2024. 


Stockholm-listed Acroud stood out among the affiliates on our watchlist last month. 

While other affiliates experienced share losses—even the widely favoured Better Collective, which dipped nearly 12%—Acroud managed to achieve a 5.4% gain. 

Its value rose from SEK 1.66 on 31 October to SEK 1.75 on 30 November.

Acroud released its Q3 2023 results in November, showcasing both positive and challenging aspects.

The company generated a 48% year-on-year revenue increase to Є9.9m. However, EBITDA (excluding one-off items) dropped by 21% year-on-year to Є1.2m.

On a brighter note, Acroud successfully brought in 72,270 New Depositing Customers (NDCs) for its partners, marking a 114% growth compared to Q3 2022.

CEO Robert Andersson acknowledged the difficulties faced during Q3, citing organisational changes that impacted the company’s performance. 

He highlighted the restructuring of finance departments and a shift to in-house technology adoption to cut costs and streamline operations.

Andersson mentioned that while the results were disappointing, they were anticipated. 

He attributed some of the impact to sports results, specifically noting a negative influence in September due to the success of many favorites. However, he emphasised that underlying Key Performance Indicators (KPIs) continue to exhibit strength.

He expressed confidence that the changes implemented by the company have now settled in Q3, leading to a more stable outlook. 

“Contradictory to the seasons, Acroud is now heading towards brighter times in the last quarter of the year,” Anderson said.  

DraftKings will not get complacent after achieving a leadership position in the US online sports betting and iGaming market.

That was the key message from CEO Jason Robins yesterday during the company’s 2023 virtual investor day event.

The event was held one month after DraftKings was crowned as America’s online gambling market leader by Eilers & Krejcik Gaming (EKG), overtaking long-term incumbent FanDuel.

We’re number one

“We remain laser focused on executing and winning in the US online gaming industry,” said Robins during his opening remarks.

He said the company had secured top spot due to a variety of factors, the most important being the development of a market-leading product.

“We’re not satisfied just because we reached number one,” said Robins, who believes DraftKings’ share can continue to grow in the future as the overall US market expands.  

“We’re very excited about continuing to do the things that got us here and will continue to maintain and extend our lead,” he added.

Preference for product

Robins believes it is critical to have the best technology and insisted the operator would not slow down development in this department.

He described the DraftKings product as “extremely strong” and said the firm’s competitive differentiation advantage was both “real and sustainable”.

DraftKings has owned its own technology since Q3 2021, having vertically integrated a proprietary sports betting engine during the same quarter.

This has enabled the business to roll out upgrades like single wallet functionality, Robins said. A scalable regulatory platform has also allowed the brand to enter new states at pace.

“We plan to continue to innovate at a rapid velocity,” said Robins. “We offer products that are highly differentiated with the only limit being our own imaginations,” he added.

DraftKings currently employs 1,500 product engineers who will deliver approximately 13,000 independent product updates this year alone.

The latest product initiative has seen DraftKings improve its parlay betting potential with the imminent launch of new Progressive Parlays.

Previous guidance smashed

At its previous investor day in March 2022, DraftKings set out a long-term target to achieve online sports betting GGR share of somewhere between 20% and 30%.

On a trailing three-month basis, however, it has outperformed that target and currently boasts a 39% handle share in the US and a 37% GGR share.

This outperformance has helped establish DraftKings as the new US market leader and is not just limited to sports betting.

For iGaming, DraftKings boasts a GGR share of 27% on a trailing three-month basis, against a previously communicated long-term target of between 20% and 25%.

Increased market potential

Looking at the wider US online gambling market, DraftKings said states were growing faster than anticipated.

The operator therefore expects the total addressable market (TAM) in the US to increase from $20bn this year to approximately $30bn in 2028.

Crucially, this forecast excludes new state launches. It includes only the existing states that were used to inform DraftKings’ financial guidance for full-year 2024.

The operator recently raised full-year 2024 guidance to revenue of between $4.5bn and $4.8bn and adjusted EBITDA of between $350m and $450m.

