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DraftKings Reports Fourth Quarter and Full-Year 2020 Results and Raises 2021 Revenue Guidance

Published

4 years ago

March 1, 2021

George Miller

DraftKings Provides International Center for Responsible Gaming with Financial Support for First-of-its-kind Sports Wagering Research

DraftKings Inc. reported fourth quarter and full-year 2020 financial results.

Fourth Quarter 2020 Highlights

For the three months ended December 31, 2020, DraftKings reported revenue of $322 million, an increase of 146% compared to $131 million during the same period in 2019. After giving pro forma effect to the business combination with SBTech (Global) Limited (“SBTech”) and Diamond Eagle Acquisition Corp. which was completed on April 23, 2020, as if it had occurred on January 1, 2019, revenue grew 98% compared to the three months ended December 31, 2019.

“With a favorable fourth quarter sports calendar and strong marketing execution, DraftKings was able to generate tremendous customer acquisition and engagement that propelled us to $322 million in fourth quarter revenue, a 98% year over year increase,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board. “In the fourth quarter of 2020, we saw MUPs increase 44% to 1.5 million and ARPMUP increase 55% to $65. We are raising our revenue outlook for 2021 due to our expectation for continued growth, the outperformance of our core business and newly launched states that were not included in our previous guidance.”

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Favorable Sports Calendar and Strong Customer Engagement Drove Q4 Results

Monthly Unique Payers (“MUPs”) for our B2C segment increased 44% compared to the fourth quarter of 2019. On average, 1.5 million monthly unique paying customers engaged with DraftKings each month during the fourth quarter. The increase reflects strong unique payer retention and acquisition across DFS, OSB and iGaming. For 2020, MUPs increased 29%, which includes the impact of COVID-19 on our MUPs for Sportsbook and DFS primarily during the second quarter and early in the third quarter.
Average Revenue per MUP (“ARPMUP”) was $65 in the fourth quarter representing a 55% increase versus the same period in 2019. Our ARPMUP was positively impacted by increased engagement with our iGaming and mobile sports betting product offerings as well as successful cross-selling. For 2020, ARPMUP increased 29%.

Increasing 2021 Revenue Guidance

DraftKings is raising its fiscal year 2021 revenue guidance from a range of $750 million to $850 million to a range of $900 million to $1 billion, which equates to year-over-year growth of 40% to 55% and a 19% increase compared to the midpoint of our previous guidance.
The increase reflects strong performance in the fourth quarter of 2020, substantial user activation due to the effectiveness of our 2020 marketing spend, and the launch of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia. This guidance also assumes that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today.
Detailed financial data and other information for the fourth quarter and full-year 2020 is available in DraftKings’ Annual Report on Form 10-K, being filed today with the Securities and Exchange Commission (the “SEC”), as well as in a slide presentation that can be accessed through the “Investors” section of the Company’s website at investors.draftkings.com.

DraftKings Grows Its Nation-Leading Mobile Sports Betting and iGaming Footprint

DraftKings expanded its footprint to include mobile sports betting in Tennessee in the fourth quarter of 2020. In 2021, DraftKings launched mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia.

In November, DraftKings launched mobile sports betting in Tennessee. The state of Tennessee had the best two month launch in U.S. sports betting history with over $300 million in handle in its first two months of operation including 38% month-over-month growth in December.
On January 1, 2021, DraftKings began mobile registration in Iowa according to state regulations. By 3PM ET on January 5, DraftKings registered more customers via mobile registration than through the entirety of 2020.
Following successful launches in Michigan and Virginia in 2021 (combined these states represent 6% of the U.S. population), DraftKings is now live with mobile sports betting in 12 states, which is more than any other company in the industry. These 12 states together represent 25% of the U.S. population, a position that DraftKings has achieved less than three years after the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992.
In 2021, 19 state legislatures have introduced legislation to legalize online sports betting, five state legislatures have introduced legislation to expand their existing sports wagering frameworks and one state legislature has introduced legislation to legalize sports betting limited to retail locations. In addition, four states have introduced iGaming legislation and two states have introduced online poker legislation.

