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DraftKings Reports First Quarter 2021 Results and Raises 2021 Revenue Guidance
DraftKings Inc. reported first quarter 2021 financial results.
First Quarter 2021 Highlights
For the three months ended March 31, 2021, DraftKings reported revenue of $312 million, an increase of 253% compared to $89 million during the same period in 2020. 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 175% compared to the three months ended March 31, 2020.
“DraftKings is off to an outstanding start in 2021,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board. “We continued to make progress and remain on track with the migration to our own in-house proprietary sports betting engine, strengthened our content and technology capabilities with the acquisitions of VSiN and BlueRibbon Software, and invested in further differentiating our product offering with the upcoming rollout of social functionality in our DFS and mobile Sportsbook apps.”
Jason Park, DraftKings’ Chief Financial Officer, added, “Our $312 million in first quarter revenue, 114% increase in MUPs and 48% growth in ARPMUP reflect solid customer acquisition and retention as well as successful launches of mobile sports betting and iGaming in new states. We are raising our revenue outlook for 2021 due to the outperformance of our core business in the first quarter and our expectation for continued healthy growth.”
Strong Customer Retention and Acquisition Drove Q1 Results
Monthly Unique Payers (“MUPs”) for our B2C segment increased 114% compared to the first quarter of 2020. On average, 1.5 million monthly unique paying customers engaged with DraftKings each month during the first quarter. The increase reflects strong unique payer retention and acquisition across Daily Fantasy Sports, Online Sports Betting and iGaming.
Average Revenue per MUP (“ARPMUP”) was $61 in the first quarter representing a 48% increase versus the same period in 2020. Our ARPMUP was positively impacted by increased engagement with our iGaming and mobile sports betting product offerings as well as successful cross-selling.
Increasing 2021 Revenue Guidance
DraftKings is raising its fiscal year 2021 revenue guidance from a range of $900 million to $1 billion to a range of $1.05 billion to $1.15 billion, which equates to year-over-year growth of 63% to 79% and a 16% increase compared to the midpoint of our previous guidance.
The increase reflects solid performance in the first quarter of 2021, continued strong user activation due to the effectiveness of our marketing spend, well-executed launches of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia, and a modest contribution from our recently completed acquisitions. 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 is available in DraftKings’ Quarterly Report on Form 10-Q, 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 Mobile Sports Betting and iGaming Footprint
In the first quarter of 2021, DraftKings launched mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia.
DraftKings is live with online sports betting in 12 states that collectively represent 25% of the U.S. population. DraftKings is live with iGaming in 4 states, representing approximately 10% of the U.S. population.
In 2021, 25 state legislatures have introduced legislation to legalize mobile sports betting, 5 state legislatures have introduced legislation to expand their existing sports wagering frameworks and 1 state legislature has introduced legislation to legalize sports betting limited to retail locations. In addition, 4 states have introduced iGaming legislation and 3 states have introduced online poker legislation.
Three of the states that introduced legislation to legalize mobile sports betting this year – Wyoming, Arizona and New York – have already enacted mobile sports wagering laws. Maryland has made significant progress with a mobile and retail sports wagering bill passing the legislature and now pending action from the Governor. The three states that have enacted mobile sports wagering laws this year represent 8% of the U.S. population and bring the percentage of the population with legalized mobile sports betting to 35%.
Leadership and Board Updates
DraftKings announced the appointment of Gisele Bündchen, environmental activist and philanthropist, as a special advisor to the Company’s Chief Executive Officer and board of directors for environmental, social, and governance (“ESG”) initiatives.
We expanded our executive team with the addition of Brian Angiolet to oversee and optimize content creation and media strategy as the Company’s first Chief Media Officer.
Environmental, Social and Governance Initiatives Continue to Grow
We undertook a variety of internal and external efforts in honor of International Women’s Day to support women entrepreneurs and small business owners throughout March, while also recognizing the day as an official company holiday for our global employees. Customer participation in the Women’s History Month Sports Popularity Pool, which highlighted the greatest athletes and moments in women’s sports, helped generate $300,000 in total donations to several U.S. and global organizations focused on empowering and aiding women entrepreneurs and women-founded small businesses.
We raised $184,000 through charity DFS contests in support of Feeding Texas’ efforts to provide help to those impacted by the winter storms in Texas.
Product Developments, Content Initiatives and Commercial Agreements
The migration to our proprietary in-house back end and trading technology continues to be on-track for completion by the end of the third quarter of 2021.
We are announcing the upcoming rollout of social functionality to our DFS and mobile Sportsbook apps, marking an industry-first innovation to create an integrated social community across sports betting and daily fantasy sports, as fans can interact with each other within a shared, peer-to-peer environment. The product is particularly unique because it amplifies our ability to create an interconnected ecosystem across our consumer products. Features like universal profiles, friends lists, commenting and loyalty/rewards will allow DraftKings to connect users across products.
We acquired Vegas Sports Information Network, Inc. (VSiN), a multi-platform broadcast and content company delivering trusted sports betting news, analysis and data to U.S. sports bettors since 2017.
We acquired BlueRibbon Software Ltd., a leading global jackpot and gamification company that provides platform-agnostic, real-time gamification tools that allow for fully customizable jackpot promotions.
