The company increased its mobile parlay mix by 17 percentage points (pp) year-on-year during the quarter.
In other words, the percentage of bets that were parlays increased by 17pp. That helped increase hold rate and boost revenues, DraftKings said.
The parlay uptick was driven by:
- Introduction of UFC same game parlays
- Pre-packaged same game parlay (SGP) offerings
- Feature that allows customers to void individual legs without voiding the entire bet slip
- Parlay insurance, so customers can lose one leg and not lose
“We’re seeing great success driving parlay mix in our sportsbook product,” said DraftKings CEO Jason Robins.
Not done yet
Robins added on the subsequent analyst call: “We’re obviously not done. And I think we can hopefully see [the parlay mix] continue to go up.”
Robins was asked about DraftKings’ targets for parlay mix and hold, and said FanDuel represented a “minimum ceiling.”
FanDuel has historically run a couple of percentage points higher on hold than DraftKings thanks to its SGP offering:
“We continue to close that gap, and they continue to increase [their parlay mix] too,” Robins said. “So it feels like there’s a pretty high ceiling there.”
DraftKings is also introducing a new feature to let customers parlay SGPs.
DraftKings Q2 numbers
Q2 revenue rose 56.6% to $466.2 million, while adjusted EBITDA loss rose 23.9% to $118.1 million. Both beat analyst expectations.
DraftKings also raised its 2022 revenue and EBITDA guidance, prompting a 10% jump in the stock on Friday to $18.31.
What else did we learn from DraftKings Q2 call?
Robins said Ontario sports betting was “going as expected,” which is to say, not quite as well as US launches.
“We have projected 10% to 20% share in Ontario as opposed to 20% to 30% in US states,” Robins said. “We said pretty consistently we thought it would be more of a slower grind given the nature of the market where there was just a lot of continuity from the gray market.”
Multiple US sportsbooks have echoed that message about the strength of the gray-market firms this earnings season.
Money in the bank
Elsewhere, Robins said he had “more conviction than ever” that DraftKings would reach positive free cash flow with current capital reserves.
He added: “Despite that conviction, we are still making a concerted effort this year to drive efficiency opportunities and early (Golden Nugget Online Gaming) synergies and have already identified approximately $100 million of cost reductions for this year.”
DraftKings ended Q2 with around $1.5 billion on the balance sheet.
Land of milk and honey
Out west, DraftKings is “cautiously optimistic” about California sports betting passing in November.
“We feel just as optimistic as we did a quarter ago,” Robins said. “I continue to believe that we’ll get this over the line. But there’s still a long way to the election, so lots can happen. We’re certainly not celebrating yet, and things could swing either way.