Commercial and Strategic Agreements

DraftKings announced several advantageous commercial and strategic agreements in the fourth quarter that are expected to provide the Company with access to unique and valuable content, intellectual property and marketing assets, including:

a multi-channel deal with the Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino, which would provide DraftKings with access for online sports betting ahead of the anticipated launch of legal sports betting in Connecticut, subject to necessary legislative and regulatory approvals. As part of the deal, DraftKings also became the official daily fantasy sports partner of Foxwoods Resort Casino;
a multi-year agreement with Turner Sports, making DraftKings the exclusive sportsbook and daily fantasy sports provider across select Turner Sports and Bleacher Report properties, excluding NBA programming;
an agreement with Triller which allowed DraftKings to be the “Official Sports Betting and Fantasy Sports Partner” of the boxing match between Mike Tyson and Roy Jones Jr.;
a multi-year deal with the Philadelphia Eagles, making DraftKings the Official Daily Fantasy Sports Partner and Official Sports Betting Partner of the team;
an exclusive, multi-year relationship with Bryson DeChambeau, who became the first active professional golfer to represent DraftKings via an integrated brand, content, marketing, and VIP centric collaboration;
an agreement with the Detroit Pistons, making DraftKings the team’s exclusive Official Daily Fantasy Sports Partner, as well as an Official Sports Betting and Casino Partner;
a multi-year deal with the Nashville Predators, making DraftKings the Official Daily Fantasy Sports Partner and an Official Sports Betting Partner of the team;
the successful launch of a mobile and online iGaming and sportsbook platform for PalaceBet (PalaceBet.co.za) in South Africa, powered by DraftKings’ cutting-edge B2B sports betting and iGaming technology;
the renewal and extension of our relationship with MansionBet, the Gibraltar-based sport betting brand of the Mansion Group, which will see DraftKings’ B2B technology continue to power the tier one operator’s sportsbook and casino platform; and
an agreement with InComm Payments to launch an industry-first retail gift card. The launch enables consumers to gift the DraftKings experience to others in $25 and $50 denominations and expands our brand across retail locations nationwide.

Product, Technology and Content

DraftKings’ migration to SBTech continues to be on-track for completion by the end of third quarter of 2021. We also continued to invest in our products and create engaging content:

maintained the highest DFS app store ratings for both iOS and Android as well as the highest iOS rating for Casino and Sportsbook. As of March 1, 2021, Google is expanding the number of countries where developers can publish licensed real money gaming apps to include the United States. DraftKings’ Sportsbook and Casino apps will be available to download for Android users via the Google Play Store;
announced a multi-year agreement to become a primary sponsor of the Center for Gaming Innovation, housed within the International Gaming Institute (IGI) at the University of Nevada, Las Vegas (UNLV); and
developed an original concept show, B/R Drop Zone: DraftKings Big Game Prop Reveal, that provided football fans with an exclusive first glimpse at DraftKings’ proprietary Super Bowl prop bets in a new reveal show which streamed live on the Bleacher Report app.

Environmental, Social and Governance Initiatives

DraftKings raised and donated over $1.6 million to charity through a variety of ESG-related initiatives in 2020. Fourth quarter 2020 and first quarter 2021 highlights include:

published our first ESG report on February 22, 2021 outlining our views on environmental, social and governance factors and highlighting those factors that are most relevant to our business;
raised $113,000 to help fund breast cancer research in collaboration with the Larry Fitzgerald Foundation through the second-annual DraftKings Pink ‘Em initiative, a month-long philanthropic effort that featured four charity contests on each NFL Sunday in October. More than 385,000 DraftKings customers participated throughout Breast Cancer Awareness Month this season;

raised $183,000 through charity DFS contests in support of the Company’s Tech for Heroes initiative, which provides recent and returning veterans and their spouses with free, high-tech skills training in areas like front end web development and cybersecurity; and
raised $180,000 through charity DFS contests in support of the Community Foundation of Middle Tennessee, which created the Neighbor’s Fund in response to the Christmas Day explosion that occurred in downtown Nashville, Tennessee.

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Bragg Gaming Group Announces Record Third Quarter 2024 Revenue of Eur 26.2 Million (USD 29.3 Million)

Published

2 days ago

November 15, 2024

George Miller

Bragg Gaming Group Announces Record Third Quarter 2024 Revenue of Eur 26.2 Million (USD 29.3 Million)

Bragg Gaming Group, a global B2B content-driven iGaming technology provider, reported record revenue for the third quarter of 2024.

Summary of 3Q24 Financial and Operational Highlights

Euros (millions)⁽¹⁾	3Q24	3Q23	Change
Revenue	€ 26.2	€ 22.6	15.9 %
Gross profit	€ 14.0	€ 11.9	18.1 %
Gross profit margin	53.5 %	52.5 %	99 bps
Adjusted EBITDA⁽²⁾	€ 4.1	€ 3.8	7.1 %
Adjusted EBITDA margin	15.6 %	16.9 %	(129) bps
Operating Income (Loss)	€ (0.4)	€ (2.1)	(81.0) %

(1) Bragg’s reporting currency is Euros. The exchange rate provided is EUR 1.00 = USD 1.12. Due to fluctuating currency exchange rates, this reference rate is provided for convenience only.
(2) “Adjusted EBITDA” is a non-IFRS measure. For important information on the Company’s non-IFRS measures, see “Non-IFRS Financial Measures” below.

