What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 653 added, 367 removed, 440 unchanged (70% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

September 30, 2024

March 31, 2025

(Unaudited) December 31, 2024

22 unchanged sentences

Convertible notes, net of issuance costs 1,257,086 1,256,429

Term B Loan, net of issuance costs 585,483 —

Non-current operating lease liabilities 65,291 67,660

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Class A common stock, $ 0.0001 par value;

900,000 shares authorized as of September 30, 2024 and December 31, 2023;

501,081 and 484,598 shares issued and 487,169 and 472,697 outstanding as of September 30, 2024 and December 31, 2023, respectively

900,000 shares authorized as of March 31, 2025 and December 31, 2024;

517,173 and 504,722 shares issued and 496,339 and 489,071 outstanding as of March 31, 2025 and December 31, 2024, respectively

Class B common stock, $ 0.0001 par value;

900,000 shares authorized as of September 30, 2024 and December 31, 2023;

393,014 shares issued and outstanding as of September 30, 2024 and December 31, 2023

900,000 shares authorized as of March 31, 2025 and December 31, 2024;

393,014 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Treasury stock, at cost;

13,912 and 11,901 shares as of September 30, 2024 and December 31, 2023, respectively

20,834 and 15,651 shares as of March 31, 2025 and December 31, 2024, respectively

( 779,742 ) ( 563,146 )

8 unchanged sentences

(Amounts in thousands, except per share data)

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Revenue $ 1,408,806 $ 1,174,996

3 unchanged sentences

General and administrative 164,394 174,251

Loss from operations ( 298,594 ) ( 286,586 ) ( 469,820 ) ( 745,416 )

Income (loss) from operations ( 46,331 ) ( 138,838 )

Other income (expense):

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Gain (loss) on remeasurement of warrant liabilities 2,495 ( 18,094 )

Other (loss) gain, net ( 4,620 ) ( 1,217 ) ( 5,801 ) ( 1,153 )

Loss before income tax (benefit) provision and loss from equity method investment ( 294,865 ) ( 281,804 ) ( 447,623 ) ( 753,761 )

Income tax (benefit) provision ( 1,287 ) 1,291 ( 75,208 ) 3,310

Loss from equity method investment 110 8 19 450

Net loss attributable to common stockholders $ ( 293,688 ) $ ( 283,103 ) $ ( 372,434 ) $ ( 757,521 )

Loss per share attributable to common stockholders:

Other gain (loss), net 22 ( 735 )

Income (loss) before income tax and equity method investments ( 39,419 ) ( 143,249 )

Income tax provision (benefit) ( 5,600 ) ( 351 )

(Gain) loss from equity method investments 45 ( 330 )

Net income (loss) attributable to common stockholders $ ( 33,864 ) $ ( 142,568 )

Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.07 ) $ ( 0.30 )

13 unchanged sentences

Exercise of warrants 182 — — — 8,973 — — — 8,973

Purchase of treasury stock ( 782 ) — — — — — — ( 33,499 ) ( 33,499 )

Purchase of treasury stock for RSU withholding ( 1,519 ) — — — — — — ( 74,318 ) ( 74,318 )

Restricted stock unit vesting 11,001 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 3,664 ) — — — — — — ( 142,278 ) ( 142,278 )

Net income (loss) — — — — — ( 33,864 ) — — ( 33,864 )

Balances at March 31, 2025 496,339 $ 48 393,014 $ 39 $ 8,091,174 $ ( 6,475,092 ) $ 36,488 $ ( 779,742 ) $ 872,915

Exercise of stock options 257 — — — 2,586 — — — 2,586

Stock-based compensation — — — — 93,681 — — — 93,681

Exercise of warrants 6 — — — 217 — — — 217

Purchase of treasury stock ( 631 ) — — — — — — ( 24,413 ) ( 24,413 )

Restricted stock unit vesting 1,970 — — — — — — — —

Shares issued in connection with business combinations 7,757 1 — — 331,556 — — — 331,557

Net income (loss) — — — — — 63,822 — — 63,822

Balances at June 30, 2024 485,426 $ 47 393,014 $ 39 $ 7,744,638 $ ( 6,012,689 ) $ 36,488 $ ( 470,094 ) $ 1,298,429

Exercise of stock options 529 — — — 1,355 — — — 1,355

Stock-based compensation — — — — 90,260 — — — 90,260

Exercise of warrants 1 — — — 18 — — — 18

Purchase of treasury stock ( 598 ) — — — — — — ( 20,258 ) ( 20,258 )

Restricted stock unit vesting 1,811 — — — — — — — —

Shares issued in connection with business combinations — — — — — — — — —

Net income (loss) — — — — — ( 293,688 ) — — ( 293,688 )

Balances at September 30, 2024 487,169 $ 47 393,014 $ 39 $ 7,836,271 $ ( 6,306,377 ) $ 36,488 $ ( 490,352 ) $ 1,076,116

Class A Common Stock Class B Common Stock Additional

7 unchanged sentences

Stock-based compensation — — — — 117,702 — — — 117,702

Exercise of warrants 1,002 — — — 46,181 — — — 46,181

Purchase of treasury stock ( 782 ) — — — — — — ( 33,499 ) ( 33,499 )

2 unchanged sentences

Balances at March 31, 2024 476,067 $ 46 393,014 $ 39 $ 7,316,598 $ ( 6,076,511 ) $ 36,488 $ ( 445,681 ) $ 830,979

Exercise of stock options 284 — — — 1,144 — — — 1,144

Stock-based compensation — — — — 89,193 — — — 89,193

Shares issued for exercise of warrants 62 — — — 1,470 — — — 1,470

Purchase of treasury stock ( 587 ) — — — — — — ( 13,826 ) ( 13,826 )

Restricted stock unit vesting 1,864 — — — — — — — —

Net income (loss) — — — — — ( 77,270 ) — — ( 77,270 )

Balances at June 30, 2023 463,257 $ 46 393,014 $ 39 $ 6,961,454 $ ( 5,606,219 ) $ 36,488 $ ( 373,317 ) $ 1,018,491

Exercise of stock options 1,359 — — — 5,506 — — — 5,506

Stock-based compensation — — — — 78,353 — — — 78,353

Shares issued for exercise of warrants 11 — — — 342 — — — 342

Purchase of treasury stock ( 617 ) — — — — — — ( 18,167 ) ( 18,167 )

Restricted stock unit vesting 1,896 — — — — — — — —

Net income (loss) — — — — — ( 283,103 ) — — ( 283,103 )

Balances at September 30, 2023 465,906 $ 46 393,014 $ 39 $ 7,045,655 $ ( 5,889,322 ) $ 36,488 $ ( 391,484 ) $ 801,422

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine months ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities:

Net loss attributable to common shareholders $ ( 372,434 ) $ ( 757,521 )

Net income (loss) attributable to common stockholders $ ( 33,864 ) $ ( 142,568 )

Adjustments to reconcile net loss to net cash flows used in operating activities:

