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Item 1. Business

2025-02-14 compared with 2024-02-16 · 72 added, 95 removed, 154 unchanged (52% of the section changed)

We are a digital sports entertainment and gaming company.

We provide users with online sports betting (“Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as retail sportsbook, media and other consumer product offerings.

We are also involved in the design and development of sports betting and casino gaming software for online and retail sportsbooks and iGaming operators.

We provide users with online and retail sports betting (together, “Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as digital lottery courier, media, and other product offerings.

Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences.

We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming, and DFS, as well as media and other online consumer product offerings.

We accomplish this by creating an environment where our users can find enjoyment and fulfillment through Sportsbook, iGaming, and DFS, as well as digital lottery courier, media, and other product offerings.

We are also highly focused on our responsibility as a steward of this new era in real-money gaming.

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Together, these investments have enabled us to create a leading product built on scalable technology, while attracting a user base that has resulted in the rapid growth of our business.

Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable state-level unit economics in sports betting and iGaming and (d) expand our consumer product offerings.

When we launch Sportsbook and iGaming product offerings in a new jurisdiction, we invest heavily in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.

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Our path to profitability on an annual basis is based on the acceleration of positive contribution profit growth driven by increased revenue and gross profit generation from ongoing efficient customer acquisition enabled by the transition from local to regional to national advertising, strong customer retention, improved monetization from frequency and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions.

On a consolidated Adjusted EBITDA basis, we expect to achieve profitability on an annual basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S.

In any given period, we expect to achieve profitability on a consolidated adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S.

adult population that has access to our product offerings and the other factors summarized in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.

During the fiscal years ended December 31, 2023, 2022 and 2021, we had revenue of $3,665.4 million, $2,240.5 million, and $1,296.0 million, respectively, average monthly unique payers (“MUPs”) of 2.7 million, 1.9 million, and 1.5 million, respectively, and average revenue per MUP (“ARPMUP”) of $113, $96, and $67, respectively.

Refer to the section entitled “Key Performance Indicators” within Management’s Discussion and Analysis of Financial Condition and Results of Operations included herein for additional information regarding our MUPs and ARPMUP.

During the fiscal years ended December 31, 2024, 2023, and 2022, we had revenue of $4,767.7 million, $3,665.4 million, and $2,240.5 million, respectively;

average monthly unique payers (“MUPs”) of 3.7 million, 2.7 million, and 1.9 million,

respectively, average revenue per MUP (“ARPMUP”) of $106, $113, and $96, respectively;

Sportsbook Handle of $48.1 billion, $37.4 billion, and $23.4 billion, respectively;

and Sportsbook Net Revenue Margin of 6.0%, 5.6%, and 4.4%, respectively.

Refer to the section entitled “Key Performance Indicators” within Management’s Discussion and Analysis of Financial Condition and Results of Operations included herein for the definition of and additional information regarding our MUPs, ARPMUP, Sportsbook Handle and Sportsbook Net Revenue Margin.

Our Product Offerings

Our revenues are predominantly generated through our three online gaming product offerings — Sportsbook, iGaming, and DFS.

For Sportsbook and iGaming, we operate under both our DraftKings brand and our GNOG brand.

We consider these three product offerings to be of a similar product class, and together they accounted for 96%, 94%, and 88% of DraftKings’ revenues for the fiscal years ended December 31, 2023, 2022 and 2021, respectively.

DFS, which was our sole product offering until 2018, historically drove our results;

however, since we launched Sportsbook and iGaming in 2018, states where Sportsbook and iGaming are operating have accounted for a rapidly growing proportion of our users, which has contributed, in part, to our revenue growth.

In addition to our three online gaming product offerings, we also offer non fungible tokens (“NFTs”) on DraftKings Marketplace (“Marketplace”), NFT-based DFS-style contests, gaming software services, and advertising and sponsorship packages to targeted advertisers across our DFS product offering, free games, and media content.

Below is a description of each of our primary product offerings and services:

Online Gaming Product Offerings

Our revenues are predominantly generated through two product offerings — Sportsbook and iGaming.

These two product offerings accounted for 93%, 91%, and 83% of DraftKings’ revenues for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.

In addition to our two primary product offerings, we also offer DFS, digital lottery courier, and advertising and sponsorship packages to targeted advertisers across our DFS product offering, free games, and media content.

