(Gary Coronado / Los Angeles Times via Getty Images) Gary Coronado/Los Angeles Times/Getty Images LAS VEGAS, NV - DECEMBER 15: Fremont Hotel & Casino, left, and Four Queens Resort and Casino along Fremont.

The hope is to gain a loyal and frequent customer, but such promotions eat into short-term profits. The crowded field forces rivals to try to out-promote one another other, often luring them with limited offers of free bets. (PENN), which has a big minority stake in Barstool Sports. (PDYPF) - as well as traditional casinos such as MGM Meanwhile, DraftKings faces tough competition from FanDuel - owned by UK-based sports betting company Flutter Entertainment “Hopefully, baseball will figure this out.” “When games are not being played, that is not positive for us,” Robins said, comparing the possibility of fewer baseball games to the shutdown of nearly all sports that took place in the spring of 2020 at the start of the pandemic. CEO Jason Robins said in an interview with CNN Business that the current lockout in Major League Baseball could be a problem since it may lead to a delayed start and shortened season. And DraftKings also said first-quarter sales would be lower than Wall Street forecasts.Īd spend isn’t the only headwind for DraftKings. Investors are clearly concerned that the company is expected to continue losing money this year as it spends heavily on ads and promotions. That challenge was on full display with DraftKings, whose shares plunged nearly 20% Friday despite sales that topped expectations and a boosted outlook.

But now comes the hard part for companies like DraftKings and FanDuel.īetting upstarts need to spend big bucks to attract new users - but like a gambler chasing a huge payday, companies can easily get in over their heads with marketing and acquisition costs if they’re not careful.

The Super Bowl was a bonanza for the gambling business thanks to new customers from New York, which recently legalized sports betting.

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