DraftKings is seeing substantial positives from all three of its main products, CEO Jason Robins touted Tuesday at the Wells Fargo Consumer Conference.
DraftKings is competing with the likes of Kalshi and Polymarket in terms of sports volume share, seeing strong handle growth at its sportsbook and is beginning to make up some of its lost online casino share after months of improvements, Robins said at the conference.
All of that momentum should pay off financially for DraftKings. Robins confirmed the core business of sports betting and online casino should see 2026 adjusted EBITDA of around $1 billion. That figure “should increase materially” in 2027, Robins added, noting the company will discuss more about 2027 at its Q3 earnings in November.
DraftKings was trading up around 2% after the call ended at noon Eastern.
Sportsbook handle up 15%
Any concerns about predictions significantly cannibalizing sports betting handle can breathe a sigh of relief, for now.
“Everybody was concerned about handle growth,” Robins said. “We have seen enormous handle growth to start the season, 15% so far month to date, and really just great engagement from customers there.”
While two weeks is far from an entire season, it is step in the right direction for the stock price as investors have been concerned about the impact from predictions.
That growth could be hard to parse out in September‘s monthly revenue reports given the calendar change. A late Labor Day means just three NFL betting Sundays this month compared to four last year.
DraftKings still finding new customers in old states
Existing online sports betting states have seen healthy customer acquisition to start the NFL season as well.
“One of the also great stories has been customer acquisition in our existing OSB states has been really healthy to start the season too.
“So we are still seeing an influx of new players even in the states that we’ve been live in for many, many years,” Robins said.
He noted the trailing 12 months active customer number is around 11 million to 12 million, but that will change.
“Definitely feel like that’s a number that will keep going up and, obviously, we continue to try to do everything we can to expand that number,” Robins added.
Parlay mix up
While handle growth is important, Robins said the company is excited that parlay handle as a percentage of total handle is up 3 percentage points to start the season.
That has exceeded DraftKings’ expectations and is a “great number,” Robins said.
“People keep asking where that caps out and every year it keeps going higher, so, don’t have an answer for that yet, but seems like there’s still some ceiling to be reached on that, some upside to be reached on that.”
Robins: best football predictions offering
Consumer volume from DraftKings Predicts is up about 2.5 times the annualized consumer run rate of $11 billion reported for July, Robins said. That number is trending higher every week.
The platform has seen “well over” a million customers. That should be multiple millions by the time the NFL season is over, Robins added.
DraftKings is approaching a double-digit share of sports volume, with the number even higher when isolating just NFL trading, he said. DraftKings offers three times as many NFL markets as the competition and about 1.5 times as many college football and MLB markets.
“We actually feel we have the best offering now on NFL,” Robins said. “… We feel like really quickly, in a really short period of time, we’ve gone from, you know, what was objectively not the greatest product in market about eight or nine months ago, 10 months ago, to now, we feel, the best sports product in the market backed up by the content offering and the breadth of that.”
Robins likened the current predictions climate to online sports betting in 2020 into 2022 with a lot of competitors that think they can take material share, which he said the company welcomes. Plenty of those sports betting competitors were bought or shuttered.
Combos already significant
Robins noted that combos “have been a great story for us, too.”
“Last weekend and NFL Sunday, we were up to almost 30% in combo mix,” Robins said. “Which, just to put in perspective, it took us five years plus to get to that level with sportsbook.”
Increase in predictions spending expected
Robins thinks the company could spend more than it initially expected to on customer acquisition because of the “amazing conversion” DraftKings is seeing.
What exactly that amount will be is still unknown and will depend on what the data says, he added. That information should also be available by the November call.
“It’s still a long season, we have a lot of ways to go, but based on the trends we’re seeing we could see meaningfully more investment,” Robins said. “I think that’s a good thing because it should accelerate our revenue and our gross profit for next year.”
An increase in spending does not necessarily mean higher spending in 2027, Robins said.
DraftKings OK with or without predictions
Robins said DraftKings is good either way the Supreme Court could rule on sports contracts, noting that the stock would probably pop if sports predictions were outlawed tomorrow.
“I do think we are in a good position either way though,” Robins said. “I really believe that we are well set up regardless of the outcome, which was not easy. Credit to our team in doing a lot of great work both strategically and executing really in a great way.”
That said, he would ideally like to see those predictions investments pay off for years to come.
“I hope it sticks around because I think it’s a huge incremental [total addressable market], and we’re doing well,” he said. “I mean, we are clearly separating ourselves as right there alongside Kalshi and Polymarket and climbing in terms of the conversation and who I think will be long term, viable competitors in this market.”
Nearly all states under one roof
There is still a “handful” states that need to be fully integrated into the DraftKings super app, which features all of its products in one place, according to Robins.
The moderator, Trey Bowers of Wells Fargo, noted he was able to use funds deposited in Massachusetts to trade in California.
“But really, for the most part, the experience you’re describing is what we’re able to produce now in most states across the country,” Robins said. “We think that is a huge component, especially knowing not just do people travel but also we have a lot of customers that at some point in their life have opened up a DraftKings account, made a deposit in another state that had legal sportsbook when they were traveling, that could be any amount of time ago.
“So for those customers to go in and access those accounts and those funds is really a huge part of the conversion funnel that we’re able to jumpstart.”
DraftKings regaining iGaming share
DraftKings is starting to win back some of the online casino market share it previously lost, Robins said.
It is not just one thing that has turned the product around, Robins said, noting that it is more like dozens of little things and “sustained execution.” DraftKings made some changes to its online casino team nearly a year ago, and the efforts since then have led to those share gains, he added.
He called out two main points that helped improve the product. The first is the success of its daily rewards program. He admitted the company was “late to the game” but said DraftKings now has the best rewards in the market.
The second was the launch of Lightning Link, one of the most successful land-based slots from Aristocrat that had yet to move online. There was a cohesive plan for that late July launch across the business, Robins said.
Maine partnership confirmed
DraftKings will enter its sixth online casino state when it goes live through a partnership with the Passamaquoddy Tribe, which DraftKings partnered with for sports betting in November 2023.
Only the state’s four gaming tribes received online casino licenses. Caesars partnered with the Wabanaki Nation tribes – the Houlton Band of Maliseet Indians, the Mi’kmaq Nation and the Penobscot Nation – for sports betting and will do the same for online casino.
Robins suggested Maine online casinos could launch later this year.
Any other states coming?
Both Illinois and New York are “when, not if” concerning online casino, but probably not in the near future.
Robins also noted action in the DMV area, or the District of Columbia, Maryland and Virginia. All three saw some level of online casino discussion this year, though none crossed the finish line.