Below is a description of each of our significant product offerings and services:

Sportsbook - Sportsbook engages consumers in their sports viewing experience.

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Our Sportsbook revenue is generated by setting odds that are intended to provide a built-in theoretical margin for each proposition offered to our users.

While the actual betting patterns of our users and outcomes of individual events may cause short-term volatility in our revenue and profitability, we believe we can deliver a stable and attractive betting win margin over the long term.

Revenue is realized by taking the settled handle for betting markets that have been resolved and subtracting the payouts for these betting markets such that the difference is our gross revenue, or “hold.”

iGaming - iGaming, or online casino, product offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat and slot machines.

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Our iGaming product offering consists of a combination of games that we have built in-house and licensed content from suppliers such as International Gaming Technology, iForium, Light & Wonder Inc., Spin, and Evolution for live dealer services.

The latter are subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the gaming revenue generated from their respective casino games played utilizing our technology.

The latter are subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of our gaming revenue generated from their respective casino games played utilizing our technology.

In exchange, DraftKings receives a limited license to offer the games to users in jurisdictions where use is approved by regulatory authorities.

Revenue generated through our self-developed major casino games such as blackjack results in decreased overall revenue share payments as a percent of revenue.

Revenue generated through our self-developed major casino games, such as blackjack, results in higher retained revenue by DraftKings.

Daily Fantasy Sports - Since our launch, we have monetized our DFS product offering by facilitating peer-to-peer play, whereby contestants compete against each other for prize money.

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Our revenue from DFS consists of the difference between the entry fees collected and the amounts paid out to contestants as prizes in a period.

Other Consumer Product Offerings

Retail Sportsbook - In addition to our online Sportsbook, we also maintain retail distribution in thirteen states , in which our retail revenue is subject to individual agreements with third parties that provide for a revenue share.

Retail distribution leverages the foot traffic for existing casino and other properties to convert their customers to engage with our retail sportsbook while on the premises.

Similar to our online Sportsbook, retail sportsbook revenue is realized by taking the settled handle for betting markets that have been resolved and subtracting the payouts for these betting markets such that the difference is our gross revenue, or “hold.”

Digital Lottery Courier - Our digital lottery courier product offering facilitates the purchase of official state lottery tickets on behalf of customers through a mobile application or website.

Revenue is earned primarily from service fees for processing and fulfilling ticket orders, along with commissions earned from state lotteries on ticket sales and certain winning tickets, where applicable.

Revenue is not recognized from the face value of lottery tickets or customer prize winnings, as the service acts solely as a courier and assumes no risk from game outcomes.

Media, Advertising and Sponsorship - Our advertising packages range from standard ad placements and background ad placements to more high-touch integrations, such as sponsored DFS contest series or custom site takeovers.

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Each advertising package is bespoke, and we offer each client a custom “menu” of advertising options, which include online media (such as display, video and audio advertisements and page and “skin” sponsorship takeovers), custom content, including branded video content, live events such as sponsored watch parties and sponsored free or paid games, including daily fantasy, pick’em and bracket games.

Each advertising package has a different pricing model, with a variety of factors affecting the pricing of a particular package including, but not limited to, (i) the sport to which the package relates and (ii) the demand for, and supply of, the individual package components.

Each advertising package has a different pricing model, with a variety of factors affecting the pricing of

a particular package including, but not limited to, (i) the sport to which the package relates and (ii) the demand for, and supply of, the individual package components.

Sponsorships and custom-built games and content typically have fixed fee pricing.

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Each time a consumer sees an advertisement while playing, watching, reading or listening to a piece of content or playing a game, an impression is counted.

DraftKings Marketplace - We launched DraftKings Marketplace during the third quarter of 2021.

Marketplace is a NFT ecosystem designed for mainstream accessibility that offers curated initial NFT drops (“Primary Sales”) and allows owners of NFTs on Marketplace to list their NFTs for sale to other Marketplace customers (“Secondary Sales”).

Once marked for sale with a chosen selling price, the NFT will appear on the Marketplace secondary market.

Customers can browse all available NFTs within the secondary market and can opt to purchase based on the selling price.

The revenue we earn on Primary Sales and Secondary Sales is based on a specific percentage of the gross value of each such sale.