Looking longer-term, DraftKings now forecasts adjusted EBITDA of $1.4bn in 2026 and $2.1bn in 2028. Those figures are again based on existing states, as well as the assumption that DraftKings maintains a 30% GGR share of the overall market.

Future regulation upside

Robins did not comment on the costs associated with new state launches, but said that any additional state legalisation would add “significant upside” through revenue growth and additional long-term adjusted EBITDA.

“In fact, there’s potential for up to an additional $6.2bn of annual adjusted EBITDA from further OSB and iGaming legalisation in the US,” he told investors.

DraftKings previously forecast that 65% of the US population would require access to regulated sports betting for the company to achieve adjusted EBITDA of $2.1bn, as well as 30% of the population to have access to iGaming.

However, the company now believes it can reach that target based on existing states only.

“Any further legalisation would provide enormous upside beyond that,” added Robbins.

DraftKings has announced a new bet builder feature that allows pay-outs even if not all legs are achieved. 

DraftKings unveiled “Progressive Parlays” at its Tuesday investor day, although gave no indication as to the product’s launch date. 

The Progressive Parlays are set to share many characteristics with Same Game Parlays, a similar multi-stage betting product that has become increasingly popular with US sports bettors. 

Traditionally, these parlays have required all legs of the bet to win to be paid out. The crucial difference with Progressive Parlays is that only a partial victory can still result in a payout. 

Conversely, the increased number of potential legs means that players have the possibility of receiving a larger pay outs in the event that all picks go their way. 

DraftKings CEO Jason Robins said: “We’re excited about our Progressive Parlay offering and its potential to generate higher parlay mix and leg count, and thus higher hold percentage, as well as being a great win with customers who will be able to win money on their parlays even if they don’t hit every leg of their bet.

“If you love parlays, but you don’t like the all or nothing nature of it and you’d like to be able to have some other options, this allows you to win if you don’t hit every single leg,” he added. 

DraftKings said the new feature will allow players to create bets consisting of between three and 12 legs or selections.

DraftKings filed a trademark for Progressive Parlays two weeks ago.


Best form of flattery 

The company described itself as the first major US sportsbook operator to offer the feature. However, some commentators have pointed out that it shares similarities with PrizePicks’ ‘flex plays’ feature.

DraftKings alluded to this in its investor presentation, highlighting one of the feature’s selling points is that this version counts as “regulated as sports betting”.

The operator has previously alluded to certain games being offered by DFS or pick’em competitors, in particular PrizePicks and UnderDog, as being effectively unregulated or illegal sports betting.

The investor day comes during a period of smooth sailing for DraftKings, having posted several good news updates only recently.

These include a rising GGR market share in the US, a stock up 54% over the past six months and a full-year guidance raise in the face of higher than expected revenues. 

Major investors cash in

Famed investor Cathie Wood and her Ark Invest investment management firm has opted to continue its pattern of selling DraftKings stock as it continues to climb to record highs. 

The fund sold 274,849 shares of stock for a closing price of $35.53, amounting to $9.8m. This is in addition to the $30.5m worth of shares already sold this month.

Previously, Ark unloaded $14.1m of DraftKings stock in October and $48.4m in September.

The investment fund however continues to be among the largest shareholders of the US sports betting operator.

DraftKings chief executive Jason Robins has pinpointed iGaming as a potential driving force for growth after a dynamic Q3. 

Topline numbers

DraftKings reported a 57% increase in revenue to $790m in the three-month period ending 30 September. 

Meanwhile, the business reported negative $153m in EBITDA for the quarter, a year-on-year improvement, but down from the positive $73m sum recorded in Q2. 

A full revenue and EBITDA breakdown can be found here.

News nugget 

Robins said he was “bullish” on the prospects of iGaming in the US for the year ahead. 

“iGaming is probably the one piece of our business I point to that is under talked about,” he said.

The DraftKings chief noted online casino launches have eased the pressure on reacquiring customers, because “such a large percentage of our share comes from cross sell.”

The business launched Golden Nugget Online Casino in Pennsylvania in August, the first state where the operator’s iGaming brand launched on the DraftKings platform. 

Robins said this migration would be rolled out to all four of the remaining iGaming states in the year ahead. 