Chief Executive Officer Commentary
Matevž Mazij, Chief Executive Officer for Bragg, commented, “The third quarter marked another period of strong growth and record results for Bragg. Revenue grew 16% year-over-year, gross profit increased 18%, and Adjusted EBITDA rose 7%. In the U.S., strong third quarter revenue gains from content distribution helped drive a 40% global increase in proprietary online content revenue year-over-year.

“Additionally, we announced today that the Board of Directors has unanimously decided to conclude its review of strategic alternatives for Bragg. After extensive evaluation and deliberation, the Board determined that the ongoing execution of the Company’s strategic plan is the best way to maximize value for shareholders at this time.

“Since stepping in as Chairman 16 months ago and then as CEO 14 months ago, we’ve transformed our executive team, restructured commercial operations, and sharpened our sales strategy with a targeted, jurisdictional approach. These decisive actions position us to drive growth and capture market opportunities with greater precision and impact. Under new leadership, we’ve built a strong pipeline of tier 1 opportunities across key markets and key products, positioning Bragg for accelerated top- and bottom-line growth.

“With the strategic review process now complete, Bragg is now fully focused on commercialization and unlocking profitable growth, without the need for significant new investment in product development. Our decade-long investments in technology and talent, combined with a robust leadership team, have built a scalable platform that uniquely positions us for aggressive growth in 2025 and beyond. With significant operating leverage now within reach, we’re poised for an exciting, high-growth, and profitable future.”

Third Quarter 2024 and Recent Business Highlights

Launched its newest games and Remote Gaming Server (RGS) technology with Caesars Digital in Pennsylvania and Ontario. The launch marked the expansion of Bragg’s existing partnership with Caesars Digital, following earlier launches in New Jersey and Michigan respectively, doubling the number of states/provinces in which Bragg content is offered on Caesars Palace Online Casino and Caesars Sportsbook & Casino.
Launched its newest games and RGS technology with FanDuel in New Jersey, adding to its existing distribution with the leading North American operator in Michigan, Pennsylvania, Connecticut and Ontario
Post-quarter end, the Company additionally launched its newest games and RGS technology with bet365 in New Jersey, following on from its second quarter launch in Pennsylvania, and an earlier launch in Ontario with the major global iGaming operator
Launched HardRockCasino.nl in the Dutch market, supplying its cutting-edge player account management (PAM) software to the brand. The agreement is Bragg’s 6th PAM customer in the Netherlands, reinforcing Bragg’s status as the leading technology and content supplier in the Dutch market
Launched the Kambi sportsbook on 711.nl, adding an additional revenue-generating product stream to a key PAM customer in the Netherlands
Management is pleased to announce the appointment of Robbie Bressler to CFO of Bragg, effective immediately. Robbie had been serving as Bragg’s interim CFO since July 1, 2024.

Additional September 30, 2024 Key Financial Metrics

For the nine-month period ended September 30, 2024, Cash flow generated from operations was EUR 8.4 million (USD 9.4 million), compared to EUR 6.2 million (USD 6.9 million) for the nine-month period ended September 30, 2023.
Cash and cash equivalents as of September 30, 2024 was EUR 11.6 million (USD 13.0 million) and net working capital, excluding deferred consideration, loans payable, and convertible debt, was EUR 11.3 million (USD 12.7 million)

Strategic Alternatives Process Concluded
The Bragg Board announced the strategic alternatives process in March 2024 with the formation of a Special Committee, comprised solely of independent members of the Board. The Committee, together with its advisors Oakvale Capital LLP and Blake, Cassels & Graydon LLP, evaluated a wide range of strategic alternatives for maximizing shareholder value including a potential sale or merger of the Company. Bragg solicited interest from a significant number of potential counterparties and received multiple non-binding proposals.

After careful consideration, the Board, on recommendation from the special committee, unanimously determined that none of the proposals received reflect the Company’s intrinsic value or current and projected financial performance, and therefore elected to conclude its review and disband the Special Committee.

Don Robertson, independent Board member and Chair of the Special Committee, said, “After a comprehensive and exhaustive process, the Committee recommended, and the Board unanimously agreed, that continuing to execute Bragg’s strategic plan as an independent public company is the best approach for maximizing shareholder value. Although the process has now concluded, Bragg’s Board will continue to be open to and consider all opportunities for enhancing shareholder value.”

“Over the past year, our financial performance, cashflow generation and revenue outlook have significantly improved. We remain extremely confident about our business plan, operating strategy, and financial prospects” said Matevž Mazij, Chairman and CEO of Bragg.