We also offer NFT-based DFS-style contests through our Reignmakers franchise.

Gaming Software Services

We supply business-to-business sports betting and iGaming services globally, primarily in Europe and the United States, for various gaming operators and government-run lotteries.

Our gaming software services are primarily comprised of the operations of SBTech (Global) Limited (“SBTech”), which we acquired on April 23, 2020, with principal activities involving the design and development of sports betting and casino gaming software.

Our services are delivered through our proprietary software, and our complementary service offerings include trading and risk management and support for reporting, customer management and regulatory reporting requirements.

Our gaming software services generate revenue from operators by providing sports betting and integration to iGaming content directly to operators in exchange for a share of operators’ revenues.

Offsetting the revenues attributable to our Sportsbook, iGaming, DFS, and Marketplace product offerings is the portion of gross revenue that we allocate to new and existing user incentives and promotions, which are awarded as a result of game play or at our discretion, through loyalty programs, free plays, deposit bonuses, discounts, rebates or other rewards and incentives.

These offsets can be redeemed across multiple product offerings and are generally used to acquire new users, reactivate prior users and increase monetization from active users;

therefore, these offsets are not directly attributable to a specific product offering, but rather attributable at a customer level.

DraftKings Marketplace - We launched DraftKings Marketplace (“Marketplace”) during the third quarter of 2021.

Marketplace was a NFT ecosystem designed for mainstream accessibility that offered curated initial NFT drops (“Primary Sales”) and allowed owners of NFTs on Marketplace to list their NFTs for sale to other Marketplace customers (“Secondary Sales”).

Once marked for sale with a chosen selling price, the NFT appeared on the Marketplace secondary market.

Customers could browse all available NFTs within the secondary market and could opt to purchase based on the selling price.

The revenue we earned on Primary Sales and Secondary Sales was based on a specific percentage of the gross value of each such sale.

We also offered NFT-based DFS-style contests through our Reignmakers franchise.

The Marketplace and Reignmakers franchise product offerings were discontinued in the third quarter of 2024.

Reducing the revenues attributable to our Sportsbook, iGaming, DFS, digital lottery courier, and Marketplace product offerings is the portion of gross revenue that we allocate to new and existing user incentives and promotions, which are awarded as a result of game play or at our discretion, through loyalty programs, free plays, deposit bonuses, discounts, rebates or other rewards and incentives.

These incentives and promotions can be redeemed across multiple product offerings and are generally used to acquire new users, reactivate prior users and increase monetization from active users;

therefore, these incentives and promotions are not directly attributable to a specific product offering, but rather attributable at a customer level.

We leverage our return-on-investment models that are based on gross profit paybacks, lifetime value, player segmentation and customer and revenue retention to determine appropriate promotional levels.

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We build recommendations by identifying the type of contests that a contestant is most likely to enter, along with the entry fee and prize structure that he or she will find most appealing.

In addition, contest-pacing algorithms identify contests that might present a financial exposure and increase the contests’ visibility within the product appropriately.

In addition, contest-pacing algorithms identify contests that might present a financial exposure and increase the contests’ visibility within the product

appropriately.

Similarly, within our Sportsbook product offering, recommendation engines are used to present betting markets to users based upon their past play history and location.

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Utilizing a blend of analytics and data science as our foundation, we leverage our marketing to acquire, retain and reactivate users while building a trusted consumer-facing brand.

We use a variety of free and paid marketing channels, in combination with compelling offers and exciting games, to achieve our objectives.

Furthermore, we optimize our marketing spend using data collected since the beginning of our operations, as well as additional data that we collect from vendors, partners and data providers.

We use a variety of free and paid marketing channels, in combination with compelling offers and exciting product innovations, to achieve our objectives.

Furthermore, we optimize our marketing spend using data collected since the beginning of our operations, as well as additional data from vendors, partners and data providers.

Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the performance of different marketing channels, predicted lifetime value and behavior of users across various product offerings, the location of our users and our estimate of when enabling legislation and regulations for sports betting and iGaming may come to fruition.

Where paid marketing is concerned, we leverage a broad array of advertising channels, including television, radio, social media platforms such as Facebook, Instagram, X and Snapchat, affiliates and paid and organic search, and other digital channels such as mobile display.