Depreciation and amortization 70,116 53,180

Non-cash interest (income) expense, net 27 ( 554 )

Non-cash interest income ( 633 ) ( 590 )

Non-cash interest expense 909 649

Stock-based compensation 78,846 93,535

Loss on remeasurement of warrant liabilities 8,282 44,827

(Gain) loss on remeasurement of warrant liabilities ( 2,495 ) 18,094

(Gain) loss from equity method investment 45 ( 330 )

Loss on marketable equity securities and other financial assets, net — 75

Loss on sale of Vegas Sports Information Network, LLC 5,817 —

Deferred income taxes 826 540

Other income (expenses), net 4,632 ( 1,944 )

Other expenses (income), net 2,499 627

Change in operating assets and liabilities, net of effect of acquisitions:

13 unchanged sentences

Acquisition of gaming licenses ( 1,629 ) ( 11,594 )

Proceeds from marketable equity securities and other financial assets — 24,425

Cash paid for acquisition, net of cash acquired ( 392,501 ) —

Other investing activities, net ( 3,495 ) ( 1,915 )

Net cash flows used in investing activities $ ( 488,184 ) $ ( 66,918 )

Cash Flow from Financing Activities:

Proceeds from exercise of warrants — —

Purchase of treasury stock ( 78,170 ) ( 59,351 )

Net cash flows provided by (used in) investing activities $ ( 39,019 ) $ ( 39,199 )

Cash Flows from Financing Activities:

Proceeds from Term B Loan, net 588,116 —

Purchase of treasury stock for RSU withholding ( 74,318 ) ( 33,499 )

Purchase of treasury stock under Stock Repurchase Program ( 142,278 ) —

Proceeds from exercise of stock options 3,396 2,857

Net cash flows used in financing activities $ ( 71,372 ) $ ( 50,509 )

Net decrease in cash and cash equivalents, restricted cash, and cash reserved for users ( 466,978 ) ( 191,245 )

Other financing ( 2,093 ) —

Net cash flows provided by (used in) financing activities $ 372,823 $ ( 30,642 )

Net increase (decrease) in cash and cash equivalents, restricted cash, and cash reserved for users 214,788 ( 140,236 )

Cash and cash equivalents, restricted cash, and cash reserved for users at the beginning of period 1,330,193 1,623,493

7 unchanged sentences

Investing activities included in accounts payable and accrued expenses $ ( 1,575 ) $ 688

Equity consideration issued in connection with acquisitions $ 331,557 $ —

Decrease of warrant liabilities from cashless exercise of warrants $ 8,973 $ 46,181

1 unchanged sentence

(Decrease) increase in cash reserved for users $ ( 116,918 ) $ ( 63,149 )

Cash paid for interest $ 3,139 $ —

See accompanying notes to unaudited condensed consolidated financial statements.

4 unchanged sentences

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, digital lottery 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.

In May 2018, the Supreme Court (the “Court”) struck down on constitutional grounds the Professional and Amateur Sports Protection Act of 1992, a law that prohibited most states from authorizing and regulating sports betting.

As of September 30, 2024, 38 U.S.

As of March 31, 2025, 39 U.S.

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.

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

As of September 30, 2024, the U.S.

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

As of March 31, 2025, the U.S.

jurisdictions with statutes legalizing iGaming are Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

As of September 30, 2024, we operate our Sportsbook product offering 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, Wyoming and Ontario, Canada, and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington and Wisconsin.

As of September 30, 2024, we operate our iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

The Company also has arrangements in place with land-based casinos, and other partners, to expand operations into additional states upon the passing of relevant legislation, the issuance of related regulations and the receipt of required licenses.

As of March 31, 2025, we operate our Sportsbook product offering 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, Wyoming and Ontario, Canada, and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington and Wisconsin.

As of March 31, 2025, we operate our iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

We also have arrangements in place with land-based casinos, and other partners, to expand operations into additional states upon the passing of relevant legislation, the issuance of related regulations and the receipt of required licenses.

Summary of Significant Accounting Policies and Practices

11 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , designed to improve reportable segment disclosures.

The guidance expands the disclosures required for reportable segments in our annual and interim consolidated financial statements, primarily through enhanced disclosures about significant segment expenses.

The standard will be effective for us beginning with our annual reporting for fiscal year 2024 and interim periods thereafter, with early adoption permitted.

We are currently evaluating the impact of this standard on our segment disclosures.

In December 2023, the FASB issued ASU 2023-08, Accounting for and Disclosure of Crypto Assets (Topic 820) , a new standard designed to enhance decision-useful information about such assets and to better reflect the underlying economics of

cryptocurrency transactions.

The standard will be effective for fiscal year 2025 including interim periods therein, with early adoption permitted.

We are currently evaluating the impact of this standard on our digital assets’ accounting and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes—Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 modifies the rules on income tax disclosures to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid.

The amendments are intended to address investors’ requests for income tax disclosures that provide more information to help them better understand an entity’s exposure to potential changes in tax laws and the ensuing risks and opportunities and to assess income tax information that affects cash flow forecasts and capital allocation decisions.

The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024.

ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

All entities are required to apply the guidance prospectively but have the option to apply it retrospectively.

Early adoption is permitted.

The Company is continuing to assess the timing of adoption and the potential impacts of ASU 2023-09.

We are currently evaluating the impact of this standard on our income tax disclosure.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires disaggregated disclosure of income statement expenses.

ASU 2024-03 does not change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026, with early adoption permitted.

We are currently evaluating the impact of this standard on our disclosure of income statement expenses.

Business Combinations

1 unchanged sentence

( “ Jackpocket ” )

On February 11, 2024, the Company entered into a definitive agreement (the “Jackpocket Merger Agreement”) to acquire Jackpocket, a digital lottery app in the United States (the “Jackpocket Transaction”).

On February 11, 2024, the Company entered into a definitive agreement (the “Jackpocket Merger Agreement”) to acquire Jackpocket, which is a digital lottery courier app in the United States (the “Jackpocket Transaction”).

On May 22, 2024 (the “Jackpocket Closing Date”), DraftKings consummated the Jackpocket Transaction, and, under the terms of the Jackpocket Merger Agreement and subject to certain exclusions contained therein, Jackpocket stockholders received approximately $ 452.3 million of cash consideration and approximately $ 320.8 million of equity consideration.

The acquisition of Jackpocket allows DraftKings to participate in the U.S.

lottery vertical with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing customer lifetime value and customer acquisition capabilities.

Operating results for Jackpocket on and after the Jackpocket Closing Date are included in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2024.

Because the Company is integrating Jackpocket ’ s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through September 30, 2024, which is included within revenue and net income (loss) attributable to common stockholders in the Company’s unaudited condensed consolidated statements of operations, is impracticable to determine.

digital lottery courier business with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing customer lifetime value and customer acquisition capabilities.

Preliminary Purchase Price Accounting for the Jackpocket Transaction

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The purchase price allocation for Jackpocket set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Jackpocket Closing Date.

Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined and may include adjustments pertaining to intangible assets acquired and tax liabilities assumed, including the calculation of deferred tax assets and liabilities.

Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined and may include adjustments pertaining to tax liabilities assumed, including the calculation of deferred tax assets and liabilities, which remain preliminary as of March 31, 2025.

Any such adjustments may be material.

32 unchanged sentences

Total $ 269,736

Intangible assets consist of customer relationships, developed technology, trade name and market access.

We used variations of income approaches with estimates and assumptions developed by us to determine the fair values of customer

relationships, developed technology, and trade name.

We valued customer relationships by using the multi-period excess earnings method which requires the use of significant estimates and assumptions, including revenue growth rates, attrition rates, operating margin and discount rates.

For developed technology and trade name, we used the relief from royalty method including the use of significant estimates and assumptions including royalty rates and discount rates.

For market access, cost approximated fair value.

We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

Transaction Costs

For the three and nine months ended September 30, 2024, the Company incurred nil and $ 15.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which are included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

Acquisition of Sports IQ Analytics Inc.

On May 7, 2024, the Company acquired 100 % of the equity interests of SIQ for a mix of cash and shares of DraftKings Inc.’s Class A common stock (the “SIQ Transaction”).

The acquisition of SIQ allows DraftKings to bring further pricing and trading capabilities in-house in an effort to drive margin expansion and product differentiation.

The acquired assets and assumed liabilities of SIQ were recorded at their estimated fair values.

Goodwill associated with the SIQ Transaction is assigned as of the acquisition date to the Company’s consolidated reporting unit.

The purchase price allocation for the SIQ Transaction is preliminary as of September 30, 2024.

Goodwill recognized is not deductible for tax purposes and transaction costs were not significant.

As SIQ ’ s financial results are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

For the year ended December 31, 2024, the Company incurred $ 11.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which were included in general and administrative expenses.

This includes $ 4.9 million for the three months ended March 31, 2024.

There were no such costs incurred for the three months ended March 31, 2025.

Acquisition of Simplebet, Inc.

(“Simplebet”)

On August 28, 2024, the Company entered into a definitive agreement (the “Simplebet Merger Agreement”) to acquire Simplebet, which is a leading sports betting provider of in-play micromarket content and pricing (the “Simplebet Transaction”).

On December 3, 2024 (the “Simplebet Closing Date”), DraftKings consummated the Simplebet Transaction, and, under the terms of the Simplebet Merger Agreement and subject to certain exclusions contained therein, Simplebet stockholders received approximately $ 36.0 million of cash consideration, approximately $ 45.1 million of equity consideration and additional equity contingent consideration.

The present value of the equity contingent consideration of $ 53.5 million at the acquisition date, which is payable upon, and subject to, the achievement of certain performance targets, is included in other long term liabilities on the consolidated balance sheet.

Operating results for Simplebet on and after the Simplebet Closing Date are included in the Company’s unaudited condensed consolidated statements of operations, including for the three months ended March 31, 2025.

Preliminary Purchase Price Accounting for the Simplebet Transaction

On the Simplebet Closing Date, the Company acquired 100 % of the equity interests of Simplebet pursuant to the Simplebet Merger Agreement.

The following is a summary of the consideration issued or paid on the Simplebet Closing Date:

Cash consideration $ 35,965

Equity consideration (1)

Contingent consideration (2)

Total consideration $ 134,645

(1) Includes the issuance of approximately 1.0 million shares of DraftKings Inc.’s Class A common stock issued at $ 43.97 per share.

(2) Contingent consideration of up to 3.5 million shares of DraftKings Inc.’s Class A common stock may be payable over the next two years , subject to the achievement of certain future performance targets for the Company as a whole.

The Company recorded a fair value estimate of the contingent consideration, as disclosed in “Note 6 – Fair Value Measurement”.

The purchase price allocation for Simplebet set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Simplebet Closing Date.

Any such adjustments may be material.

The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed in connection with the consummation of the Simplebet Transaction on the Simplebet Closing Date.

The values set forth below are preliminary, pending finalization of valuation analyses:

Cash and cash equivalents $ 5,002

Accounts receivable 931

Prepaid expenses and other current assets 282

Operating lease right-of-use assets 144

Property and equipment 32

Intangible assets 62,120

Total identifiable assets acquired 68,511

Liabilities assumed:

Accounts payable and accrued expenses 5,374

Operating lease liabilities 144

Other long-term liabilities 11,500

Total liabilities assumed 17,018

Net assets acquired (a) 51,493

Estimated purchase consideration (b) 134,645

Estimated goodwill (b) - (a) $ 83,152

Goodwill represents the excess of the gross consideration transferred over the difference between the fair value of the underlying net assets acquired and the underlying liabilities assumed.

Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill.

Intangible assets not recognized apart from goodwill consist primarily of benefits from securing buyer-specific synergies that increase revenue and profits and are not otherwise available to a market participant, as well as acquiring a talented workforce and cost savings opportunities.

Goodwill recognized is not deductible for tax purposes.

Goodwill associated with the Simplebet Transaction is assigned as of the Simplebet Closing Date to the Company’s consolidated reporting unit.

As Simplebet’s financial results are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

The Company recorded intangible assets related to developed technology of $ 62.1 million that will be amortized over six years .

We valued developed technology by using the multi-period excess earnings method.

The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including revenue growth rates, and discount rates.

We amortize definite-lived assets based on the pattern over which we expect to receive the economic benefit from these assets.

Transaction Costs

For the year ended December 31, 2024, the Company incurred $ 4.5 million in advisory, legal, accounting and management fees in connection with the Simplebet Transaction, which were included in general and administrative expenses.

We did not incur any such costs in the three months ended March 31, 2025 or March 31, 2024.

Other 2024 Acquisitions

During the year ended December 31, 2024, the Company acquired 100 % of the equity interest of Sports IQ Analytics Inc.

(“SIQ”) and Dijon Systems Limited (“Dijon”).

SIQ and Dijon were acquired for aggregate cash payments of $ 28.2 million and aggregate equity consideration of $ 10.8 million on the respective closing dates of such acquisitions.

In addition, the Company is subject to contingent consideration payments of up to $ 33.3 million in the aggregate for both acquisitions, subject to the achievement of certain performance targets, with a preliminary fair value estimate of $ 24.4 million included in other current liabilities and other long term liabilities.

The Company recorded goodwill of $ 35.2 million, of which none will be deductible for tax purposes.

In addition, the Company recorded intangible assets of $ 34.9 million that will be amortized over seven years as well as deferred tax liability of $ 7.7 million, in relation to these acquisitions.

As financial results of SIQ and Dijon are not material to the Company’s consolidated financial statements, the Company has elected to not include pro forma results.