“Over the next couple of quarters, we are going to migrate pretty much every state for Golden Nugget Online Gaming. So really, I think that’s something that will also contribute to a little bit of the share increase,” he said.

“We’re pretty bullish on the gaming opportunity and feel lots of exciting potential tailwinds in the 2024 product roadmap there,” he added.

iGaming legalisation efforts largely failed during the 2023 legislative sessions. However, there are hopes next year could be more fruitful.

DraftKings becomes US market leader

In October, Eilers & Krejcik Gaming (EKG) released a report suggesting DraftKings had overtaken FanDuel as the US online GGR market leader. 

Robins addressed the potential drivers behind this on the company’s Q3 earnings call.

“Internally, we see all of our metrics going in the right direction: retention rates or hold rates up, while promotional reinvestment rate across OSB and iGaming is down,” he said. 

However, Robins primarily opted to point to what he described as product leadership. 

“We certainly know that, among players that have tried multiple apps, we’re the best.”

However, Robins conceded it was difficult to tease out to what extent the share increase was driven by new players or retention rates, as opposed to stealing users from competitor sites. 

The executive also outlined the business’ thinking in terms of its global strategy.

He said the company’s product and technology investments, as well as other operational marketing infrastructure, is potentially “portable throughout the globe”.

Despite hinting at global expansion, Robins suggested the company was mindful of trying to do too much.

“With that said, we also understand that the largest market in the world is developing right now. We’re in a really strong position and a lot of what we feel has helped us and benefited us has been our singular focus here,” he added.

Best question

Michael Graham from Canaccord Genuity asked whether DraftKings was trying to follow the same path as set by tech giants whereby they aim to institutionalise an engineering lead.

Robins said this was “absolutely essential” in the firm’s strategic thinking. 

“We’ve said pretty much from day one that product wins. That is first and foremost the thing that has to be at the absolute forefront of the industry in order to be the best.

“Really the heart and soul of the organisation is product and technology. And I think you’re absolutely right, that’s something that we feel over the last several years has been a differentiator.” 

Best quote 

“I definitely think that cracking down on the illegal market is a good thing for us. I believe the AGA said that just in legal betting states alone, there is about $4bn revenue leakage happening into the illegal market.”

DraftKings CEO Jason Robins on Michigan, New York, and Florida cracking down on DFS player props.

Current trading and outlook

In Q3, DraftKings updated 2023 full-year revenue guidance to between $3.67bn and $3.72bn, compared to the previous range of $3.46bn and $3.54bn.

In addition, the business said it would be able to reduce its forecast EBITDA losses to between $95m and $115m. This is opposed to the originally predicted $190m to $220m loss for 2023. 

DraftKings shares have jumped after the US operator raised its 2023 revenue projections in the wake of a robust Q3 performance.

Topline numbers

DraftKings generated a 57% year-on-year revenue increase to $790m in Q3 2023.

However, in contrast to Q2 2023, when DraftKings achieved a positive EBITDA, the company reported an adjusted EBITDA loss of $153m in Q3.

Nonetheless, this loss represented a year-on-year improvement of $111m, and CEO and co-founder Jason Robins noted that both revenue and adjusted EBITDA exceeded DraftKings’ expectations.

Robins attributed the revenue increase to several factors, including strong customer engagement and acquisition, expansion into new regions, and product enhancements that boosted parlay mix and hold percentage, alongside improved reinvestment in promotions for both sportsbook and iGaming.

“The best product”

In a business update, Robins highlighted that thanks to strategic investments in product and technology, DraftKings has solidified its position as a market leader in the sports betting and iGaming industry. 

“We believe we now have the best product in the industry and, most importantly, have a clear product roadmap to extend our product lead over the coming quarters and years,” he said.

He referenced recent reports that DraftKings has now overtaken FanDuel to become the US online gambling market leader by GGR.

Additionally, he emphasised that, based on both state gaming reports and its own data, DraftKings currently commands a 33% market share in US online sports betting and iGaming GGR.

DraftKings is currently live with mobile sports betting in 22 US states that collectively represent approximately 45% of the US population.

Additionally, the company offers iGaming in five states, which account for roughly 11% of the US population.

