DraftKings Inc. DKNG appears to be outpacing rivals in the customer acquisition battle across the competitive sports betting landscape. In first-quarter 2025, the company posted robust metrics that point to strong user growth and retention strategies, underpinned by efficient promotional spending and expanding product engagement.
New customer acquisition was consistent with expectations, but what stands out is the efficiency with which DraftKings is scaling. Marketing costs are being optimized as the company continues to benefit from brand equity, improved promotional targeting and favorable advertising conditions in digital media. These dynamics contributed to better gross margins and EBITDA performance despite challenging sports outcomes.
What is helping DraftKings stand apart is its investment in product innovation. More than 50% of the total handle in first-quarter 2025 came from live betting for the first time. This growing engagement reflects the successful integration of acquisitions like SimpleBet and Sports IQ, which enhance real-time wagering and keep users actively engaged. Additionally, DraftKings is seeing a healthy uptick in parlay and same-game parlay adoption, popular bet types with higher structural hold rates.
Even with customer-friendly outcomes dampening actual sportsbook hold (down to 9.5%), structural hold rose to 10.4%, indicating DraftKings' underlying profitability engine is strengthening. Moreover, as newly acquired users mature, promotional intensity declines while contribution profit rises, a pattern DraftKings is managing effectively across jurisdictions.
DraftKings' data-driven, product-led approach is yielding results. With improved live betting features, a loyal user base and scalable promotional spend, the company is well-positioned to maintain its lead in the ongoing customer acquisition war in U.S. sports betting.
How DraftKings Stacks Up Against FanDuel and BetMGM
In the race for sports betting dominance, FanDuel and BetMGM remain DraftKings’ closest competitors, but recent trends show it pulling ahead on multiple fronts.
FanDuel, owned by Flutter Entertainment plc FLUT, continues to lead in market share but is starting to face pressure. DraftKings’ surging live betting handle and product enhancements are narrowing the gap, especially in states where FanDuel once held a clear lead. Unlike FanDuel’s heavier reliance on aggressive promotions, DraftKings is proving more efficient in customer acquisition and retention.
Meanwhile, BetMGM, backed by MGM Resorts International MGM and Entain, has struggled to match DraftKings’ pace in product innovation. Though BetMGM boasts strong iGaming performance, it lags in sportsbook engagement. DraftKings’ seamless integration of acquired tech and rapid adoption of features like same-game parlays and live micro-bets gives it a distinct edge.
DKNG’s Price Performance, Valuation & Estimates
Shares of DKNG have gained 30.3% in the past three months compared with the industry’s growth of 31.2%.
Price Performance
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DraftKings is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-sales ratio of 5.69X.
P/S (F12M)
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The Zacks Consensus Estimate for DKNG’s 2025 and 2026 earnings implies a year-over-year uptick of 226.7% and 61.3%, respectively.
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DKNG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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