A major sports betting company is continuing to grow amid an investment in innovation.
DraftKings is expecting significant expansion as an online sports betting operator, according to recent data provided by the company during its virtual investor day. The Boston-based sports betting, fantasy, and iGaming provider expects a total addressable market of $30 billion in 2028, up from $20 billion in 2023. Its projections only include states DraftKings currently operates in.
DraftKings is looking to separate itself from the competition with its new “Progressive Parlays.”
"We are not taking our foot off the gas," said DraftKings CEO Jason Robins to media during the company’s virtual investor day on Tuesday. "We believe that our velocity and pace of product innovation will continue to be faster than any other operator in the U.S. online gaming space."
The new feature allows users to create parlays that offer potential returns even if one or more legs lose. The offering, which has yet to receive a launch date, allows users to create a parlay of up to 12 legs based on the “over/under” of betting markets. The winnings of Progressive Parlays are based on the number of legs, which also dictates how many ways there are to win.
DraftKings will offer Progressive Parlays on its sportsbook through its in-house content engine.
Promising outlook
DraftKings is expecting growth following strong results in the company’s latest earnings report.
DraftKings generated $790 million in revenue in Q3 2023 — a 57% increase year-over-year. The company reported roughly 33% of total receipts in the markets in which it operates, placing it first among other U.S. sports betting and iGaming operators for gross gaming revenue in Q3.
As a result of the growth, DraftKings raised its full-year revenue guidance. The company projects to generate between $3.67 billion and $3.72 billion in revenue in FY2023 compared to a previous estimate of between $3.46 billion and $3.54 billion. DraftKings expects a loss on an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) basis in 2023 of between $95 million and $115 million. It previously projected a loss on an adjusted EBITDA basis of between $190 million and $220 million for the fiscal year.
DraftKings expects those figures to improve in the coming years. The company expects an adjusted EBITDA of $1.4 billion in 2026 with an increase to $2.1 billion in 2028. DraftKings’ projections only include the existing wagering licenses it has secured in states across America.
It could add $6.2 billion of annual adjusted EBITDA if more states authorize sports wagering.
