DraftKings is no less and also welcomes promotions, such as free entries to contests. You can earn points for playing which can get you into considerably more challenges. A $2 passage league rewards 8 FPPs, so to open $1 of money, you would need to go through $25 in your own money. DraftKings Quick Summary wp-review How Does DraftKings Work: Overview. As a company DraftKings was formed in 2011 and they focus on a mixture of both daily and weekly Fantasy Sports – Wikipedia We’re going to start with a brief introduction to who DraftKings are and what they are all about. Here are the steps to create a contest: Login to your DraftKings account. Click on the Contest tab. Then on the right-hand side, you will see the option to “Create A Contest”.

Like any aggressive company in the early days of a gold rush, DraftKings reasonably could be assumed to be in the red.

How far, though? Thanks to the preliminary prospectus filed for DraftKings‘ reverse merger to go public and acquire SBTech, the industry now knows.

DraftKings had a net loss of $114.1 million through the first nine months of 2019. That’s on $192 million in revenue. The loss is up 51.8% from the $75.1 million in losses through nine months last year.

Revenue grew 44.3% compared to last year. It’s up primarily due to the launch of online casino games in New Jersey and significant growth for DraftKings Sportsbook, the company represented.

Outlook for 2019 DraftKings revenue

Given its year-over-year quarterly growth, DraftKings should have easily topped 2018’s revenue mark of $226.3 million in 2019. The company had $192 million in revenue through nine months in 2019 compared to $133 million in 2018.

That suggests 2018’s fourth-quarter revenue was $93.3 million. The football season, clearly the most important to daily fantasy sports and sportsbook operators accounted for 41.2% of DraftKings’ 2018 total revenue.

Aside from DFS revenue, DraftKings was mainly ramping up its first mobile sportsbook in New Jersey before launching online casino games toward the end of the year. Both of those businesses should have had a significant contribution during the fourth quarter of this year.

DraftKings is also live in West Virginia and Indiana with mobile sports betting, and in Pennsylvania with mobile betting and online casino. The company had none of those had in the fourth quarter of 2018.

How did DraftKings lose millions?

DraftKings is paying for its successful 2019. The “cost of revenue” expense jumped 143.5% to $64.7 million in the nine months through September 2019.

About $6.2 million of that expense growth is from revenue share agreements with DraftKings Sportsbooks‘ land-based casino partners.

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Another $12.4 million in higher fees related to platform costs shows one of the benefits of the SBTech deal. Those fees primarily relate to third-party services, like the Kambi sportsbook platform.

Sales and marketing also had a significant drag on revenue. This is a given considering DraftKings Sportsbook is in a growth phase with a heavy marketing push for new customers leading up to and into the first few weeks of football season.

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Sales and marketing costs rose 16.6% to $124.9 million in the first nine months of last year. Those costs, as a percentage of revenue, improved in the previous year to 65% from 80.5% the prior year.

Varied offerings bring in more customers

DraftKings felt the positive impact that a bit of diversity in offerings can bring to a business last year. The average number of monthly unique paid users was 565,000 through the first nine months of 2019. That’s up 16.5% from the prior year’s 485,000 average.

The average revenue from those users increased as well. The average paid user had contributed $38 in revenue each month, up from $30 per month in 2018.

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That clearly has to do with how differently DraftKings’ 2019 shook out compared to 2018. DraftKings was still mostly a DFS operator in 2018 with smaller sports betting and even smaller iGaming impact mixed in.

Path to profitability

Becoming a profitable company basically depends on how fast states latch on to sports betting and iGaming, DraftKings said.

Each new state should achieve a positive contribution profit (defined as revenue minus cost of revenue and direct advertising costs) in one to two years, though it could take as long as three years in some states.

So being profitable will depend on how quickly states can go live and how quickly those states can then ramp up operations. DraftKings will continue to manage its fixed costs when it comes to market entries to ensure it has marketing flexibility.

The merger with SBTech will further improve profitability through the elimination of third-party platform costs and new opportunities, DraftKings said.

One of those new opportunities could include providing the SBTech platform to other branded online and retail sports betting operators.

SBTech results, so far

The prospectus also included SBTech’s results through the first nine months of 2019.

Revenue and net profit are both down due to the end of a customer relationship as of September 2018. Revenue fell 1.8% to €68.3 million though net profit after tax fell 67.2% to €6.2 million.

European customers accounted for 38% of SBTech’s revenue through September 2019.