Sports technology and entertainment company DraftKings (NASDAQ: DKNG) is continuing to expand its business reach.
The company recently signed meaningful partnerships with The Detroit Pistons to become its exclusive Official Daily Fantasy Sports Partner, as well as an Official Sports Betting and iGaming Partner of the NBA team. In addition, it entered into a multi-channel deal with the Mashantucket Pequot Tribal Nation, setting the stage to deliver access for online sports betting ahead of the anticipated launch of legal sports betting in Connecticut, subject to necessary legislative and regulatory approvals. With this alliance, DraftKings will also become the official daily fantasy sports partner of Foxwoods Resort Casino.
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These deals mark a continued growth path for the company which, on November, 13, reported its financial results for the third quarter of 2020.
For Q3 ended September 30, 2020, the company reported revenue of $133m, an increase of 98% compared to $67m during the same period in 2019.
After giving effect to the business combination with SBTech (Global) Limited and Diamond Eagle Acquisition Corp., as if it had occurred on January 1, 2019, revenue grew 42% compared to the three months ended September 30, 2019.
Having a look at some meaningful metrics, Monthly Unique Payers for the B2C segment increased by 64% compared to Q3 2019. GAAP sales and marketing expense increased to $203 million in the three months ended September 30, 2020. The increase over the third quarter of 2019 was primarily due to being live in seven more states, including Illinois, for Week 1 of the NFL season this year versus Week 1 of 2019.
The company has also raised its fiscal year 2020 pro forma revenue guidance from a range of $500 to $540 million to a range of $540 to $560 million, which equates to year-over-year pro forma revenue growth of 25% to 30% in 2020, despite the epidemic impact on the major sports calendar. This guidance assumes that all announced sports calendars are maintained through the end of the year and that the company continues to operate in states in which they are live today.
During the third quarter, DraftKings launched mobile sports betting in Illinois and iGaming in West Virginia. Following the launch in Tennessee, the company is now live with mobile sports betting in 10 states, which represent 20% of the U.S. Population. They also continue to work with state officials on regulations and licensing in Michigan for sports betting and iGaming and in Virginia for sports betting and expects to launch in these states at the earliest practicable opportunity.
DraftKings also launched a standalone casino app in Pennsylvania and West Virginia, and Best Ball, a new season-long DFS game variant, featuring snake drafts, introduced several new DraftKings-created games for online casino, including new versions of blackjack, roulette and baccarat and made various improvements to the mobile and online Sportsbook.
In Q3, the company announced several commercial and strategic agreements, including the ones with PGA TOUR, Major League Baseball, Chicago Cubs, ESPN, New York Giants, and Colorado Rockies.
Launched in 2012 by Robins, Matt Kalish and Paul Liberman, DraftKings powers sports and gaming entertainment for 50+ operators across more than 15 regulated U.S. and global markets, including Arkansas and Oregon in the U.S. DraftKings’ Sportsbook offers mobile and retail betting for major U.S. and international sports and operates in the United States pursuant to regulations in Colorado, Illinois, Indiana, Iowa, Mississippi, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee and West Virginia. Its daily fantasy sports product is available in 8 countries internationally with 15 distinct sports categories.