In Canada, DraftKings is live with its sportsbook and iGaming products in Ontario, which represents approximately 40% of Canada’s population.

Rapid customer acquisition

Robins also highlighted that in Q3 DraftKings has experienced rapid contribution profit growth in older states, driven by higher customer retention, increased handle per customer, improved promotional reinvestment, and better hold. 

This has contributed to an expanding adjusted gross margin and a reduction in external marketing expenses, while improving customer acquisition costs. 

“Newer states are turning contribution profit positive in a significantly faster timeframe because we are acquiring customers more rapidly after a state launches,” Robins added. 

In Q3, DraftKings saw an increase in monthly unique players to an average of 2.3 million, up 40% on the prior-year period, while average revenue per monthly unique player was up by 14% to $114.

Robins also said that the company believes “the best is yet to come”.

“Over the past few years, we have built an organisation that is right-sized for the opportunity in front of us, and we expect low annual fixed cost growth from here and therefore a long runway of margin improvement,” he said.

Cost efficiency played a pivotal role in DraftKings’ positive adjusted EBITDA performance in Q2 2023.


Due to its strong Q3 performance, DraftKings has increased its revenue guidance for the fiscal year 2023. 

The new range now stands at $3.67bn to $3.72bn, up from the previous range of $3.46bn to $3.54bn. This updated guidance would represent year-over-year growth of 64% to 66%.

Moreover, DraftKings expects to be able to shrink its adjusted EBITDA loss to a range of $95m to $115m. Previously, the company anticipated an adjusted EBITDA loss of $190m to $220m. 

The operator also introduced revenue guidance for fiscal year 2024, set within the range of $4.5bn to $4.8bn.

This projection indicates over 25% year-on-year growth, based on the midpoint between the company’s fiscal year 2023 and fiscal year 2024 revenue guidance.

Additionally, DraftKings has provided adjusted EBITDA guidance for 2024, ranging from $350m to $450m.

DraftKings has reached an agreement in principle with the Passamaquoddy Tribe ahead of Maine’s sports betting market launch this Friday (3 November).

The tethered licence is the last of the available four permitted under Maine’s sports betting law. 

LD585, signed by governor Janet Mills in May 2022, grants each of the state’s four federally recognised tribes a sports betting licence.

However, the Maliseet, Micmac and Penobscot tribes all opted to partner with Caesars Sportsbook as opposed to one of the larger national operators. 

The news means that Maine is set to be a two-way race between DraftKings and its smaller competitor when the legal betting market goes live.

DraftKings added that the deal remains subject to licensing and regulatory approvals.  

“Building a relationship with the Passamaquoddy Tribe is a fantastic opportunity for DraftKings, as we look to bring customers in the state of Maine safe and legal sports betting,” said DraftKings CEO Jason Robins.

“We look forward to our continued collaboration with the Maine Gambling Control Unit as we become the official mobile sports betting provider of the Passamaquoddy Tribe and launch in our industry-leading 25th state.”

“The Passamaquoddy Tribe is excited to enter into a mobile sports wagering agreement with DraftKings,” added Passamaquoddy Tribe chief William Nicholas. 

“We couldn’t have landed a better organisation in the mobile sports wagering arena, and we look forward to continued progress and investment for future growth in the state of Maine.”

As late as April this year, no sportsbook operators had applied for a licence in the Pine Tree State.

Factors influencing this included the state’s low population, prohibitive licence restrictions and a punitive advertising regime.

Last month, a report from Eilers & Krejcik Gaming suggested that DraftKings had overtaken FanDuel to become the US online gambling market leader by GGR. 

Golden Nugget Online Gaming (GNOG) founder Thomas Winter has announced his departure from his role as the general manager of DraftKings North America. 

Winter has decided to step away from his responsibilities to embark on a sabbatical journey, marking the end of a remarkable chapter in his career.

In a message shared on LinkedIn, Winter stated: “Ten years after founding Golden Nugget Online Gaming, three years after taking it public and two years after its acquisition by the almighty DraftKings Inc., time has come for me to close this extraordinary chapter of my life and open a new one, this time focused on the latter part of work-life balance.”

