DraftKings Earning Report for Q3 Leads to Rise in Stock Price

DraftKings is one of the major online gambling platforms in the United States. Leading the way in daily fantasy for several years now, the company has recently decided to jump into sports betting and the online casino scene. Both online casinos and online sports betting have been making waves in America as several states each year decide to legalize. DraftKings is seemingly always at the forefront of these states as they legalize, offering its platforms as soon as the law and regulatory bodies allow.

Q3 Earning Report for DraftKings

It was a positive day for the company. While the company reported a loss of 98 cents a share, way below the expected loss of 63 cents, the adjusted loss was only 57 cents a share, actually beating projections, according to Refinitiv. The expected revenue was $132.2 million, according to Refinitiv, and DraftKings was able to report $132.84 million in revenue. Lastly, the major news was that DraftKings is seeing its unique monthly player count in the millions, which the company reports is a 64% increase from last year at this time.

All of this has led to a great day for DraftKings’ stock performance. DraftKings closed out yesterday at around $41.25 a share and today peaked at roughly $44.64 a share. This can quantify just how happy investors were with DraftKings’ earnings report; everyone wanted a piece of the pie this morning.

All this good news should be expected. Several things have been going in DraftKings’ favor. The NBA, MLB, and NFL all resumed action and were playing a hefty amount of games in Q3, not to mention European soccer as well. Then, states like Tennessee went live during this quarter, which would be an obvious boom to player counts for DraftKings as it only competes with FanDuel and BetMGM in the state.

DraftKings’ Future Outlook

If these are the kinds of reports to expect during a massive pandemic in which sports have often been left behind and disposable income is limited, then I cannot imagine how well 2021 could go for DraftKings.

A few states legalized sports betting during the 2020 election season, those being Maryland, Louisiana, and South Dakota. Most experts believe that the company will move in on all the new states and see what it can do to supply sports betting to them.

We will also see a major state in Michigan launching its online sports betting and casinos in the coming weeks. DraftKings has already announced pre-registration for Michigan.

One thing to keep in mind is that while DraftKings works hard in customer acquisition in sports betting and online casinos, it still has an extremely profitable daily fantasy platform that is widely available in the United States. The company’s immediate future looks great.

However, the one thing that would skyrocket the revenue of DraftKings in the coming couple of years is legalization from large states like Texas, Florida, and especially California. These states would provide unheard of betting handles and revenues, and DraftKings would surely capitalize on that.

There is also New York who is in a massive battle to allow online sports betting. Currently, DraftKings has a physical sportsbook in state at del Lago Resort Casino, but online sports betting in the Empire State would be a massive bump up for revenue for DraftKings. Considering that it already has a hold in the state, DraftKings would be able to easily pounce once the online and mobile betting goes through.