Reiterates Full Year 2024 Guidance and 2025 Outlook
Bragg reiterates its 2024 full year revenue guidance range of EUR 102.0-109.0 million (USD 114.2-122.1 million) and its full year Adjusted EBITDA range of EUR 15.2-18.5 million (USD 17.0-20.7 million), noting that the Company is currently tracking to the lower end of guidance.

Bragg is actively advancing a robust pipeline of opportunities that is anticipated to drive strong momentum as we enter 2025. The outlook for 2025 remains positive, with expectations of sustained double-digit top line growth, expanding bottom line margins, and increased operational leverage, further strengthening Bragg’s position in the market. The preceding guidance and outlook constitute forward-looking information within the meaning of applicable securities laws, and is based on a number of assumptions and subject to a number of risks.

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BetMGM and Vegas Golden Knights Announce Multi-Year Partnership Extension

Published

2 days ago

November 15, 2024

George Miller

BetMGM and Vegas Golden Knights Announce Multi-Year Partnership Extension

BetMGM, a leading sports betting and iGaming operator, announced an extension of its partnership with the Vegas Golden Knights through the 2026-27 season. As part of the agreement, BetMGM will continue as an Official Betting Partner of the Vegas Golden Knights with prominent signage on the Knight Tron and throughout T-Mobile Arena as well as co-branded content and exclusive promotions. The partnership also features multiple fan engagement opportunities including watch parties and Toshiba Plaza activations.

“BetMGM is proud to continue our partnership with the Vegas Golden Knights, giving us the opportunity to create memorable moments alongside one of the world’s most passionate hockey fan bases. Las Vegas is BetMGM’s hometown and an integral part of our DNA, so the Golden Knights are a natural fit for our brand.” – Matt Prevost – BetMGM, Chief Revenue Officer.

Throughout the season, BetMGM will host watch parties featuring team mascots at various MGM Resorts destinations. The operator also will plan activations in Toshiba Plaza during select Golden Knights home games where fans can begin the BetMGM mobile app registration process for the chance to win prizes.

“BetMGM is a long-standing partner with the Golden Knights and a brand synonymous with this great city,” said Vegas Golden Knights President and CEO Kerry Bubolz. “We look forward to continue working together on events and activations that we know entertain our fans.”

Lance Evans, SVP Sports and Sponsorships, MGM Resorts, said, “The Vegas Golden Knights play a core role in the Las Vegas sports and entertainment experience and it’s a privilege to welcome both local and visiting fans to our properties before, during and after games. Together with BetMGM, we look forward to co-hosting events that will allow guests to engage with their favorite teams in new and exciting ways.”

BetMGM users can take advantage of the robust offering of prop markets for Golden Knights games this season, frequent in-app odds boosts and the interactive same game parlay betting feature. New BetMGM customers who download the BetMGM app and verify at one of BetMGM’s nine retail sportsbooks within walking distance of T-Mobile Arena will receive a first bet offer of up to $250 paid back in bonus bets if their first bet loses (offer only available in Nevada; bonus bets are non-withdrawable and expire in seven days.) Through the recently launched single account and wallet app upgrade, BetMGM users who sign up in Nevada and reside in other BetMGM U.S. mobile markets can continue to wager upon returning home.

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EVERI STOCKHOLDERS APPROVE ACQUISITION BY APOLLO FUNDS

Published

2 days ago

November 15, 2024

George Miller

Everi Holdings Inc., a premier provider of land-based and digital casino gaming content and products, financial technology, player loyalty solutions, and bingo, announced that its stockholders have voted at a special meeting of Everi stockholders to approve the pending simultaneous acquisition of Everi and the Gaming & Digital business of International Game Technology PLC by a newly formed holding company owned by funds managed by affiliates of Apollo Global Management, Inc. through a merger. As previously announced, pursuant to the terms of the merger agreement, Everi stockholders will receive $14.25 per share in cash for every share of Everi common stock they own immediately prior to the effective time of the merger.

At the Special Meeting, approximately 99.88% of the shares voted were voted in favor of the merger, which represented approximately 71.48% of the total outstanding shares of Everi common stock as of October 3, 2024, the record date for the Special Meeting.

“We are pleased that our stockholders supported our transaction with the Apollo Funds,” said Michael Rumbolz, chairman of the Company’s Board of Directors. “We now shift our focus to the important next steps toward completing the transaction and maximizing value for Everi stockholders.”

Assuming timely satisfaction of necessary closing conditions, the proposed transaction is expected to close by the end of the third quarter of 2025.

The final voting results on the proposals voted on at the Special Meeting will be set forth in a Form 8-K filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”).