Intangible Assets

As of September 30, 2024, intangible assets, net consists of the following:

Intangible Assets

As of March 31, 2025, intangible assets, net consists of the following:

Weighted-Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net

2 unchanged sentences

Internally developed software 2.3 years 369,543 ( 186,689 ) 182,854

Gaming licenses 8.5 years 221,317 ( 63,376 ) 157,941

Gaming market access and licenses 8.3 years 223,108 ( 73,474 ) 149,634

Customer relationships 6.1 years 442,528 ( 210,523 ) 232,005

9 unchanged sentences

Internally developed software 2.3 years 333,437 ( 166,456 ) 166,981

Gaming licenses 10.6 years 218,760 ( 47,941 ) 170,819

Gaming market access and licenses 8.4 years 221,479 ( 68,402 ) 153,077

Customer relationships 6.1 years 442,528 ( 192,055 ) 250,473

4 unchanged sentences

Total $ 1,635,715 $ ( 702,594 ) $ 933,121

Amortization expense was $ 84.6 million and $ 188.2 million for the three and nine months ended September 30, 2024, respectively, and $ 45.1 million and $ 131.2 million for the three and nine months ended September 30, 2023, respectively.

The table below reflects expected amortization expense for the next five years of intangible assets recorded as of September 30, 2024:

Year ending December 31, Estimated Amortization

October 1, 2024 to December 31, 2024 $ 65,662

The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 are:

Balance as of December 31, 2023 $ 886,373

Goodwill resulting from acquisitions 569,636

Balance as of September 30, 2024 $ 1,456,009

No impairment of goodwill was recorded in the three or nine months ended September 30, 2024.

As of September 30, 2024, the Company had no accumulated goodwill impairment losses.

Amortization expense was $ 65.7 million and $ 47.3 million the three months ended March 31, 2025 and 2024, respectively.

Current and Long-term Liabilities

Old Revolving Line of Credit and New Revolving Credit Facility

On December 20, 2022, the Company entered into a loan and security agreement with Banc of California (formerly Pacific Western Bank) and Citizens Bank, as lenders (as amended, the “Old Credit Agreement”), which provided the Company with a revolving line of credit of up to $ 125.0 million (the “Old Revolving Line of Credit”).

The Old Credit Agreement maturity date was extended from December 20, 2024 to December 20, 2025, effective July 31, 2024.

Borrowings under the Old Credit Agreement bore interest at a variable annual rate equal to the greater of (i) 1.00 % above the prime rate then in effect and (ii) 5.00 %, and the Old Credit Agreement required monthly, interest-only payments on any outstanding borrowings.

In addition, the Company was required to pay quarterly in arrear a commitment fee equal to 0.25 % per annum of the unused portion of the Old Revolving Line of Credit.

As of September 30, 2024 , the Old Credit Agreement provided the Old Revolving Line of Credit of up to $ 125.0 million, and there was no principal outstanding under the Old Credit Agreement.

Net borrowing capacity available from the Old Revolving Line of Credit as of September 30, 2024 totaled $ 122.7 million.

The Company was also subject to certain affirmative and negative covenants, including the restriction of dividends, under the Old Credit Agreement which the Company was in compliance with as of September 30, 2024 .

One such covenant involved maintaining compensating cash balances.

The compensating balances were able to be withdrawn but the availability of the line of credit was dependent upon maintenance of such compensating balances.

The performance of the Company’s obligations under the Old Credit Agreement were secured by a first-priority security interest on substantially all of its assets.

On November 7, 2024, the Company entered into a credit agreement (the “New Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $ 500.0 million (the “New Revolving Credit Facility”).

The New Revolving Credit Facility has a maturity date of November 7, 2029.

In conjunction with the New Credit Agreement and New Revolving Credit Facility, the Old Credit Agreement and Old Rev olving Line of Credit were terminated.

Revolving loans under the New Revolving Credit Facility bear interest at the Company’s election at either (i) Term SOFR (as defined in the New Credit Agreement), plus an applicable margin ranging from 1.75 % to 2.25 % depending on the Company’s Net First Lien Leverage Ratio (as defined in the New Credit Agreement) or (ii) a base rate that is equal to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate and (c) Term SOFR for a one month interest period plus 1.00 %, in each case plus an additional applicable margin ranging from 0.75 % to 1.25 % depending on the Company’s Net First Lien Leverage Ratio.

In addition, the Company is required to pay a commitment fee quarterly in arrear ranging from 0.25 % to

0.375 % per annum of the unused portion of the New Revolving Credit Facility depending on the Company’s Net First Lien Leverage Ratio.

The performance of the Company’s obligations under the New Credit Agreement is secured by a first-priority security interest on substantially all of its assets.

The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including dividend restrictions and a financial covenant that the Company is required to maintain a Net First Lien Leverage Ratio not to exceed 4.50 :1.00, which is tested only if revolving loans outstanding under the New Revolving Credit Facility are in excess of 40 % of the commitments under the New Revolving Credit Facility.

Credit Agreement

On November 7, 2024, the Company entered into a credit agreement (as amended, the “Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $ 500.0 million (the “Revolving Credit Facility”).

The Revolving Credit Facility has a maturity date of November 7, 2029.

Revolving loans under the Revolving Credit Facility bear interest at the Company’s election at either (i) Term SOFR (as defined in the Credit Agreement), plus an applicable margin ranging from 1.75 % to 2.25 % depending on the Company’s Net First Lien Leverage Ratio (as defined in the Credit Agreement) or (ii) a base rate that is equal to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate and (c) Term SOFR for a one month interest period plus 1.00 %, in each case plus an additional applicable margin ranging from 0.75 % to 1.25 % depending on the Company’s Net First Lien Leverage Ratio.

In addition, the Company is required to pay a commitment fee quarterly in arrear ranging from 0.25 % to 0.375 % per annum of the unused portion of the Revolving Credit Facility depending on the Company’s Net First Lien Leverage Ratio.

As of March 31,

2025, the Credit Agreement provided a revolving line of credit of up to $ 500.0 million, and there was no principal outstanding under the Credit Agreement.

As of March 31, 2025, $ 10.0 million in letters of credit were issued under the Credit Agreement, with $ 490.0 million available for borrowing.

On March 4, 2025, the Company entered into a first amendment to the Credit Agreement, providing for a new class of incremental term loans under the Credit Agreement in an aggregate principal amount of $ 600.0 million (the “Term B Facility” and, such term loans, the “Term B Loan”).

The Term B Facility matures on March 4, 2032, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on such date (unless extended in accordance with the terms of the Credit Agreement).

In addition, 1.00 % of the aggregate principal amount of the Term B Loan borrowed on March 4, 2025 is payable per annum in quarterly installments.

In connection with the issuance of the Term B Loan, the Company incurred $ 11.9 million of lender fees and $ 3.1 million of debt financing costs, which are being amortized through the maturity date.

Term B Loan under the Term B Facility bear interest at the Company’s election at either (i) in the case of Term SOFR Loans, Term SOFR plus an applicable margin of 1.75 % per annum, or (y) in the case of ABR Term Loans, ABR plus an applicable margin of 0.75 % per annum (with each of the capitalized terms used in clauses (x) and (y) as defined in the Credit Agreement).

