With more states on the path to legalizing sports gambling, DraftKings Inc. is betting that a big investment in marketing will yield outsize customer growth as the pastime goes mainstream.
The Boston-based sports betting platform on Friday posted big year-over-year gains in its revenue and user base, benefiting from the rollout of its platform in more states. The gains, however, came with significantly higher expenses as DraftKings spent more on marketing, leading to a wider loss.
DraftKings executives said the higher marketing spending was important to raising customers’ awareness of the platform as sports betting becomes legal in more places. DraftKings’ loss will likely grow even steeper in the summer months, Chief Financial Officer Jason Park said, as the company opens full-season football betting in three new states.
“The net effect is that we continue to expect to spend significantly more on sales and marketing in 2021 compared to 2020,” Mr. Park said.
In the first three months of the year, DraftKings’ active monthly paid users more than doubled to 1.5 million compared with a year earlier. Average revenue per monthly user rose by 49%, boosting the company’s total revenue to $312.3 million, from $113.4 million a year earlier.