We announced an agreement with DISH Network to bring DraftKings’ sportsbook and daily fantasy experiences directly to DISH customers nationwide, beginning with a first-of-its-kind and patent-pending DraftKings app integration on the DISH TV Hopper platform. The agreement also provided for the subsequent launch of SLING TV’s new exclusive sports betting information channels in collaboration with DraftKings. SLING TV subscribers and SLING Free users can now view real-time game scores and betting odds on the DraftKings Basketball, Baseball and Hockey channels. SLING TV will continue to bring the DraftKings sports betting experience to customers with more sports and expanded offerings in the future.
DraftKings became UFC’s first-ever “Official Sportsbook and Daily Fantasy Partner” in the United States and Canada and will now be able to offer in-game promotions, activations, in-broadcast odds integrations and UFC branding across its daily fantasy and betting products and will possess rights to use official UFC marks and logos.
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Aviatrix and Vibra Solutions Agree Partnership with Focus on Latin America
Aviatrix, the crash game that’s changing the way online casinos engage their players, has partnered with platform provider Vibra Solutions in yet another move that expands its reach in Latin America.
Aviatrix’s push into Latin America has really picked up pace over recent months and that continues with this deal.
Vibra Gaming has established itself as a major player in the region since it was founded in 2020 and later with the launch of Vibra Solutions in 2022, its platforms and content aggregation division. Now operators using its platform will be able to offer customers Aviatrix.
“We’ve long admired the fantastic work Vibra Solutions is doing in growing our industry across Latin America via innovative product development,” the Latin America Head of Business Development for Aviatrix, Gabriela Novello, said. “By working alongside it, we’re able to bring Aviatrix to more players in the region and together write a new chapter in this ongoing growth story.”
“Our commitment to our operator partners is to provide the very best portfolio of games available,” the Chief Commercial Officer for Vibra Solutions, Federico Saini, said. “Some of those we build ourselves but others we onboard via partnerships like this. Aviatrix is one of the most talked about games in the industry at the moment and we couldn’t be happier to be able to offer it to online brands via our platform.”
Aviatrix’s has enjoyed considerable success in Latin America since it was launched a little over a year ago including being named Rising Star in Casino at the SBC Awards LatinoAmerica.
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PG Soft Set to Sponsor Key SiGMA Americas Event
PG Soft, a world-class digital mobile games company, is proud to announce its sponsorship of SiGMA Americas set to take place in Sao Paulo, Brazil, from April 23 to 25. The important iGaming event is being hosted at the Transamerica Expo Center.
As a leading event sponsor, PG Soft will benefit from prominent branding opportunities including the PG Soft logo printed on staff shirts and an exclusive PG Soft logo and video content at the registration table.
This commitment highlights PG Soft’s ambition to amplify its presence in Latin America, particularly the Brazilian market. Before expanding into the jurisdiction, PG Soft completed an in-depth research and analysis project for a true understanding of the local players’ preferences, which included consumer behaviour, purchasing habits and regulatory requirements.
PG Soft has been working on developing bespoke and localised games tailored specifically for the Brazilian audience.
“Brazil represents a wonderful opportunity for PG Soft and we’re proud to partner with SiGMA Americas for this influential iGaming gathering,” a spokesperson for PG Soft said. “We place huge importance on producing localised content, features and promotions that not only align with Brazilian player preferences, but also meet the regulatory requirements.”
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Low6 partners with Choctaw Casinos & Resorts to deliver new interactive game
Low6, the leading gamification innovator, has announced its latest free-to-play partnership with Choctaw Casinos & Resorts by launching Choctaw T-Box, an interactive mobile game for the Invited Celebrity Classic held at Las Colinas Country Club in Irving, Texas, April 19 – 21.
Designed to engage with golf fans throughout the tournament, the unique second screen experience combines an innovative twist to a much-loved game with the thrill of prize draws.
“Choctaw Casinos & Resorts is committed to engaging and entertaining fans in innovative ways,” said Erica Kosemund, senior director of gaming brand and partnerships for Choctaw Casinos & Resorts. “The free-to-play Choctaw T-Box game will give fans an added level of interaction at the Invited Celebrity Classic. Low6 has a track record of delivering first-in-class engaging content and we found them to be a perfect fit for the environment we are looking to achieve.”
Players are issued a 25-squared T-Box card with each square randomised with a different event that may occur at the tournament e.g. “Mardy Fish scores 4 Birdies”. Should the event occur during play, the square is won and players can earn more entries into a Prize Draw with the more squares they win. A single line (5 squares in a row/column/diagonal) is worth 5 bonus entries, a T-shape (top row and centre column) is worth 25 bonus entries and a blackout (all 25 squares) is worth 50 bonus entries.
Fans playing Choctaw T-Box will have a chance to win prizes at the end of each day. Prizes include a package valued at $750 that includes a two-night stay at Choctaw Casino & Resort – Durant, as well as $250 in resort credit. Players can also win $250 in free play. Players must be members of the Choctaw Rewards Club to claim prizes.
Jamie Mitchell, CEO of Low6, said: “We are incredibly excited with the launch of Choctaw T-Box at the Invited Celebrity Classic. It’s a classic game with a unique digital sporting spin that will entertain fans even more throughout the tournament. Our innovative white label product allows brands to successfully activate their sponsorships at sporting events and can be fully customised across any sport.”
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