On March 11, DraftKings CFO Jason Park participated in Bank of America’s Sports Betting and Online Gaming Virtual Event, highlighting where the sports giant lies at a critical time for sportsbook operators.
Park talked about customer acquisition plans and a path to profitability, according to Play Pennsylvania.
“I have said multiple times that our fixed cost will meaningfully slow down starting in 2023,” said Park.
In August 2021, DraftKings agreed to acquire Golden Nugget Online Gaming for $1.56 billion in an all-stock deal. The agreement expects to close in early 2022.
“DraftKings has done incredibly well with iGaming. The DraftKings brand just doesn’t resonate with that casino-first customer nearly as much as Golden Nugget does and we looked at multiple opportunities. We looked at building our own casino-first brand and we got very excited about the Golden Nugget brand.”
iGaming at DraftKings has been done completely in-house and it’s given them time to build their product portfolio of DraftKings versions of standard casino games like DraftKings Blackjack. DraftKings Rocket was built in-house and is currently available in New Jersey, Michigan in West Virginia.
The game is played with a rising rocket and players must cash-out by exiting the rocket before it stops rising. The higher the rocket goes, the bigger the multiplier will be applied to your bet.
“It’s performing extremely well. Going forward, you’ll see us bring to market more in-house games that are innovative and unique to DraftKings. We have a DraftKings games studio, which would be within our products and tech org and that’s all part of the fixed cost growth that we’ve experienced, and we’ll continue to experience through 2022,” Park said.
Discussions came amid DraftKings stocks tumbling 72 percent in the last 12 months and 35 percent in 2022. Revenue projections for 2022 expect to reach $1.9 billion.
DraftKings’ CEO isn’t happy with the investors who sell company shares.
“If you sold #DKNG today, just be aware that my team and I are on a mission to make you regret that decision more than any other decision you’ve ever made in your life,” DraftKings CEO Jason Robins tweeted
The tweet attracted more than 2,300 likes by March 10, was retweeted 588 times, and was commented on 863 times, according to CDC Gaming Reports.
The Motley Fool reported that DraftKings officials said during a March 3 investor day that the company should have $2.1 billion in annual adjusted earnings before interest, taxes, depreciation, and amortization when the business reaches its full potential. But the company did not speculate when the day arrives.
Near-term developments make the company optimistic about the future. Nevertheless, MoffettNathanson’s Robert Fishman told The New York Times DraftKings won’t see a positive cash flow until 2025 and see a profit until 2028.
