Sports betting operator DraftKings, in its first full quarterly report as a public company, looked past results muted by COVID-19, which limited wagering options, and focused on the gaming vertical’s future.
In a statement Friday, DraftKings Chairman and CEO Jason Robins noted the company has more $1.2 billion in cash on our balance sheet and no debt. The company added $800 million to its balance during June through a stock offering and financial efforts.
“DraftKings is well-positioned to build upon the growth of the online sports betting and igaming market in the U.S.,” Robins said. “As a technology-first organization, we will continue to focus on bringing new and innovative products to market that strengthen our engagement with customers and maintain our competitive differentiation.”
During the quarter, which ended June 30, DraftKings, which is headquartered in Boston, launched sports betting in Colorado and igaming in Pennsylvania.
Since the end of the month, DraftKings has launched sports betting in Illinois and igaming in West Virginia. The company is working to enter Virginia and Tennessee for sports betting and Michigan for sports betting and igaming. All three states have passed legislation.
In April, DraftKings merged with Diamond Eagle Acquisition Corp., a blank-check company, and acquired sports gambling platform supplier SBTech and went public on the Nasdaq.
In the quarter, DraftKings reported net revenue of $71 million, a 24% increase compared with the same period. The company reported a net loss of $161.4 million, compared to a net loss of $28.1 million last year.
DraftKings went public at a time when professional and college sports were canceled due to the coronavirus pandemic. The company, however, provided wagering on non-traditional events, such as soccer from Belarus, table tennis from Russia, and the Korea Baseball Organization.
Now, with the return of the NBA, NHL, and Major League Baseball, as well as the anticipated start of the NFL in the fall, DraftKings is predicting a 22% to 37% revenue growth for the second half of 2020.
“The momentum we saw in June accelerated with the return of MLB, the NBA, and the NHL in late July and early August,” Robins said. “As a result, we are seeing revenue growth in the first part of the third quarter.”
In a statement, the company said the guidance assumes that the professional sports calendar remains as currently contemplated and that DraftKings operates in the states in which it is currently live.
“In golf, prior to this year, our top (betting) event of all time was the 2019 US Open,” Robins said in a statement. “Since the restart of the PGA Tour, six PGA Tour events and The Match II have topped that major.”
In a note to investors, Jefferies gaming analyst David Katz said the DraftKings second-quarter results were “less relevant” given the company’s projections moving forward in for the rest of the year.
“We continue to believe that all aspects of digital wagering are the highest growth opportunities in gaming,” Katz said. “DraftKings, as a first-mover with (a) leading product, should prove successful (and) the quarter provides incremental support for our view.
Shares of DraftKings closed at $33.91 in trading Friday, down $2.14 or 5.94%.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
