DraftKings (DKNG) Craig-Hallum’s 4th Annual Online Gaming Conference summary

Market trends and competitive landscape

• U.S. online sports betting (OSB) market is experiencing strong engagement and growth, with no mid-season lull and high traction across all sports, especially NBA.

• U.S. market is expected to surpass the U.K. in size, benefiting from advanced technology and a broader entertainment spend per capita.

• Market remains top-heavy, with the top two operators maintaining dominance; new competitors have struggled to gain significant share.

• Tier two competitors can survive profitably if they operate rationally and focus on niche markets.

• Further consolidation at the top is expected, but long-tail competitors will persist.

Product innovation and technology

• Significant progress has been made in closing the technology and product gap with leading competitors, now operating from a position of strength.

• In-game betting is a major focus, with expectations for continued growth and differentiation through feature enhancements.

• Hold rate improvements are a key value driver, with ongoing efforts to increase it by 25-100 basis points.

• Promo efficiency and customer acquisition costs are industry-leading at current scale.

• Product roadmap for 2025 includes major accelerations in live betting and further hold rate optimization.

Regulatory environment and taxation

• State tax rates remain a critical issue; Missouri's below-average 10% tax rate is seen as a positive trend.

• High tax burdens, such as New York's, are unsustainable and require ongoing industry education for policymakers.

• Companies are paying close to $1.7 billion in taxes on under $300 million in EBITDA, highlighting the need for balanced regulation.

• Legislative momentum is expected to increase in 2025, with potential for new iGaming bills.