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Let's say the quiet part out loud. Having been involved in the sports betting world for close to 30 years, if we here at Gambling911.com had gotten wind of a sportsbook losing $6 billion in just a two month period, we'd be advising readers to run, not walk, to the nearest exit. Get your money out fast, if you still can.
DraftKings, it appears, has lost $6 billion over that period of time. The difference may be that they appear to have a near endless number of investors and partners. In other words, they are burning through other people's money.
The question remains: Is this strategy sustainable over time?
Blackmrprophet74, CPA posted the Stockholder's Equity report along with the Accumulated deficit, which he highlights.
As of March 31, 24, #draftkings has incurred over $6 billion in loses, management reward themselves above the average means. Has the media or $DKNG investors asked Mr. Robins if his company will ever achieve positive Retain Earnings? @astraffon @stevebrubaker @contessabrewer pic.twitter.com/FlQ03gvT11
— Blackmrprophet74, CPA (@Blackmrphophet) June 6, 2024
"As of March 31, 24, #draftkings has incurred over $6 billion in loses, management reward themselves above the average means. Has the media or $DKNG investors asked Mr. Robins if his company will ever achieve positive Retain Earnings?"
Mr. Robins is Jason Robins, co-founder and CEO of DraftKings.
He also posted: "Taking into account #draftkings Q1 2024 AGR and the state of IL tax hike, $DKNG would lose $12.9M in free cash flow & profitability. Gross Margin compression is real 11.8% decline. Adj EBITDA would decline by 58%. Concerning for investors if MAU decline."
Much of Blackmrphophet's recent posts are aimed at demonizing DraftKings while lifting up the likes of FanDuel and BetMGM.
"Flutter, the parent of #Fanduel has more staff members and senior management then #Draftkings, however, in Q124, $DKNG SBC is 129% higher. Flutter added $14M to the balance sheet via stock options, whereas DK only added $2M. The numbers do not lie."
Flutter, the parent of #Fanduel has more staff members and senior management then #Draftkings, however, in Q124, $DKNG SBC is 129% higher. Flutter added $14M to the balance sheet via stock options, whereas DK only added $2M. The numbers do not lie. @astraffon @stevebrubaker pic.twitter.com/IweAA2qtza
— Blackmrprophet74, CPA (@Blackmrphophet) May 17, 2024
Not surprisingly, there are bound to be detractors who believe he is in cahoots with the competition.
But his tweets and much of the discussion that comes with them from followers is a "must read" for anyone involved in this industry. Dare we say, gamblers should read as well.
Put Em Away MJ writes:
"Their hold % is unsustainable. Their taxes are being increased. There is public momentum that these apps are dangerous and a nuisance to society. There’s a new scandal every season for each sport. Baseball even did it twice in 3 months!"
Radnor Capital tweeted:
"This makes sense - they burnt cash for several years on user acquisition and promos ahead of a massive market opportunity opening up. Now they are starting to harvest. $2bn in EBITDA in CY 2026 with high flow through to free cash flow. Stock trading ~9x that number..."
While some would argue the company is aligned with major sports leagues and are essentially "too big to fail", Gambling911.com long term readers need only go back a little over a decade to recall Full Tilt Poker. A representative of that company once bragged to us that they had pretty much "bought the ACH system". They had a point there, whether exaggerated or not.
In response to these numbers, an industry insider tells us the $6 billion "cumulative' loss on the balance sheet is not really something that occurred over a two month period.
Follow Blackmrprophet74, CPA here
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