For Sportsbook and iGaming, these efforts are concentrated within the specific jurisdictions that have passed enabling legislation and regulations, and in which we operate or intend to operate (which vary on a per-offering basis).

Our marketing expenditures tend to be highly seasonal, with most spend correlating with the start of a sports season and during its playoffs and championships.

In addition to traditional paid advertising channels, we cross-promote our product offerings to our existing user base through internal channels such as mobile push notifications, email and text messages, and external channels such as Facebook, Twitter, Instagram and Snapchat.

Through those channels, we use a combination of content, contests and promotions to engage existing users.

Additionally, we incentivize our users to refer new users through our “Refer-a-Friend” program, offering incentives such as free entries into tournaments or free bets if the referred user ultimately interacts with our product offerings.

Where paid marketing is concerned, we leverage a broad array of advertising channels, including television, radio, social media platforms, search, and influencer marketing.

For iGaming, these efforts are concentrated within the specific jurisdictions that have passed enabling legislation and regulations, and in which we operate or intend to operate (which vary on a per-offering basis).

For Sportsbook and DFS, much of our advertising is national to realize efficiencies on buying media on the national market vs local.

Our marketing expenditures can be highly seasonal based on the sport calendar.

Our digital lottery courier marketing through the Jackpocket brand focuses on draw-based and scratch lottery, similarly oriented around legal jurisdictions while leveraging national spending for efficiencies for draw-based lottery.

In addition to traditional paid advertising channels, we cross-promote our product offerings to our users through internal channels such as email and push notifications.

Additionally, we encourage our users to refer new users through our “Refer-a-Friend” program.

League, Team, and Media Relationships - We engage in relationships with sports leagues, including the NFL, NBA, MLB, NHL, and UFC, and professional sports teams to improve our brand awareness, improve user retention and create unique collaborative integrations for our users.

We also engage in relationships with media partners including Amazon, which selected DraftKings as a sponsor and official pre-game odds provider for Thursday Night Football (“TNF”) on Prime Video in September 2022.

Under the multi-year agreement, TNF on Prime Video will feature DraftKings integrations in its live pregame, including odds and

additional sports betting insights, as well as other TNF-themed offerings.

We also have established partnerships with media entities like Meadowlark Media and iHeartMedia as we seek to grow our audience of U.S.

sports fans and potential users.

We distribute our Sportsbook, iGaming, DFS and Marketplace product offerings through various channels, including traditional websites, direct app downloads and global direct-to-consumer digital platforms such as the Apple App Store and the Google Play store.

Under the multi-year agreement, TNF on Prime Video will feature DraftKings integrations in its live pregame, including odds and additional sports betting insights, as well as other TNF-themed offerings.

We distribute our online sportsbook, iGaming, DFS and digital lottery courier product offerings through various channels, including traditional websites, direct app downloads and global direct-to-consumer digital platforms such as the Apple App Store and the Google Play store.

These two digital platforms are the main distribution channels for our product offerings.

Our DFS product offering is delivered as a free application through both the Apple App Store and Google Play Store and is also accessible via mobile and traditional websites.

Our Sportsbook and iGaming product offerings are primarily distributed through the Apple App Store and a traditional website.

We allow our Android Sportsbook and iGaming users to install our Sportsbook and iGaming product offerings through the Google Play Store and our website.

Our product offerings are delivered as a free application through both the Apple App Store and Google Play Store and are also accessible via mobile and traditional websites.

We derive nearly all of our revenue through product offerings distributed via the Apple App Store, Google Play Store and via traditional websites.

For all of our product offerings, neither Apple nor Google take any revenue share for distribution.

For our gaming software services, Sportsbook and iGaming product offerings and services are distributed online via the Apple App Store, Google Play Store and traditional websites by operators that have licensed such products and services directly from us, while retail product offerings and services are distributed primarily via self-service betting terminals and standalone computer terminals.

Similarly, Apple and Google do not take any revenue share for distributing those product offerings and services.

Intellectual Property

Our business substantially relies on the creation, acquisition, use and protection of intellectual property.

Some of this intellectual property is in the form of software code, patented technology and trade secrets that we use to develop and properly run our Sportsbook, iGaming, and DFS product offerings and related services.

We also create intellectual property that includes proprietary sports betting, iGaming, and DFS-related technology and content, as well as proprietary data acquired from the use of those product offerings.

