In addition, the company is increasing its offerings of online casino games (iGaming) to supplement its mobile sports betting business.
The company was attractive for a purchase in early 2021. The stock declined in late 2020 though the business was doing well. In addition, several states in the U.S. were working toward legalizing or liberalizing gambling, providing substantial potential new markets for the firm.
Events in the first half of 2021 justify buying DKNG in early 2021, and the case for holding the stock or making new purchases is strong.
In the first quarter of 2021, DKNG’s revenue increased 175% and was well above consensus analysts’ estimates. The company’s unique paying customers increased by 114% over 12 months to 1.5 million monthly.
More importantly, the company says that is has had success cross-selling its customers. Sports betting customers are being attracted to the iGames, and iGames customers are engaging with sports betting.
Several states liberalized their online gambling and gaming laws, and DKNG says it has had successful launches of its operations in new states in the first quarter.
The company raised its estimates of full-year revenue. Draftkings has shown it has the ability to attract new customers to both its sports betting and casino games offerings, retain a high percentage of customers, and attract customers in one segment to the other segment of its offerings.
In addition, legal gambling is likely to expand to additional states, providing new markets and opportunities for the company.
While many companies would like a portion of the growing online betting and gambling markets, DKNG has unique advantages. It has established a strong brand and has proprietary technology that give it a strong market shares.
Despite still generating losses on operations, the company has the financial resources to continue funding growth and attracting more customers. I recommend purchases of DKNG.