Canada
DraftKings Reports Fourth Quarter and Full-Year 2020 Results and Raises 2021 Revenue Guidance
DraftKings Inc. reported fourth quarter and full-year 2020 financial results.
Fourth Quarter 2020 Highlights
For the three months ended December 31, 2020, DraftKings reported revenue of $322 million, an increase of 146% compared to $131 million during the same period in 2019. After giving pro forma effect to the business combination with SBTech (Global) Limited (“SBTech”) and Diamond Eagle Acquisition Corp. which was completed on April 23, 2020, as if it had occurred on January 1, 2019, revenue grew 98% compared to the three months ended December 31, 2019.
“With a favorable fourth quarter sports calendar and strong marketing execution, DraftKings was able to generate tremendous customer acquisition and engagement that propelled us to $322 million in fourth quarter revenue, a 98% year over year increase,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board. “In the fourth quarter of 2020, we saw MUPs increase 44% to 1.5 million and ARPMUP increase 55% to $65. We are raising our revenue outlook for 2021 due to our expectation for continued growth, the outperformance of our core business and newly launched states that were not included in our previous guidance.”
Favorable Sports Calendar and Strong Customer Engagement Drove Q4 Results
- Monthly Unique Payers (“MUPs”) for our B2C segment increased 44% compared to the fourth quarter of 2019. On average, 1.5 million monthly unique paying customers engaged with DraftKings each month during the fourth quarter. The increase reflects strong unique payer retention and acquisition across DFS, OSB and iGaming. For 2020, MUPs increased 29%, which includes the impact of COVID-19 on our MUPs for Sportsbook and DFS primarily during the second quarter and early in the third quarter.
- Average Revenue per MUP (“ARPMUP”) was $65 in the fourth quarter representing a 55% increase versus the same period in 2019. Our ARPMUP was positively impacted by increased engagement with our iGaming and mobile sports betting product offerings as well as successful cross-selling. For 2020, ARPMUP increased 29%.
Increasing 2021 Revenue Guidance
- DraftKings is raising its fiscal year 2021 revenue guidance from a range of $750 million to $850 million to a range of $900 million to $1 billion, which equates to year-over-year growth of 40% to 55% and a 19% increase compared to the midpoint of our previous guidance.
- The increase reflects strong performance in the fourth quarter of 2020, substantial user activation due to the effectiveness of our 2020 marketing spend, and the launch of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia. This guidance also assumes that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today.
- Detailed financial data and other information for the fourth quarter and full-year 2020 is available in DraftKings’ Annual Report on Form 10-K, being filed today with the Securities and Exchange Commission (the “SEC”), as well as in a slide presentation that can be accessed through the “Investors” section of the Company’s website at investors.draftkings.com.
DraftKings Grows Its Nation-Leading Mobile Sports Betting and iGaming Footprint
DraftKings expanded its footprint to include mobile sports betting in Tennessee in the fourth quarter of 2020. In 2021, DraftKings launched mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia.
- In November, DraftKings launched mobile sports betting in Tennessee. The state of Tennessee had the best two month launch in U.S. sports betting history with over $300 million in handle in its first two months of operation including 38% month-over-month growth in December.
- On January 1, 2021, DraftKings began mobile registration in Iowa according to state regulations. By 3PM ET on January 5, DraftKings registered more customers via mobile registration than through the entirety of 2020.
- Following successful launches in Michigan and Virginia in 2021 (combined these states represent 6% of the U.S. population), DraftKings is now live with mobile sports betting in 12 states, which is more than any other company in the industry. These 12 states together represent 25% of the U.S. population, a position that DraftKings has achieved less than three years after the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992.
- In 2021, 19 state legislatures have introduced legislation to legalize online sports betting, five state legislatures have introduced legislation to expand their existing sports wagering frameworks and one state legislature has introduced legislation to legalize sports betting limited to retail locations. In addition, four states have introduced iGaming legislation and two states have introduced online poker legislation.