Winter originally founded GNOG in 2013. Under his leadership, GNOG achieved the top position as the number one online gaming operator in New Jersey in 2018, boasting an impressive 18% market share. 

One of the major milestones in Winter’s career was taking the company public on the Nasdaq in December 2020. 

DraftKings acquisition

Later, in August 2021, DraftKings acquired GNOG in a monumental $1.5bn transaction, and the merger was successfully completed in May 2022.

Subsequently, Winter assumed the role of general manager of North America for iGaming at DraftKings. 

In his departure message, Winter expressed gratitude towards his colleagues and partners, which included DraftKings founders Jason Robins, Matt Kalish and Paul Liberman, as well as CBO Ezra Kucharz and CFO Jason Park.

He praised their understanding of the benefits of a multi-brand strategy and their trust in GNOG as the right addition to deliver on it.

While Winter’s departure marks the end of an era, he expressed confidence in the future of both DraftKings and Golden Nugget Online Gaming. 

“Although I’ll miss the action, I can’t wait to see what the amazing DK/GNOG casino team, led by uber-talented Gregory Karamitis and superstar Signe Yama, will deliver to stay atop the US iGaming world for years to come. I’ll be rooting for y’all,” he said.

Before his tenure at Golden Nugget and DraftKings, Winter spent four years at Betclic Group, where he served in various leadership roles.

From July 2010 to December 2011, he held the positions of CEO and director at Betclic and Expekt. Prior to that, he played a key role as COO at both businesses.

Winter has expressed uncertainty about his future career steps, emphasising his desire to prioritise spending quality time with his wife and children, travelling, and dedicating time to improving his fitness and well-being.

After declaring its first quarter of EBITDA profitability in Q2 2023, DraftKings management today (4 August) helped elucidate exactly how the business managed to reverse significant losses in recent years.

Topline numbers

DraftKings generated revenue of $875m during Q2, up 87.8% from $466m in the prior-year period.

That increase helped the business reach EBITDA profitability for the first time, as it posted adjusted EBITDA of $73m for the quarter, compared to an adjusted EBITDA loss of $118.1m in Q2 2022.

A more detailed breakdown of the Q2 financial results can be found here.

How did they do it?

Naturally, analysts on today’s earnings call were keen to understand the developments driving DraftKings’ change in fortunes.

The operator’s management was not shy about explaining how the turnaround came about, citing myriad factors all contributing to DraftKings’ Q2 success.

Fundamentally, CEO Jason Robins explained, the business has been laser focused on continuing to improve its product offering, with great attention paid to the development of its own same-game parlay (SGP) capabilities and the differentiation of its live betting content.

The business now has live SGPs built in-house for most major US sports including NFL, NBA, MLB, and college football and basketball.

The company’s “persistent focus on product differentiation is already apparent in share trends,” said Robins, suggesting DraftKings achieved OSB handle share of 35% and OSB GGR share of 32% in the quarter in states where it is currently live.

“We also maintained the number one iGaming GGR position and set an all time record for iGaming GGR share at 27%,” Robins concluded.

Financial contributors

DraftKings’ CFO Jason Park, meanwhile, was able to provide a more granular view on the specific financial benefits of several converging factors during the quarter.

He also set out how the strong Q2 performance had contributed to an upswing in the company’s expectations for the full-year 2023.

“Customer retention and engagement outperformed expectations as we successfully transitioned customers from the NBA season into MLB,” Park said, adding that “we have seen significantly better-than-expected engagement on MLB due to our enhanced product.

“Structural hold is also above expectations, at approximately 9% for the quarter, while promotional intensity improved, together supporting a more than 550 basis point year-on-year improvement in our adjusted gross margin rate to 47%,” he added.

In addition to those improvements, DraftKings’ fixed expenses were better than expected as the company focused on managing its costs and “exerted discipline on our compensation expense.”

Park also explained how the company’s more mature state markets had contributed outsized results to the business.

In states where DraftKings went live between 2018 and 2021, handle grew by more than 35% year-on-year, while revenue grew even faster at more than 70%, he explained.