As of March 31, 2025, there were $ 600.0 million aggregate principal amount of Term B Loan outstanding.

As of March 31, 2025, the fair value of the Term B Loan approximates the carrying value.

The performance of the Company’s obligations under the Credit Agreement is secured by a first-priority security interest on substantially all of its assets.

The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including dividend restrictions, a public corporate credit rating requirement for so long as any Term B Loan are outstanding, and, with respect to the Revolving Credit Facility only, a financial covenant that the Company is required to maintain a Net First Lien Leverage Ratio not to exceed 4.50 :1.00, which is tested only if the aggregate amount of (i) revolving loans outstanding and (ii) letters of credit outstanding under the Revolving Credit Facility in excess of a specified threshold (unless cash collateralized) is in excess of 40 % of the total commitments under the Revolving Credit Facility.

Convertible Notes and Capped Call Transactions

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Old DraftKings will satisfy any conversion election by paying or delivering, as the case may be, cash, shares of DraftKings Inc.’s Class A common stock or a combination of cash and shares of DraftKings Inc.’s Class A common stock.

As of September 30, 2024, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

As of March 31, 2025, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

In connection with the pricing of the Convertible Notes and the exercise of the over-allotment option to purchase additional notes, Old DraftKings entered into a privately negotiated capped call transaction (“Capped Call Transactions”).

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The Capped Call Transactions are expected generally to reduce potential dilution to DraftKings Inc.’s Class A common stock upon any conversion of Convertible Notes.

As the transaction qualifies for equity classification, the net cost of $ 124.0 million incurred in connection with the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company ’ s consolidated balance sheet.

As of September 30, 2024, the Company’s convertible debt balance was $ 1,255.8 million, net of unamortized debt issuance costs of $ 9.2 million.

The amortization of debt issuance costs was $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively, and $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2023, respectively, which are included in the interest expense line-item on the Company ’ s consolidated statements of operations.

Although recorded at amortized cost on the Company’s consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,104.2 million and $ 1,025.6 million as of September 30, 2024 and December 31, 2023, respectively, which was calculated using the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

As of March 31, 2025, the Company’s convertible debt balance was $ 1,257.1 million, net of unamortized debt issuance costs of $ 7.9 million.

The amortization of debt issuance costs was $ 0.7 million and $ 0.7 million for the three months ended March 31, 2025 and 2024, respectively, which is included in interest expense on the Company ’ s condensed consolidated statements of operations.

Although recorded at amortized cost on the Company’s condensed consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,103.4 million and $ 1,076.9 million as of March 31, 2025 and December 31, 2024, respectively, which was calculated using the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

As of March 31, 2025, the future principal payments for the Term B Loan and Convertible Notes were as follows:

Years Ending December 31,

April 1, 2025 to December 31, 2025 $ 4,489

2028 1,270,815

Thereafter 572,132

Total $ 1,865,000

Indirect Taxes

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The Company’s activities by jurisdiction may vary from period to period, which could result in differences in the applicability of indirect taxes from period to period.

As of September 30, 2024 and December 31, 2023, the Company’s estimated contingent liability for indirect taxes was $ 82.8 million and $ 71.2 million, respectively.

As of March 31, 2025 and December 31, 2024, the Company’s estimated contingent liability for indirect taxes was $ 87.4 million and $ 84.7 million, respectively.

The estimated contingent liability for indirect taxes is recorded within other long-term liabilities on the condensed consolidated balance sheets and general and administrative expenses on the condensed consolidated statements of operations.

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Simultaneously with the closing of the IPO, DEAC completed the private sale of 6.3 million warrants to DEAC’s sponsor (the “Private Warrants”), each of which entitles the holder to purchase one share of DraftKings Inc.’s Class A common stock at an exercise price of $ 11.50 per share.

As of September 30, 2024, there were no Public Warrants outstanding and 0.4 million Private Warrants outstanding.

As of March 31, 2025, there were no Public Warrants outstanding and 0.1 million Private Warrants outstanding.

On April 23, 2025, the Private Warrants expired per the terms of the agreement.

On May 5, 2022 (the “GNOG Closing Date”), DraftKings Inc.

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’ s Class A common stock, or approximately 2.1 million shares of DraftKings Inc.’s Class A common stock in the aggregate, on the existing terms and conditions of such GNOG Private Warrants, except as otherwise described in the assignment and assumption agreement relating to the GNOG Private Warrants entered into on the GNOG Closing Date.

As of September 30, 2024, there were 2.9 million GNOG Private Warrants outstanding, convertible into approximately 1.1 million shares of DraftKings Inc.

As of March 31, 2025, there were 3.0 million GNOG Private Warrants outstanding, convertible into approximately 1.1 million shares of DraftKings Inc.

’ s Class A common stock.

The Company classifies the Public Warrants, the Private Warrants and the GNOG Private Warrants pursuant to Accounting Standards Codification Topic 815, Derivatives and Hedging , as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations at each reporting date.

As of September 30, 2024, the fair value of the Company’s warrant liability was $ 25.4 million.

Due to fair value changes, the Company recorded a nominal gain on the remeasurement of its warrant liabilities for the three months ended September 30, 2024 and a loss of $ 7.8 million for the three months ended September 30, 2023.

During the nine months ended September 30, 2024 and 2023, the Company recorded losses on the remeasurement of its warrant liabilities of $ 8.3 million and $ 44.8 million, respectively.

During the three and nine months ended September 30, 2024, 0.0 million and 1.0 million Private Warrants were exercised, respectively.

There were no GNOG Private Warrants exercised during the three months ended September 30, 2024, and 2.9 million GNOG Private Warrants were exercised during the nine months ended September 30, 2024.

These GNOG Private Warrants exercises resulted in the issuance of approximately 1.1 million shares of DraftKings Inc.

Class A common stock as all were exercised on a cashless basis.

As of March 31, 2025, the fair value of the Company’s warrant liability was $ 10.6 million.

Due to fair value changes throughout the three months ended March 31, 2025 and 2024, the Company recorded gain on the remeasurement of its warrant liabilities of $ 2.5 million and a loss on the remeasurement of its warrant liabilities of $ 18.1 million, respectively.

During the three months ended March 31, 2025, 0.2 million Private Warrants and no GNOG Private Warrants exercised resulting in a reclassification to additional paid-in-capital in the amount of $ 9.0 million and $ 0.0 million , respectively.

Fair Value Measurements

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• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2024 and December 31, 2023 based on the three-tier fair value hierarchy:

September 30, 2024

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of March 31, 2025 and December 31, 2024 based on the three-tier fair value hierarchy:

March 31, 2025

Level 1 Level 2 Level 3 Total

Other current assets:

Digital assets held for users $ — $ 4,124 (2)

Cash equivalents:

Money market funds 275,000 (1)

Other non-current assets:

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Other current liabilities $ — $ — $ 42,889 (5)

Digital assets held for users $ — $ 4,124 (2)

Warrant liabilities — 10,566 (4)

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Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 250,055 (1)

$ — $ — $ 250,055

Other current assets:

Digital assets held for users — 46,624 (2)

Other non-current assets:

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Other current liabilities $ — $ — $ 3,300 (5)

Digital assets held for users $ — $ 46,624 (2)

Warrant liabilities — 22,033 (4)

Other long-term liabilities — — 74,665 (5)

Total $ — $ 22,033 $ 77,965 $ 99,998

(1) Represents the Company’s money market funds, which are classified as Level 1 because the Company measures these assets to fair value using quoted market prices.