Commercial and Strategic Agreements
DraftKings announced several advantageous commercial and strategic agreements in the fourth quarter that are expected to provide the Company with access to unique and valuable content, intellectual property and marketing assets, including:
- a multi-channel deal with the Mashantucket Pequot Tribal Nation and Foxwoods Resorts Casino, which would provide DraftKings with access for online sports betting ahead of the anticipated launch of legal sports betting in Connecticut, subject to necessary legislative and regulatory approvals. As part of the deal, DraftKings also became the official daily fantasy sports partner of Foxwoods Resort Casino;
- a multi-year agreement with Turner Sports, making DraftKings the exclusive sportsbook and daily fantasy sports provider across select Turner Sports and Bleacher Report properties, excluding NBA programming;
- an agreement with Triller which allowed DraftKings to be the “Official Sports Betting and Fantasy Sports Partner” of the boxing match between Mike Tyson and Roy Jones Jr.;
- a multi-year deal with the Philadelphia Eagles, making DraftKings the Official Daily Fantasy Sports Partner and Official Sports Betting Partner of the team;
- an exclusive, multi-year relationship with Bryson DeChambeau, who became the first active professional golfer to represent DraftKings via an integrated brand, content, marketing, and VIP centric collaboration;
- an agreement with the Detroit Pistons, making DraftKings the team’s exclusive Official Daily Fantasy Sports Partner, as well as an Official Sports Betting and Casino Partner;
- a multi-year deal with the Nashville Predators, making DraftKings the Official Daily Fantasy Sports Partner and an Official Sports Betting Partner of the team;
- the successful launch of a mobile and online iGaming and sportsbook platform for PalaceBet (PalaceBet.co.za) in South Africa, powered by DraftKings’ cutting-edge B2B sports betting and iGaming technology;
- the renewal and extension of our relationship with MansionBet, the Gibraltar-based sport betting brand of the Mansion Group, which will see DraftKings’ B2B technology continue to power the tier one operator’s sportsbook and casino platform; and
- an agreement with InComm Payments to launch an industry-first retail gift card. The launch enables consumers to gift the DraftKings experience to others in $25 and $50 denominations and expands our brand across retail locations nationwide.
Product, Technology and Content
DraftKings’ migration to SBTech continues to be on-track for completion by the end of third quarter of 2021. We also continued to invest in our products and create engaging content:
- maintained the highest DFS app store ratings for both iOS and Android as well as the highest iOS rating for Casino and Sportsbook. As of March 1, 2021, Google is expanding the number of countries where developers can publish licensed real money gaming apps to include the United States. DraftKings’ Sportsbook and Casino apps will be available to download for Android users via the Google Play Store;
- announced a multi-year agreement to become a primary sponsor of the Center for Gaming Innovation, housed within the International Gaming Institute (IGI) at the University of Nevada, Las Vegas (UNLV); and
- developed an original concept show, B/R Drop Zone: DraftKings Big Game Prop Reveal, that provided football fans with an exclusive first glimpse at DraftKings’ proprietary Super Bowl prop bets in a new reveal show which streamed live on the Bleacher Report app.
Environmental, Social and Governance Initiatives
DraftKings raised and donated over $1.6 million to charity through a variety of ESG-related initiatives in 2020. Fourth quarter 2020 and first quarter 2021 highlights include:
- published our first ESG report on February 22, 2021 outlining our views on environmental, social and governance factors and highlighting those factors that are most relevant to our business;
- raised $113,000 to help fund breast cancer research in collaboration with the Larry Fitzgerald Foundation through the second-annual DraftKings Pink ‘Em initiative, a month-long philanthropic effort that featured four charity contests on each NFL Sunday in October. More than 385,000 DraftKings customers participated throughout Breast Cancer Awareness Month this season;
- raised $183,000 through charity DFS contests in support of the Company’s Tech for Heroes initiative, which provides recent and returning veterans and their spouses with free, high-tech skills training in areas like front end web development and cybersecurity; and
- raised $180,000 through charity DFS contests in support of the Community Foundation of Middle Tennessee, which created the Neighbor’s Fund in response to the Christmas Day explosion that occurred in downtown Nashville, Tennessee.
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Hot on the heels of its most attended conference in history, the International Association of Gaming Regulators (IAGR) is excited to announce that its 2025 conference will take place in Toronto, Canada, from October 20 to 23, 2025.
The event will be held in partnership with the Alcohol and Gaming Commission of Ontario (AGCO) at the Westin Harbour Castle, offering stunning waterfront views and a premier, downtown Toronto location.
‘Fresh off the success of our Rome conference, we’re thrilled to continue the momentum with next year’s event in Toronto,’ said Ben Haden, IAGR President.
‘The IAGR 2025 conference promises to be another unparalleled opportunity for our global community to come together, collaborate and shape the future of gaming regulation. We’re looking forward to working with AGCO to bring it all together.’
AGCO CEO and Registrar Dr. Karin Schnarr, added, ‘We’re excited to welcome IAGR and its members to Toronto. This partnership provides a great opportunity to share Ontario’s innovative regulatory practices and foster meaningful discussions that drive positive change in the industry.’
Stay tuned for registration details early next year.
Bombee Global Entertainment Ltd
ESE Entertainment Completes Acquisition of Gaming Production Company, Bombee Americas
ESE Entertainment Inc., a gaming company that provides a range of services to leading video game developers and publishers, has announced that it has acquired Bombee Global Entertainment Ltd. (Bombee Americas), the North American arm of Bombee Event Production AB, (Bombee), a global production company specialized in live production, special effects, broadcast, and event management for the gaming sector.