Meanwhile, the adjusted gross margin rate in those states increased by more than 800 basis points, and the number of total unique customers increased some 25%, all while DraftKings was able to reduce its external marketing spend by more than 10% year-on-year.

After increasing previously issued revenue guidance by $315m, and adjusted EBITDA expectations by $110m, Park also broke down what specifically drove the improved forecast.

Customer retention, acquisition and engagement “are exceeding expectations,” he said, and therefore account for $225m of the expected revenue improvement and $100m of the adjusted EBITDA improvement.

Expected improvements to DraftKings’ sportsbook hold percentage, supported by the introduction of improved SGP and live betting capabilities, accounted for a further $40m in expected revenue improvement and $30m in EBITDA improvement.

Favourable sport outcomes in Q2 contributed a further $30m to the expected revenue improvement and $20m to the EBITDA improvement.

Those improvements are expected to be offset somewhat by an earlier-than-expected launch of sports betting in Kentucky (expected to deliver an additional $20m in revenue but a $30m reduction in EBITDA), and an increase in Ohio’s sports betting tax rate, expected to result in $10m in additional costs.

Best quote

CEO Jason Robins explains how DraftKings seeks to continually improve its product:

“It’s a very complicated product, and there’s a lot of things that can create customer friction if you’re not careful. Really a big focus for us over the last year and a half has been removing customer friction throughout the journeys.”

Best question

The best question on today’s earnings call came from David Katz of Jeffries, who asked management whether further M&A could be on the cards in order to help DraftKings keep up its recent momentum.

CEO Robins’ response was somewhat cagey, as he reiterated that: “It’s about to be the most important time of year seasonally for us. We have fall coming up with the NFL and college football calendar, NBA – lots of things happening this fall. 

“So this is the most important time of year, this is when we acquire the most customers, when we have the biggest opportunity to gain more market share, and it’s where we generate the most revenue and the most EBITDA.”

As a result, he said, DraftKings’ teams remain “laser focused on executing,” and the business has “a lot of exciting stuff coming for NFL and college football and basketball and hockey and everything else.”

Finally providing a somewhat direct response to Katz’s question, he concluded: “Listen, there’s always talk of things happening in the background, and we have small teams that make sure they’re aware of what’s going on. 

“But as a company, we’re very, very focused on executing and winning in the US.”

Current trading and outlook

Revenue for full-year 2023 is now expected to fall between $3.46bn and $3.54bn, representing an increase of $315m at the midpoint compared to previously issued guidance.

Full-year adjusted EBITDA is expected to fall between a $190m loss and a $220m loss, down from a previously stated expected EBITDA loss between $290m and $340m.

Elsewhere, DraftKings’ adjusted gross margin percentage is now expected to fall between 43% and 45%, rather than the previously stated range of 42-45%.

The business ended Q2 with $1.1bn in cash and now expects to end 2023 with more than $1bn on its balance sheet.

DraftKings has followed in the footsteps of its US-facing peers to become the latest operator to turn to EBITDA profitability in Q2 2023.

DraftKings generated revenue of $875m during Q2, up 87.8% from $466m in the prior-year period.

The increase was driven primarily by continued customer retention and engagement, efficient acquisition of new customers, product innovation and improved promotional intensity, the operator said.

For the first time, DraftKings reached EBITDA profitability, as the firm posted adjusted EBITDA of $73m for the quarter, compared to an adjusted EBITDA loss of $118.1m in Q2 2022.

Still, the business declared a loss from operations of $69m for the quarter, down from a $308.9m loss, and a net loss of $77.3m, compared to a $217.1m net loss in the prior year.

The results were driven by an increase in monthly unique players to an average of 2.1 million, up 44% on the prior-year period.

The average revenue per monthly unique player was up by 33%, meanwhile, to $137.

Following the improved results, DraftKings has updated its previously issued revenue guidance for full-year 2023, raising the midpoint of the guidance range by $315m to $3.5bn.

“DraftKings produced outstanding results for the second quarter of 2023,” said CEO and co-founder Jason Robins. 

“We grew revenue at an impressive year-over-year rate, captured additional GGR share in a cost-effective manner, and maintained our focus on operational efficiency.