Some of this intellectual property is in the form of software code, patented technology and trade secrets that we use to develop and properly run our Sportsbook, iGaming, DFS-related, and digital lottery courier product offerings and related services.

We also create intellectual property that includes proprietary sports betting, iGaming, digital lottery courier, and DFS-related technology and content, as well as proprietary data acquired from the use of those product offerings.

While most of the intellectual property we use is created by us, we have obtained rights to use the intellectual property of third parties through licenses and service agreements with those third parties.

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In addition to these contractual arrangements, we also rely on a combination of trade secret, copyright, trademark, trade dress, domain name and patents to protect our product offerings and other intellectual property.

We typically own the copyright to the software code to our content, as well as trademarks under which our Sportsbook, iGaming, and DFS product offerings and related services are marketed.

We typically own the copyright to the software code to our content, as well as trademarks under which our Sportsbook, iGaming, digital lottery courier, and DFS product offerings and related services are marketed.

We pursue the registration of our domain names, trademarks, and service marks in the United States and in locations outside the United States.

Our registered trademarks in the United States include “DraftKings,” and the names of certain of our services and applications, among others.

We operate in the global entertainment and gaming industries, primarily with our Sportsbook, iGaming, DFS, and Marketplace product offerings.

Our registered trademarks in the United States include “DraftKings,” and the names of certain of our brands, product offerings, services and applications, among others.

We operate in the global entertainment and gaming industries, primarily with our Sportsbook, iGaming, DFS, and digital lottery courier product offerings.

Our users face a vast array of entertainment choices.

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The specific industries in which we operate are characterized by dynamic customer demand and technological advances, and there is significant competition among online gaming and entertainment providers.

A number of established, well-financed

companies producing online gaming and/or interactive entertainment products and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

A number of established, well-financed companies producing online gaming and/or interactive entertainment products and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

There has also been consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain larger market share, expand their product offerings and broaden their geographic scope of operations.

Human Capital Resources

As a multinational technology company with o ver 4,400 employees located in six countries, our business success is driven by our highly skilled workforce.

As a multinational technology company with o ver 5,100 employees located in seven countries, our business success is driven by our highly skilled workforce.

With our global technology and product team consisting of over 2,100 employees (which includes over 1,600 engineers), we are well positioned to deliver new, innovative and exciting products to our growing base of customers.

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(i) alignment with DraftKings’ mission/vision and in-role clarity, (ii) manager effectiveness, (iii) growth opportunities, (iv) inclusion, equity and belonging, (v) work-life balance, (vi) rewards and recognition, (vii) enablement and (viii) overall satisfaction.

We have committed to and formalized employee development programs that support inclusion, equity and belonging, and promote creativity and innovation through various leadership and talent management programs.

We have committed to and formalized employee development programs that support belonging and promote creativity and innovation through various leadership and talent management programs.

DraftKings’ talent training programs are designed to provide increased career and internal mobility for our employees, identify development opportunities, and proactively support succession planning.

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DraftKings is subject to various U.S.

and foreign laws and regulations that affect our ability to operate our Sportsbook, iGaming, and DFS product offerings.

and foreign laws and regulations that affect our ability to operate our Sportsbook, iGaming, DFS, and digital lottery courier product offerings.

These product offerings are generally subject to extensive and evolving regulations that could change based on political and social norms and that could be interpreted in ways that could negatively impact our business.

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As of February 12, 2025, 39 U.S.

states, the District of Columbia and Puerto Rico have legalized some form of sports betting.

Of those 37 legal jurisdictions, 32 have legalized online sports betting.

states, the District of Columbia and Puerto Rico have some form of authorized sports betting.

Of those 41 jurisdictions, 33 have legalized online sports betting.

32 of those 33 jurisdictions are live, and DraftKings operates in 26 of them.

As of February 13, 2024, we operate our online sports betting product offering via the DraftKings Sportsbook app in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, West Virginia, Wyoming and Ontario, Canada pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Arizona Department of Gaming, State of Colorado Department of Revenue Division of Gaming, State of Connecticut Department of Consumer Protection, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Kansas Racing and Gaming Commission, the Louisiana Gaming Control Board, the Maine Gambling Control Unit, the Maryland Lottery and Gaming Control Agency, the Massachusetts Gaming Commission, the Michigan Gaming Control Board, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the Ohio Casino Control Commission, the Oregon State Lottery, the Pennsylvania Gaming Control Board, the Tennessee Sports Wagering Council, the Vermont Department of Liquor and Lottery, the Virginia Lottery, the West Virginia Lottery Commission, and the Wyoming Gaming Commission.