Bombee has successfully collaborated with ESE to bring its premier event production services and world class customer service to North America and beyond. The North American arm of Bombee, Bombee Americas, will continue to grow and scale in this new organizational structure under ESE, while maintaining its entire team and global support.
Konrad Wasiela, CEO of ESE, said: “Today marks the next stage of ESE—a 2.0 version of our company. With the acquisition of Bombee Americas, we are not only solidifying our presence in North America but also paving the way for growth and innovation in the gaming industry. This is a major step, positioning us to deliver even greater value to our partners and elevate the gaming experience for our clients globally. We’re thrilled about the opportunities ahead and the exceptional talent joining our team.”
Transaction Terms
The Acquisition was completed by way of a share purchase agreement (the SPA) among the Company, Bombee Americas, and the shareholders of Bombee Americas (the Vendors). Pursuant to the SPA, ESE acquired all of the outstanding shares of Bombee Americas in exchange for: (i) $750,000 in cash paid on closing, (ii) $375,000 in cash to be paid six (6) months following closing, subject to customary adjustments based on the working capital of Bombee Americas on closing, (iii) $375,000 in cash to be paid twelve (12) months following closing, and (iv) 30,000,000 common shares of ESE (the Consideration Shares), issued at a deemed issue price of $0.10 per share.
In connection with the Acquisition, the founders of Bombee Americas have signed three-year service agreements and will continue to run the business following the closing, along with the rest of the personnel of Bombee Americas who will remain in place, ensuring a smooth transition of operations. As part of the Acquisition, the Company has acquired the liabilities of Bombee Americas, mainly consisting of customary current obligations incurred in the ordinary course of business for Bombee Americas, which are not expected to have a material impact on the Company’s operations or financial position.
No finder’s fees were paid or payable in conjunction with the Acquisition.
The Acquisition was an arm’s length transaction within the meaning of the policies of the TSX Venture Exchange (the Exchange) and constituted an “Expedited Acquisition” in accordance with Exchange Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets. The Acquisition remains subject to the final approval of the Exchange.
Canada
Suspected Digital Fraud Coming from Canada Up Nearly 11% Since H1 2023, Reveals New TransUnion Analysis
In the first half (H1) of 2024, Canada saw a significant increase in suspected Digital Fraud attempts, with nearly 5.74% of all attempted digital transactions where the consumer was located in Canada involving suspected Digital Fraud, revealed a new TransUnion® (NYSE: TRU) analysis. This is nearly an 11% year-over-year (YoY) rate increase from H1 2023, and TransUnion also documented an 11% increase in the volume of suspected Digital Fraud from Canada during this period, despite a less than a one percent (0.7%) YoY increase in the volume of transactions.
According to a recent TransUnion survey,1 more than half (54%) of Canadians said they were recently targeted by email, phone call or text message fraud attempts. Phishing was the most common scheme type (45%), followed by smishing (42%) and vishing (39%).
The increasing use of digital transactions, combined with rising suspected Digital Fraud attempts are also impacting businesses as they potentially face revenue losses and increased operational costs due to fraud. According to a TransUnion business survey for the H2 2024 Update to the State of Omnichannel Fraud report, 200 Canadian business leaders said their companies lost approximately 6% of equivalent revenue – representing $78 billion – over the past year due to fraud. The most prominent causes of fraud loss cited by them were:
- Scam/Authorized fraud (31%): Dishonest scheme intended to trick a person into giving up something of value (e.g., account access, money, information)
- Account takeover (19%): Unauthorized individuals taking over someone’s online account (e.g., bank, social media, email) without their permission
- Synthetic identity fraud (18%): Use of a combination of personal information to fabricate a person or entity to commit a dishonest act for financial or personal gain
TransUnion also found that suspected Digital Fraud attempts – where the consumer was transacting in Canada and targeted businesses globally – increased on average by 10.5% YoY in H1 2024 compared to H1 2023 and impacted all industries.
Top Three Industries Globally with Highest Rate of Suspected Digital Fraud Attempts Coming from Canada in H1 2024
- Gambling (online sports betting, poker, etc.) – 9.6%
- Retail – 9.2%
- Government – 7.7%
Top Three Industries Globally with Highest YoY Increase (H1 2024 vs H1 2023) in the Rate of Suspected Digital Fraud Attempts Coming from Canada
- Logistics – 172.9%
- Gambling – 79.3%
- Video gaming – 67.8%
“Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences. These findings reveal that despite the good-faith efforts that are being undertaken by companies to identify and prevent fraud to date, fraudsters continue to evolve and it’s vital that fraud prevention methods keep up with the changing times,” said Patrick Boudreau, head of identity management and fraud solutions at TransUnion Canada.
“Businesses that aren’t already doing so should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection as critical components of their fraud prevention programs,” he added.
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