DraftKings hinted at a North Carolina launch next year, but Tar Heel bettors may not be offered the type of promotions that we’ve seen in other states launching legal sports betting.
That according to the company during its third-quarter earnings call on Friday morning.
Jason Robins, Chief executive officer of DraftKings, admits that the sports betting company “expects an external marketing decline in 2024” even with a launch in North Carolina coming. That’s because customers in states with established legal sports betting markets deliver revenue, and DraftKings doesn’t feel the need to pour promotional dollars into new markets.
The days of $2,000+ promo offers and bonus bets may never come back, and North Carolina online sports betting fans can likely expect promos worth about a tenth of that figure.
NC launch likely for DraftKings but without as many promos
We do expect to further decline in external marketing next year,” Robins explained on the call, “and that is inclusive of potential launches in North Carolina as well as some other states.”
Robins explained that DraftKings wishes to stay the course and not overreact to new markets. “We want to stay disciplined [and] continue to do what we’ve done all along, and naturally see the user base mature.”
With that said, in North Carolina, Robins and DraftKings will face something they didn’t when Michigan or Kentucky opened their markets. That “something” is ESPN Bet and Fanatics, two sportsbooks emerging as new competitors of established leaders like DraftKings. Those brands will be working hard to secure customer bases, and that could include added promo spend in North Carolina, likely the largest market to launch sports betting in the near future.
Despite the heat from competition, Robins explained that their strategy will still be to be mindful of promotional spend.
“Even with expected increased competition,” Robins explained, “[we] expect new markets to mature in a way we’ve seen in the past.”
While we can’t know what the NC sports betting bonus offer will be, the launch in Kentucky in September may serve as a guide. DraftKings offered as much as $500 in bonus bets for users who lost their first wager.
An upside to the expected lower spend on promotions and marketing in North Carolina is that consumers may see fewer commercials and online advertisements for DraftKings.
DraftKings posts 57% revenue increase in Q3 compared to 2022
The centerpiece of Friday’s earnings call was a wildly successful third quarter where revenue year-over-year grew by 57%. That represents a $790 million increase from Q3 in 2022.
That terrific performance has promoted the company to forecast an expected $3.72 billion in revenue for 2023. DraftKings, which has recently jockeyed for top online sportsbook with FanDuel, expects $4.5 billion to $4.8 billion in revenue in 2024, nearly double the revenue it had in 2022.
Robins cited “customer retention and engagement exceeding expectations” as a reason for the growth in 2023’s third quarter. He mentioned a successful MLB betting season and noted that DraftKings has “acquired 5% of the adult population in Kentucky” following that state’s launch in September.