(2) Represents the asset and liability balance for the digital assets held by the Company for its users, which are classified as Level 2 because the Company measures these digital assets to fair value using latest transaction price for similar transactions.

(2) Represents the Company’s non-marketable equity securities, which are classified as Level 2 because the Company measures these assets to fair value using observable inputs for similar investments of the same issuer.

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The Company measures these derivative instruments to fair value using option pricing models and, accordingly, classifies these assets as Level 3.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the nine months ended September 30, 2024.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the three months ended March 31, 2025.

The table below includes a range and an average weighted by relative fair value of the significant unobservable inputs used to measure these Level 3 derivative instruments to fair value.

The key inputs to the valuations are underlying stock price, volatility and risk free rate.

A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date.

Changes to fair value of these instruments are recorded in Other (loss) income, net on the consolidated statements of operations and loss (gain) on marketable equity securities and other financial assets, net in the consolidated statement of cash flows.

September 30, 2024

December 31, 2023

Changes to fair value of these instruments are recorded in Other income, net on the condensed consolidated statements of operations and Loss on marketable equity securities and other financial assets, net in the condensed consolidated statement of cash flows.

(4) The Company measures its Private Warrants and the GNOG Private Warrants to fair value using a binomial lattice model or a Black-Scholes model, where appropriate, with the significant assumptions being observable inputs and, accordingly,

classifies these liabilities as Level 2.

Key assumptions used in the valuation of the Private Warrants and GNOG Private Warrants include term, risk free rate and volatility.

(5) Represents the contingent consideration issuable to former SIQ, Dijon and Simplebet securityholders in connection with the SIQ Transaction, Dijon Transaction and Simplebet Transaction upon the achievement of certain performance targets.

The fair value of contingent consideration was generally calculated using customary valuation models based on probability-weighted outcomes of meeting certain future performance targets and forecasted results.

The Company classified the contingent consideration liabilities as a Level 3 fair value measurement due to the lack of observable inputs used in the model.

The key inputs to the valuations are the projections of future financial results in relation to the business, revenue risk premium, revenue volatility, and operational leverage ratio as well as management judgment regarding the probability of achieving a future performance target.

The table below includes a range and an average weighted by relative fair value of the significant unobservable inputs used to measure contingent consideration at fair value.

A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date.

Changes to fair value of these instruments are recorded in Other income, net on the condensed consolidated statements of operations.

March 31, 2025 December 31, 2024

Significant Unobservable Input of Level 3 Investments Range (Weighted Average) Range (Weighted Average)

Underlying stock price $ 12.79 - $ 19.80 ($ 19.41 )

Revenue volatility 17.3 % - 17.7 % ( 17.6 %)

17.3 % - 17.7 % ( 17.6 %)

Volatility 75.0 % - 80.0 % ( 79.7 %)

Equity volatility 53.4 % - 60.0 % ( 55.3 %)

53.4 % - 60.0 % ( 55.3 %)

Risk-free rate 1.3 % - 4.2 % ( 4.0 %)

Operational leverage ratio 65.0 % - 70.0 % ( 66.4 %)

65.0 % - 70.0 % ( 66.4 %)

(5) The Company measures its Private Warrants and the GNOG Private Warrants to fair value using a binomial lattice model or a Black-Scholes model, where appropriate, with the significant assumptions being observable inputs and, accordingly, classifies these liabilities as Level 2.

Key assumptions used in the valuation of the Private Warrants and GNOG Private Warrants include term, risk free rate and volatility.

(6) Represents the contingent consideration issuable to former SIQ securityholders in connection with the SIQ Transaction upon the achievement of certain performance targets.

The Company measures this contingent consideration at fair value using a Monte Carlo simulation in an option pricing framework and, accordingly, classifies these liabilities as Level 3.

The significant unobservable inputs used to measure the fair value include a revenue risk premium of 5.1 %, revenue volatility of 17.3 %, operational leverage ratio of 70.0 %, as well as management judgment regarding the probability of achieving a future performance target.

A change in these significant unobservable inputs might result in a significantly higher or lower fair value measurement at the reporting date.

Changes to fair value of these instruments are recorded in Other (loss) gain, net on the consolidated statements of operations.

The following table provides a roll forward of the recurring Level 3 fair value measurements:

Three Months Ended March 31, 2025

Balance at January 1, 2025 $ 77,965

Settlement of contingent consideration liabilities 3,300

Balance at March 31, 2025 $ 74,665

Revenue Recognition

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The deferred revenue balances were as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Deferred revenue, beginning of the period $ 166,463 $ 174,212

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These obligations are primarily related to incentive programs and wagered amounts associated with unsettled or pending outcomes that fluctuate based on volume of activity.

Such obligations are recognized as liabilities when awarded to users and are recognized as revenue when those liabilities are later resolved, often within the following year.

Such obligations are recognized as liabilities when awarded to users and are recognized as revenue when those liabilities are later resolved, often within the following period.

Revenue Disaggregation

Disaggregation of revenue for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Online gaming $ 1,084,215 $ 768,265 $ 3,323,728 $ 2,353,293

Gaming software 1,575 6,304 11,424 23,495

We disaggregate revenue from contracts with customers by product vertical as we believe it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregation of revenue for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31,

Sportsbook $ 881,957 $ 734,055

iGaming 423,471 369,997

Other 103,378 70,944

Total Revenue $ 1,408,806 $ 1,174,996

Online gaming includes online Sportsbook, iGaming, digital lottery, and DFS, which have certain similar attributes and patterns of recognition.

Other revenue primarily includes media, retail sportsbooks and other consumer product offerings.

The opening and closing balances of the Company ’ s accounts receivable from contracts with customers were $ 47.5 million and $ 64.4 million for the nine months ended September 30, 2024, respectively, and $ 51.1 million and $ 27.8 million for the nine months ended September 30, 2023, respectively.

Sportsbook revenue includes online sportsbook and retail sportsbook.

Other revenue primarily includes DFS, digital lottery courier, gaming software, media and advertising revenue.

The opening and closing balances of the Company ’ s accounts receivable from contracts with customers were $ 57.8 million and $ 66.6 million for the three months ended March 31, 2025, respectively, and $ 47.5 million and $ 53.3 million for the three months ended March 31, 2024, respectively.

Stock-Based Compensation

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All stock-based compensation awards expire seven to ten years after the grant date thereof.

