DraftKings to Offer Single Game Parlay Early Cash Outs
During this past week's earnings call, DraftKings CEO Jason Robins revealed the company is set to offer Single Game Parlay early cash outs. Robins again stressed the importance of parlay products to the company's bottom line.
Robins called the upcoming feature “a critical addition to our offering.”
Not surprisingly, these same game parlays have ensure DraftKings maintains a strong hold percentage. The company anticipates hitting 10.5% in 2024.
It is this higher hold that makes same game parlays controversial when compared to the traditional parlay bet. Parlays are widely regarded as "sucker bets".
Their popularity is based on the high payout odds. A parlay is a collection of two or more teams, in which you must win all of the games to win the game. The problem with a parlay is just that you must win ALL of the games to get paid. So, even if you win three out of four, it will be the same as losing all four; you lose.
DraftKings reported a 53% revenue increase to $1.175 billion in Q1 2024, surpassing expectations and raising its full-year revenue guidance to a midpoint of $4.9 billion. Despite a cash loss of $41 million from operations, the company's adjusted EPS of $0.03 beat expectations of a $0.28 loss per share. DraftKings' stock rose by 2% in after-hours trading following the announcement.
Robins told investors that DraftKings has also seen success in converting sports bettors to online casino players.
“Of course, we are cross-selling between all of our products but we find the much more effective funnel is to acquire them on sports and cross-sell them to iGaming.”
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