As of February 12, 2025, we operate our online sports betting product offering via the

DraftKings Sportsbook app in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, D.C., West Virginia, and Wyoming pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Arizona Department of Gaming, State of Colorado Department of Revenue Division of Gaming, State of Connecticut Department of Consumer Protection, the District of Columbia Office of Lottery and Gaming, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Kansas Racing and Gaming Commission, the Kentucky Horse Racing and Gaming Corporation, the Louisiana Gaming Control Board, the Maine Gambling Control Unit, the Maryland Lottery and Gaming Control Agency, the Massachusetts Gaming Commission, the Michigan Gaming Control Board, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the North Carolina State Lottery Commission, the Ohio Casino Control Commission, the Oregon State Lottery, the Pennsylvania Gaming Control Board, the Tennessee Sports Wagering Council, the Vermont Department of Liquor and Lottery, the Virginia Lottery, the West Virginia Lottery Commission, and the Wyoming Gaming Commission.

Additionally, DraftKings operates its online sports betting product offering in the Canadian province of Ontario pursuant to a registration approved by the Alcohol and Gaming Commission of Ontario.

In addition to our DraftKings-branded sports betting product offering, we operate our GNOG-branded online sports betting product offering via the GNOG Sportsbook app in Arizona and New Jersey pursuant to our licenses granted by the respective state’s gaming or lottery commission as described above.

We also operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey and Washington pursuant to state and/or tribal regulatory regimes.

In addition to our DraftKings-branded sports betting product offering, we operate our GNOG-branded online sports betting product offering via the GNOG Sportsbook app in Arizona and Washington pursuant to our licenses granted by the respective state’s gaming or lottery commission as described above.

We also operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington and Wisconsin pursuant to state and/or tribal regulatory regimes.

On May 14, 2018, the U.S.

Supreme Court issued an opinion determining that the Professional and Amateur Sports Protection Act (“PASPA”) was unconstitutional.

PASPA prohibited certain states from “authorizing by law” any form of

sports betting.

PASPA prohibited certain states from “authorizing by law” any form of sports betting.

In striking down PASPA, the U.S.

Supreme Court opened the potential for state-by-state authorization of sports betting.

Several states and territories, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, Washington, D.C., West Virginia, and Wyoming already have laws authorizing and regulating some form of sports betting online or in brick-and-mortar establishments.

Several states and territories, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, Washington, D.C., West Virginia, Wisconsin and Wyoming already have authorized some form of sports betting online or in brick-and-mortar establishments.

Sports betting in the United States is subject to additional laws, rules and regulations at the state level.

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and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

Any change in existing regulations or their interpretation, or the regulatory climate applicable to our products and services, or changes in tax rules and regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.”

As of February 13, 2024, we operate our DraftKings-branded iGaming product offering in New Jersey pursuant to a transactional waiver granted by the New Jersey Division of Gaming Enforcement, in Connecticut pursuant to a license granted by the State of Connecticut Department of Consumer Protection, in Michigan pursuant to a license granted by the Michigan Gaming Control Board, in the Canadian Province of Ontario pursuant to a license granted by the Alcohol and Gaming Commission of Ontario, in Pennsylvania pursuant to a license granted by the Pennsylvania Gaming Control Board, and in West Virginia pursuant to a license granted by the West Virginia Lottery.

In addition, we operate our GNOG-branded iGaming product offering in Michigan, New Jersey, Pennsylvania and West Virginia, subject to licenses or transactional waiver issued by the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement, Pennsylvania Gaming Control Board and the West Virginia Lottery, respectively.

Any change in existing regulations or their interpretation, or the regulatory climate applicable to our product offerings and services, or changes in tax rules and regulations or interpretation thereof related to our product offerings and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.”

