DraftKings News Flow: Fresh Capital, Legalization Roadmap, COVID-19 Surge
Capital raise: DraftKings recently completed a successfully upsized capital raise that brought in $620 million of additional cash. The move takes the company’s total cash balance to about $1.1 billion.
Updated guidance: DraftKings now expects 2Q20 revenue between $70 million and $75 million, pointing to strength in iGaming revenue. DraftKings New Jersey iGaming y/y revenue was 126% and 122% in April and May, respectively. Canaccord Genuity now predicts revenue of $72.8 million for 2Q20.
Legalization update: California is the big prize for online sports betting, but the path to legalization has recently become a little less clear. After speaking with sports betting legal expert Daniel Wallach, Canaccord Genuity says legalization in the state is likely delayed until at least 2022.
Cause of delay: Sponsor Senator Bill Dodd is pulling his California sports betting bill due to opposition from Indian gaming tribes, according to Legal Sports Report. LSR points out that Indian tribes opposed the online aspect, and that the first possible launch of California sports betting is September of 2023.
Uncertain return of sports: Investors, driven by the optimism for the return of sports, have piled into DraftKings stock. But a resurgence in Coronavirus is making the future of sports more difficult to predict. California, Texas, and Arizona just reported daily records for COVID-19 cases. With sports at risk, iGaming will continue to be an increasingly important element of DraftKings’ business.l
Casino app launch: DraftKings announced Tuesday the launch of its standalone Casino app in New Jersey. The app will include classics such as Blackjack and Roulette, in addition to new games only found on DraftKings. DraftKings Casino has been embedded within the DraftKings Sportsbook app in NJ since 2018.
