DraftKings has launched a first-of-its-kind subscription service, aimed at enhancing parlay betting experiences for its users.
DraftKings Sportsbook+, priced at $20 per month, launched this week in New York, giving subscribers access to “stepped-up” parlay boosts, significantly increasing the potential payouts for bettors who build multi-leg wagers.
The service, first reported by Sportico, marks the first promo subscription service for a major US sportsbook and next evolution in sportsbooks seeking to capitalize on the surging popularity and profitability of parlays.
How DraftKings Sportsbook+ works
Subscribers to DraftKings Sportsbook+ receive incremental odds boosts on parlays based on the number of legs:
- A two-leg parlay receives a 10% odds boost.
- A three-leg parlay receives a 20% boost.
- For parlays with 11 or more legs, the odds double, offering a 100% boost.
The only restriction is that no individual leg in the parlay can have odds greater than -500. The service is available as a free trial for the first month, after which it costs $20 per month. However, it is currently restricted to “select, eligible customers” in New York, and DraftKings has not specified the qualifications for eligibility.
“We’re constantly communicating with our customers to understand the products they use and love in their daily lives, and exploring how we can apply those insights to DraftKings. This process led us to developing a low-cost, recurring subscription designed to provide customers with exceptional value,” DraftKings Chief Product Officer Corey Gottlieb said in a statement. “As we test this new offering, we’ll refine our approach in order to provide the most engaging customer experience.”
Parlays an engine of profitability
Parlays have become the backbone of profitability for sportsbooks like DraftKings. These multi-leg wagers, while appealing for their potential large payouts, carry higher margins for operators because all legs must win for the bet to cash.
“Structural sportsbook hold percentages increased year over year as customers continue to enjoy our parlay offerings,” CFO Alan Ellingson said during the company’s most recent earnings call.
DraftKings has aggressively leaned into parlay offerings to boost profitability. During the company’s most recent earnings call, CEO Jason Robins highlighted a 5 percentage point year-over-year increase in the parlay mix for NFL betting through Week 9 of the season.
This strategy has been instrumental in DraftKings’ financial turnaround: the company reported $92 million in EBITDA for the first nine months of 2024, compared to losses of $151 million in 2023 and $721 million in 2022.
The latest parlay-centric product for DraftKings
DraftKings’ focus on parlays is not limited to Sportsbook+. Recent innovations:
- Progressive parlays: Launched in December 2023, these allow bettors to win partial payouts if some legs lose, albeit at reduced odds.
- Pick6: A daily fantasy sports product available in 31 states, inspired by popular pick’em games like PrizePicks and Underdog.
- Additional NFL and NBA markets for same-game parlays: Designed to funnel bettors toward high-margin wagers.
According to Morgan Stanley, more than 50% of US bettors now prefer parlays versus straight bets. The firm is among many investment banks that have highlighted the potential for further growth in parlay betting, particularly if sportsbooks expand their marketing to older demographics.
Parlays now account for 70% of both NBA and NFL betting at DraftKings rival FanDuel. That shift has drastically lowered the odds of customers winning their bets, with the average FanDuel bet’s odds up by 260% from 2019.
Parlay service replaces surcharge
The service comes as DraftKings navigates a challenging tax environment in New York, which imposes a nation-high 51% tax rate on sports betting revenue. Last year, the company proposed a controversial surcharge on winning bets to offset the impact of high taxes. However, the idea was scrapped amid public backlash and investor concerns, just hours after rival FanDuel opted not to follow suit.
DraftKings Sportsbook+ launches right around the same date as the surcharge had been planned for.
Robins has repeatedly emphasized that the company would mitigate high tax burdens through other measures, such as reducing marketing spend and promotional output in certain states.
Investors eye February report
DraftKings’ foray into subscription-based promo services could serve as a blueprint for other sportsbooks navigating high-tax markets, or it could be another in a line of recent experiments for the sportsbook, which finished just behind FanDuel in 2024 betting revenue.
Investors will likely be eager for updates on the success of Sportsbook+, such as subscriber numbers and retention rates, when DraftKings reports its fourth-quarter earnings in February.