The following table shows restricted stock unit (“RSU”) and stock option activity for the nine months ended September 30, 2024:

Time-Based PSP LTIP Total Weighted Average Exercise Price of Options Weighted Average FMV

Options RSUs Options RSUs Options RSUs

The following table shows restricted stock unit (“RSU”) and stock option activity for the three months ended March 31, 2025:

Options RSUs Total Weighted Average Exercise Price of Options Weighted Average FMV of RSUs

Time Based PSP LTIP

Outstanding at December 31, 2024 20,775 16,253 14,506 859 52,393 $ 8.31 $ 23.75

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Exercised options / vested RSUs ( 1,268 ) ( 2,169 ) ( 8,461 ) ( 371 ) ( 12,269 ) 2.68 18.64

Change in awards due to performance-based multiplier — — — — — — — — —

Change in awards due to performance multiplier — — 4,230 — 4,230 — 49.90

Forfeited ( 2 ) ( 351 ) ( 129 ) ( 22 ) ( 504 ) 18.26 26.43

Outstanding at September 30, 2024 9,732 17,658 1,387 14,510 10,276 860 54,423 $ 7.75 $ 27.81

As of September 30, 2024, total unrecognized stock-based compensation expense of $ 691.2 million related to granted and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.5 years.

The following tables shows stock compensation expense for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Outstanding at March 31, 2025 19,705 19,551 11,478 466 51,200 $ 9.11 $ 28.93

As of March 31, 2025, total unrecognized stock-based compensation expense of $ 787.7 million related to granted and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.9 years.

The following tables shows stock compensation expense for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Options RSUs Total Options RSUs Total

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Total $ 1,936 $ 76,910 $ 78,846 $ 2,044 $ 91,491 $ 93,535

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Options RSUs Total Options RSUs Total

Time-based (1)

(1) Time-based awards vest and are expensed over a defined service period.

(2) PSP and LTIP awards vest based on defined performance criteria and are expensed based on the probability of achieving such criteria.

The Company’s income tax provision (benefit) for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31,

Income tax provision (benefit) $ ( 5,600 ) $ ( 351 )

The effective tax rates for the three months ended March 31, 2025 and 2024 were 14.2 % and 0.3 %, respectively.

The difference between the Company’s effective tax rates for the three month periods in 2025 and 2024 and the U.S.

statutory tax rate of 21% was primarily due to a valuation allowance related to the Company’s deferred tax assets, offset partially by current state tax and current foreign tax.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

Segment Information

The Company has one consolidated operating segment.

This segment provides users with Sportsbook, iGaming, DFS and digital lottery courier product offerings, media, and other online product offerings as well as the design, development and licensing of sports betting and casino gaming software for its Sportsbook and iGaming product offerings.

The Company drives revenue primarily in North America and manages the business activities on a consolidated basis.

The determination of reportable operating segments is based on the Chief Operating Decision Maker’s (“CODM”) use of financial information provided for the purposes of assessing performance and making operating decisions.

The Company's CODM is its Co-founder and Chief Executive Officer.

The CODM uses net income (loss) to allocate resources and assess the performance of the Company by comparing actual results to historical results and previously forecasted financial information and the allocation of budget between cost of revenues, sales and marketing, product and technology, and general and administrative expenses.

The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.

The accounting policies of the Company’s consolidated segment are the same as those described in “Note 2 – Summary of Significant Accounting Polices and Practices.” Any intercompany revenues or expenses are eliminated in consolidation.

The following table presents revenue, significant expenses, and net income (loss) for our consolidated segment:

Three Months Ended March 31,

Total revenue $ 1,408,806 $ 1,174,996

Gaming taxes 483,403 401,673

Other adjusted cost of revenue (1)

294,609 260,211

Total Adjusted Cost of Revenue $ 778,012 $ 661,884

Adjusted sales and marketing expenses (2)

333,198 335,222

Adjusted product and technology expenses (2)

107,513 86,502

Total $ 11,610 $ 259,697 $ 271,307 $ 8,239 $ 276,707 $ 284,946

(1) Time-based awards vest and are expensed over a defined service period.

(2) PSP and LTIP awards vest based on defined performance criteria and are expensed based on the probability of achieving such criteria.

The Company’s (benefit) provision for income taxes for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three months ended September 30, Nine months ended September 30,

Adjusted general and administrative expenses (2)

87,453 68,998

Income tax (benefit) provision $ ( 1,287 ) $ 1,291 $ ( 75,208 ) $ 3,310

The effective tax rates for the three months ended September 30, 2024 and 2023 were 0.4 % and ( 0.5 )%, respectively, and the effective tax rates for the nine months ended September 30, 2024 and 2023 were 16.8 % and ( 0.4 )%, respectively.

The difference between the Company’s effective tax rates for the three and nine month periods in 2024 and 2023 and the U.S.

statutory tax rate of 21% was primarily due to a valuation allowance related to the Company’s deferred tax assets, offset partially by current state tax and current foreign tax.

Additionally, the Company recorded a discrete income tax benefit of $ 75.8 million during the second quarter of 2024, which was attributable to non-recurring partial releases of the Company ’ s U.S.

valuation allowance as a result of the purchase accounting for Jackpocket.

The Company regularly evaluates the realizability of

its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

Depreciation and amortization 70,116 53,180

Interest income ( 9,489 ) ( 15,067 )

Interest expense 5,094 649

Stock-based compensation 78,846 93,535

Transaction-related costs (3)

Litigation, settlement and related costs (4)

Advocacy and other related legal expenses (5)

(Gain) loss on remeasurement of warrant liabilities ( 2,495 ) 18,094

(Gain) loss from equity method investments ( 45 ) 330

Income tax provision (benefit) ( 5,600 ) ( 351 )

Other expenses (6)

Consolidated net income (loss) $ ( 33,864 ) $ ( 142,568 )

(1) Other adjusted cost of revenue includes all cost of revenue, other than gaming tax, presented in the statement of operations, adjusted for the impact of depreciation and amortization and stock-based compensation.

(2) These items represent the respective line items in the statement of operations, adjusted for the impact of depreciation and amortization;

stock-based compensation;

transaction-related costs;

litigation, settlement and related costs;

advocacy and other related legal expenses;

and other expenses, as further described below.

(3) Includes capital markets advisory, consulting, accounting and legal expenses related to the evaluation, negotiation and integration costs incurred in connection with transactions under consideration, pending, or completed transactions and offerings, including costs relating to our completed 2024 acquisitions of Jackpocket, SIQ, Dijon and Simplebet.

(4) Primarily includes certain external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations.

(5) Reflects certain costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings.

This adjustment excludes (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate.

(6) Other expenses include certain other costs that were not included in the above categories including any gain or loss on the disposal of a business and termination expenses.

