Earnings+More - 5 Nov: DraftKings hit by NFL results
Welcome. This afternoon we report on the earnings call and analyst reaction to DraftKings below street consensus numbers this afternoon. If you were forwarded this newsletter and would like to subscribe, click here: DraftKings Q3sThe top line
The Fall: DraftKings’ share price fell over 5% in early trading after it released what one analyst immediately suggested were “lower than expected” revenues. Indeed, street consensus expected revenues of ~$236.9m, the company said the shortfall was due to unfavorable NFL results. Backing away: Looking at the ending of talks with Entain, Robins said that global expansion “is one of the pillars for long-term growth”. He suggested that it was only because of a leak to the press that the talks had to go public due to UK takeover rules; and in a backhanded compliment to Entain, suggested it was still interested even though it has a “lower growth trajectory”. “I think we will continue to look at things out there,” he added. Deep pockets: Comments elsewhere this week have suggested some of the heat might have been taken out of the competitive environment since the start of the NFL season and Robins somewhat concurred. “There has been a little bit of a pullback,” he suggested. Note, DraftKings marketing expenses in Q3 rose to $303.6m, up 49%. But he added that the experience in new states such as Arizona, where the company said customer acquisition costs had been “tremendous”, showed that high spending elsewhere could be a benefit.
Loss leader: Asked whether he was worried about some competitors suggesting that sports-betting could simply be a loss-leader for an igaming operation, Robins was dismissive.
Walk, don’t walk: Robins wouldn’t be drawn on the rumors surrounding New York and whether DraftKings will be among the winning consortia but he did suggest that if awarded a license the company would achieve long-term profitability. “There are a lot of levers we can pull,” he said “I don’t think anyone would want to run unprofitably long-term in any state.” *** A message from our sponsors: Venture capital firm Yolo Investments continues to build one of gaming’s most dynamic portfolios as it eyes up seed and A-stage opportunities across the sector. Its 28-company, €135m AUM gaming fund already houses holdings in fast-growing suppliers and operators, including Green Jade Games and Casino Days. Yolo Investments is also on the lookout for LPs as it looks to scale new concepts, including its high-roller live casino brand, Bombay Club. As a proud sponsor of Earnings+More from Wagers.com, Yolo Investments wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat. On social
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5 Nov: Weekend Edition no.21
Friday, November 5, 2021
Good morning. What's more worrying if you are a DraftKings shareholder? That Jason Robins takes to Twitter to declare “it's not about the money” or that he has a bored ape as his avatar? The
04 Nov: Penn and Bally rely on more than just one bite
Thursday, November 4, 2021
Penn National, Bally Corporation Q3s
4 Nov: MGM *hearts* NY
Thursday, November 4, 2021
MGM Resorts, Golden Entertainment, Aspire Global, Everi, Accel Q3s, Playtech stake-buying, Scientific Games acquisition +More
3 Nov: Caesars readies for full digital assault
Wednesday, November 3, 2021
Caesars Entertainment, Red Rock Resorts Q3s, Reputation Matters round up, New York OSB licenses, Newslines +More
2 Nov: Flutter: competitive US situation easing off
Tuesday, November 2, 2021
Flutter trading update, DraftKings and FanDuel in bidding for the Athletic, Sportradar signs UEFA data deal, Bally's analyst note, Macau GGR October, +More
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