DraftKings loses $142.7m on increased technology costs
Operator reported marketing and tech costs were up during 2019 as it hired more engineers and marketed to newly entered states
Annual losses at DraftKings widened by 87% to $142.7m in 2019 on continued platform development and expansion into new states.
Reporting its full-year financial results, adjusted EBITDA loss also increased 68% on the previous year to $98.6m while revenue was up 43% to $323.4m for the year.
DraftKings attributed the revenue increase to its full year of sportsbook and gaming operations in New Jersey, as well as launches in new states.
Sales and marketing expense for 2019 increased by 27% to $185.3m as the firm boosted marketing for its sportsbook and casino apps in newly entered states.
Product and technology expense was also up 70% to $55.9m on an engineer hiring spree across a number of its offices.
DraftKings expects to make a profit in new states between 12 and 36 months after launching, depending on the characteristics of each market, like tax rates and mobile betting restrictions.
In 2019, the operator’s average online monthly unique players (MUPs) rose 14% to 684. The numbers cover players that made a deposit and either placed a bet or a DFS play.
The firm hailed its acquisition and retention efforts in driving player hold rates, as revenue per MUP grew from $31 to $39 YOY in 2019.
“We invest in a variety of marketing channels in combination with personalized customer promotions, most of which can be used across all of our product offerings,” the FY 19 report said.
The results included the firm’s DFS operations.