It seems the rest of the states with online casinos are coming to the same conclusion as West Virginia.
DraftKings, the number-one West Virginia online casino, announced $770 million in revenue during its Q1 2023 earnings call on Thursday, up 84% year-over-year from $417 million in Q1 2022.
With the news, DraftKings CEO Jason Robins said, the company became the number-one iGaming operator, with an estimated 26% market share of gross gaming revenue (GGR).
Robins said, “On the iGaming side, we’ve been chasing down BetMGM. And for the first time, in Q1, we’re able to pass them for number one market share in iGaming, which we’re very proud of.”
DraftKings CFO Jason Park added that the company outperformed Q1 expectations and is increasing the midpoint of its FY ’23 revenue guidance from $2.95 billion to $3.185 billion. Its FY adjusted EBITDA guidance midpoint improved from -$400 million to -$315 million, and the company expects to achieve a breakeven adjusted EBITDA by the end of 2023’s second quarter.
DraftKings Casino outpacing nationwide growth
DraftKings’ growth comes alongside market growth in iGaming and online sports betting nationwide.
New markets continue to emerge ripe for the taking, and new competitors are entering already-existing markets. Still, consolidation is occurring naturally, as opposed to through mergers and acquisitions.
The most recent evidence comes from Massachusetts, which legalized online sports betting on March 10 and saw DraftKings ($257.6 million) and FanDuel ($181.1 million) combine for 80% of total handle ($568.1 million) in the first three weeks.
Park said the industry has a lot of momentum that has contributed to successful launches in recent states like Massachusetts, Ohio, and Maryland. National advertising played a role in acquiring early sign-ups in the past year, especially during football season, compared to 2020 and 2021.
FanDuel remains the number-one sportsbook in the US, but the Boston-based DraftKings leveraged its hometown edge in Massachusetts.
“I think New England in particular, we tend to love our own here,” said Robins. “So we feel like that was a really good angle for this market, and it worked.”
DraftKings Casino already on top in West Virginia
West Virginia is one of just six states with legal online casinos and online sports betting. BetMGM and FanDuel are the respective top dogs for iGaming and sports betting in most markets.
But not West Virginia.
Although the West Virginia Lottery does not break down individual revenue numbers by the operator, it still provides segmented data for the state’s land-based casinos.
West Virginia 2023 iGaming revenue
| Land-Based Casino | CY 2023 Wagers | CY 2023 Revenue | FY 2023 Wagers | FY 2023 Revenue |
|---|---|---|---|---|
| Hollywood Casino | $586.3 million | $19.1 million | $1.4 billion | $42.5 million |
| The Greenbrier | $631.2 million | $22.8 million | $1.5 billion | $54.6million |
For sports betting, Hollywood Casino includes DraftKings, PointsBet, and Barstool
| Land-Based Casino | CY 2023 Wagers | CY 2023 Revenue | FY 2023 Wagers | FY 2023 Revenue |
|---|---|---|---|---|
| Hollywood Casino | $72 million | $4.6 million | $181.5 million | $15.6 million |
| The Greenbrier | $73.7 million | $9.1 million | $187.3 million | $23 million |
DraftKings online casino WV is the only iGaming operator underneath Hollywood Casino. Meanwhile, The Greenbrier’s license accounts for FanDuel and BetMGM.
Hollywood falls just shy of FanDuel and BetMGM’s combined numbers in both verticals. Given each’s prominence, this suggests that DraftKings is outperforming its top two competitors for iGaming and sports betting handle in the West Virginia market.
DraftKings has also increased its iGaming revenue market share since January 1. However, a lower sportsbook hold percentage has affected its GGR relative to The Greenbrier’s operators.
Look out, FanDuel?
Robins spoke about surpassing BetMGM in iGaming and looking to do the same with FanDuel in online sports betting.
“First, we don’t take anything for granted. So we assume that there’s always going to be a very competitive market and that we don’t assume we’ve won anything or that we have anything that we can bank on yet. And I think that keeps a lot of the edge and the competitive drive with the company. No doubt having a big competitor in FanDuel also is helpful.”
He continued to say that FanDuel gave DraftKings a target to chase down, similar to BetMGM in iGaming.
Looking forward, Robins said the company has begun to refine its playbook, optimizing it through launches in more than 20 states. DraftKings has also expanded its live betting and same-game parlay offerings, adding even more to its bottom line and helping to cement itself as a leader in emerging markets.
But a leader and the leader are two different things.
As DraftKings innovates and evolves, FanDuel and others will do the same. And BetMGM will try to reestablish its position in iGaming.
“We always have to be serving the customer and innovating and creating new products and new features,” said Robins. “And over time, we believe that that’s the key to driving loyalty … just best product, best customer experience.”
Over the next year or two, FanDuel’s lead will be tough to surmount. That might be different in five or 10 years, though.
Even if DraftKings fails to get or stay on top, it remains the favorite to hold second place in both verticals. A lot of companies would love to make that claim.