“The positive adjusted EBITDA that we generated in the second quarter exceeded our guidance, and we are well on our way to achieving positive adjusted EBITDA again in the fourth quarter of 2023 and for fiscal year 2024 and beyond.”

DraftKings CFO Jason Park added: “Our unit economics are outstanding with older states generating more than enough cash to fund investment in new states. 

“This performance, combined with fixed costs that grew at only a mid-single digit year-over-year percentage rate in the second quarter, resulted in an inflection to positive adjusted EBITDA that we expect will occur again in the fourth quarter and for full year 2024.”

Sports merchandise giant Fanatics has tabled an increased bid of $225m to acquire the US assets of ASX-listed online gambling operator PointsBet.

The purchase should provide Fanatics with an opportunity to quickly set up sports betting operations in the US, through its acquisition of a proven proprietary tech stack with market access in 14 US states.

Acquisition background

Fanatics initially tabled a $150m bid for the business in May, and subsequently entered into a binding agreement with PointsBet as the firm’s board unanimously recommended shareholders vote in favour of the deal.

That process was complicated by a last-minute move from DraftKings, as it submitted a superior all-cash offer of $195m for PointsBet’s US operations.

That offer was subsequently considered by PointsBet, which said it “could reasonably be expected to lead to a superior proposal,” although doubts continued around whether DraftKings could table a definitive agreement before the 30 June deadline.

Bidding war reaches cease fire

In any case, DraftKings’ ambitions to buy the business have now been thoroughly dashed as PointsBet shareholders are set to vote on Fanatics’ improved offer on Friday 30 June.

The new deal will follow a similar structure to Fanatics’ original proposal, with the $75m increase in price added onto the initial upfront consideration to be paid by the business.

While the original offer would have seen Fanatics pay an initial $100m followed by a further $50m later on, the business will now pay $175m upfront with a further $50m still to be paid at a later stage.

PointsBet’s board has again unanimously recommended that shareholders vote in favour of the deal at an extraordinary general meeting on Friday.

DraftKings, meanwhile, said it no longer intends to pursue the acquisition.

PointsBet previously made clear that something had to give to allow the business to continue operating without seeking new funding in “challenging” market conditions.

Its existing corporate cash balance was insufficient to fund the US business through to profitability, it said when announcing that its assets would be put up for sale.

Management commentary

“The board unanimously supports the improved proposal from Fanatics Betting & Gaming (FBG), which provides a superior price plus certainty,” said PointsBet chairman Brett Paton.

“FBG conducted their diligence process and negotiations in a highly professional manner at all times. The offer to ‘front end’ the additional consideration is an element which we regarded as a welcome and significant benefit to our shareholders.

“Subject to shareholder and regulatory approvals, our US team will have a strong future as part of the FBG group and PointsBet will build on the opportunities in Australia and Canada underpinned by a strong balance sheet.”

DraftKings and Fanatics: Strange bedfellows?

The bidding war between DraftKings and Fanatics has generated increased levels of interest in and speculation over the history of the two companies.

Several commentators within the market suggested that DraftKings’ bid was at least in part intended to slow Fanatics’ progress in the sports betting sector, with its acquisition of PointsBet set to significantly accelerate its entry in the market.

Fanatics CEO Michael Rubin suggested that DraftKings’ bid was a “move to delay our ability to enter the market,” adding: “I guess they are more concerned about us than I would have thought.”

According to a report in the New York Post, however, the history between DraftKings and Fanatics goes back much further than this recent acquisition battle.

Sources “close to the situation” told the Post that the two companies were in “deep talks” in early 2021 around a 50/50 merger, which would see each of the businesses valued at some $24bn.

Fanatics CEO Rubin was said to have walked away from the deal near the end of the process, allegedly leaving DraftKings chief Jason Robins with a grudge to bear.

In a statement issued by DraftKings, however, the business said its bid for PointsBet was “centred around the significant synergies and financial rationale, along with the interesting product and technology capabilities we would acquire through the proposed transaction”.

“To suggest that there is an ulterior motive that is personal and not business related is irresponsible and not grounded in reality,” the firm added.