As of February 12, 2025, we operate our DraftKings-branded iGaming product offering in New Jersey pursuant to a license granted by the New Jersey Division of Gaming Enforcement, in Connecticut pursuant to a license granted by the State of Connecticut Department of Consumer Protection, in Michigan pursuant to a license granted by the Michigan Gaming Control Board, in the Canadian Province of Ontario pursuant to a license granted by the Alcohol and Gaming Commission of Ontario, in Pennsylvania pursuant to a license granted by the Pennsylvania Gaming Control Board, and in West Virginia pursuant to a license granted by the West Virginia Lottery.

In addition, we operate our GNOG-branded iGaming product offering in Michigan, New Jersey, Pennsylvania and West Virginia, subject to licenses issued by the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement, Pennsylvania Gaming Control Board and the West Virginia Lottery, respectively.

Generally, online gambling in the United States is only lawful when specifically permitted under applicable state law.

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No violation of the UIGEA, the Illegal Gambling Business Act or the Travel Act can be found absent a violation of an underlying state law or other federal law.

In addition, the Wire Act of 1961 (the “Wire Act”) provides that anyone engaged in the business of betting or wagering knowingly using a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, may be fined or imprisoned, or both.

communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, may be fined or imprisoned, or both.

However, the Wire Act notes that it shall not be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country in which such betting is legal.

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As of February 12, 2025, our DFS product offering is available in 44 U.S.

states, the District of Columbia, certain provinces in Canada and the United Kingdom.

states, the District of Columbia, and certain provinces in Canada.

In those states that currently require a license or registration for DFS operations, DraftKings has either obtained the appropriate license or registration or a provisional license from the relevant regulatory authority or is operating pursuant to a grandfathering clause that allows operation pending the availability of licensing applications and subsequent grant of a license.

DraftKings also has a foreign DFS license in the United Kingdom.

Various state laws and regulations govern our licenses, but generally such state laws and regulations define paid fantasy sports, establish the rules concerning the application and licensure procedures for gaming operators in the fantasy sports business and regulate practices for paid fantasy sports deemed to be detrimental to the public interest.

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In the United States, our DFS licenses are generally granted for a predetermined period of time (typically ranging from one to four years) or require documents to be supplied on a regular basis in order to maintain our licenses.

Outside the United States, we maintain a DFS license in the United Kingdom.

In the United Kingdom, online gaming and sports betting is subject to the Gambling Act 2005 (the “GA2005”), as amended by the Gambling (Licensing and Advertising) Act 2014, and the regulations promulgated thereunder.

Under the GA2005, entities wishing to offer online sports betting (which for purposes of GA2005 is defined to include DFS) and/or online casino services to persons located in the United Kingdom must first obtain a remote gambling operating license from the Gambling Commission.

We hold a remote-pool-betting operating license authorizing us to offer our DFS product offering to residents of the United Kingdom.

That license may be varied to add further product categories permitting, for example, fixed-odds-sports betting and online casinos.

We also hold a gambling software operating license issued by the Gambling Commission, which authorizes us to develop the DFS software we use.

Our British licenses are not limited by a term, subject to the payment of annual fees and compliance with license conditions.

Gaming Software

Our gaming software services, formerly the operations of SBTech, are licensed in various states in the United States and in the United Kingdom, Sweden, and Belgium.

Additionally, our gaming software is certified in multiple regulated jurisdictions in accordance with local licenses held by operators utilizing our gaming software in these jurisdictions.

As of February 13, 2024, we supplied our SBTech gaming software to U.S operators in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia, and Wyoming, and we supplied retail sportsbook gaming software services in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey and Washington pursuant to state and/or tribal regulatory regimes.

Data Protection and Privacy

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Our compliance program focuses on, among other things, reducing and managing problematic gaming and providing tools to assist users in making educated choices related to gaming activities.

Our gaming software services have been built from the ground up to meet the needs of differing regulatory regimes, including configurable regulatory and responsible gaming controls such as responsible gaming tests, operator alerts on player behavior, deposit limits, betting limits, loss limits, timeout facilities, session limits, reality checks, balance thresholds and intended gaming amounts.

These features allow the operators’ customers to control their gaming and play responsibly.

Responsible and Safer Gaming

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Our website and the information contained therein or linked thereto are not part of this Annual Report.

We make available free of charge through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish them to the U.S.

We make available free of charge through our internet website our annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after we electronically file such material with, or furnish them to the U.S.

Securities and Exchange Commission (the “SEC”).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business