Earnings (Loss) Per Share

The computation of loss per share and weighted-average shares of the Company ’ s Class A common stock outstanding for the periods presented are as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Net loss attributable to common stockholders $ ( 293,688 ) $ ( 283,103 ) $ ( 372,434 ) $ ( 757,521 )

The computation of earnings (loss) per share and weighted-average shares of the Company ’ s Class A common stock outstanding for the periods presented are as follows:

Three Months Ended March 31,

Net income (loss) attributable to common stockholders $ ( 33,864 ) $ ( 142,568 )

Basic and diluted weighted-average common shares outstanding 493,323 474,228

Loss per share attributable to common stockholders:

Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.07 ) $ ( 0.30 )

There were no preferred or other dividends declared for the three and nine months ended September 30, 2024.

For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding, as they would have been anti-dilutive for the three and nine months ended September 30, 2024 and 2023:

September 30, 2024 September 30, 2023

There were no preferred or other dividends declared for the three months ended March 31, 2025.

March 31, 2025 March 31, 2024

Class A common stock resulting from exercise of all warrants 1,196 1,449

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Related-Party Transactions

Receivables from Equity Method Investments

The Company provides office space and general operational support to DKFS, LLC, an equity-method affiliate.

The operational support is primarily in the form of general and administrative services.

The Company has also committed to invest up to $ 17.5 million in DBDK Venture Fund I, LP and $ 21.0 million in DBDK Fund II, LP.

Both funds are Delaware limited partnerships and are both subsidiaries of DKFS, LLC.

As of September 30, 2024, the Company had invested a total of $ 10.0 million and none of the total commitment in DBDK Venture Fund I, LP and DBDK Fund II, LP, respectively.

Transactions with a Former Director and their Immediate Family Members

For the three and nine months ended September 30, 2024, the Company had no sales to entities owned by an immediate family member of a former director of the Company.

For the three and nine months ended September 30, 2023, the Company had $ 0.2 million and $ 1.4 million in sales, respectively, to entities owned by an immediate family member of a former director of the Company.

The Company had no associated accounts receivable balance as of September 30, 2024 or December 31, 2023.

Equity Method Investments

The Company has committed to invest up to $ 17.5 million in DBDK Venture Fund I, LP and $ 21.0 million in DBDK Fund II, LP.

Both funds are Delaware limited partnerships and are both managed by Drive by DraftKings, LLC (“DBDK”).

As of March 31, 2025, the Company had invested a total of $ 11.0 million and none of the total commitment in DBDK Venture Fund I, LP and DBDK Fund II, LP, respectively.

The Company also provides office space and general operational support to DBDK, which is partially owned by DKFS, LLC, an equity-method affiliate in which the Company has a 49.9 % membership interest, in exchange for services-in-kind.

The operational support is primarily general and administrative services.

On each of March 30, 2025 and 2024, the Company renewed a one-year lease of an aircraft from an entity controlled by Mr.

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Robins and his family fly private and the committees ’ assessment that such an arrangement is more efficient and flexible and better ensures safety, confidentiality and privacy.

During the three and nine months ended September 30, 2024, the Company incurred $ 0.1 million and $ 0.4 million of expense under the Aircraft Leases as well as $ 0.3 million for upgrades related to the aircraft.

During the three and nine months ended September 30, 2023, the Company incurred $ 0.1 million and $ 0.5 million of expense under the Aircraft Leases, respectively.

Leases, Commitments and Contingencies

The Company leases corporate office facilities, data centers, and motor vehicles under operating lease agreements.

Some of the Company’s leases include one or more options to renew.

For a majority of the Company’s leases, it does not assume renewals in its determination of the lease term as the renewals are not deemed to be reasonably assured.

The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

As of September 30, 2024, the Company’s lease agreements typically have terms not exceeding ten years.

Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments primarily represent costs related to common area maintenance and utilities.

The components of lease expense are as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Operating lease cost $ 5,418 $ 5,779 $ 15,288 $ 14,298

Short term lease cost 262 361 605 2,221

Variable lease cost 1,664 1,382 3,602 4,215

Sublease income — ( 236 ) — ( 704 )

Total lease cost $ 7,344 $ 7,286 $ 19,495 $ 20,030

Supplemental cash flow and other information for the nine months ended September 30, 2024 and 2023 related to operating leases was as follows:

Nine months ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used for operating leases $ 5,020 $ 9,830

Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,626 $ 22,221

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating leases were 6.6 years and 6.5 % as of September 30, 2024.

The Company calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that it would pay to borrow funds on a fully collateralized basis over a similar term.

Maturities of lease liabilities are as follows:

Years Ending December 31,

From October 1, 2024 to December 31, 2024 $ 4,302

Thereafter 40,223

Total undiscounted future cash flows 109,326

Imputed interest ( 22,287 )

Present value of undiscounted future cash flows $ 87,039

Other Contractual Obligations and Contingencies

During the three months ended March 31, 2025, the Company incurred $ 0.1 million of expense under the Aircraft Leases.

Commitments and Contingencies

Contractual Obligations and Contingencies

The Company is a party to several non-cancelable contracts with vendors where the Company is obligated to make future minimum payments under the terms of these contracts as follows:

Years Ending December 31,

From October 1, 2024 to December 31, 2024 $ 128,697

From April 1, 2025 to December 31, 2025 $ 317,831

Thereafter 80,625

Total $ 839,888

As of September 30, 2024 , the Company has been issued $ 340.0 million in surety bonds at a combined annual premium cost of 0.4 %, which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

As of March 31, 2025 , the Company has been issued $ 400.0 million in surety bonds at a combined annual premium cost of 0.4 %, which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

There have been no claims against such bonds and the likelihood of future claims is remote.

Stock Repurchase Program

On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.

As of September 30, 2024, we have not purchased any shares of Class A common stock under this stock repurchase program.

On July 30, 2024, the Company’s Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of the Company’s Class A common stock (the “Stock Repurchase Program”).

Under the Stock Repurchase Program the Company may make repurchases of its Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws, subject to market conditions and other factors.

The Company’s Stock Repurchase Program does not require it to acquire any specific number or amount of Class A common stock and may be terminated at any time.

The Company may enter into Rule 10b5-1 plans from time to time to facilitate repurchases of its Class A common stock in connection with its Stock Repurchase Program.

The Company repurchased 3.7 million shares for $ 142.3 million during the three months ended March 31, 2025 under the Stock Repurchase Program.

Contingencies

From time to time, and in the ordinary course of business, the Company may be subject to certain claims, charges and litigation concerning matters arising in connection with the conduct of the Company’s business activities.

Interactive Games LLC

On June 14, 2019, Interactive Games LLC filed suit against the Company in the U.S.

District Court for the District of Delaware, alleging that our Daily Fantasy Sports product offering infringes two patents and the Company’s Sportsbook product offering infringes two different patents.

On April 9, 2024, Interactive Games LLC dismissed the lawsuit without prejudice.

On July 7, 2021, Winview Inc., a Delaware corporation, filed suit against the Company in the U.S.

District Court for the District of New Jersey, which was subsequently amended on July 28, 2021, alleging that our Sportsbook product offering infringes two patents, our Daily Fantasy Sports product offering infringes one patent, and that our Sportsbook product offering and Daily Fantasy Sports product offering infringe another patent.

On November 15, 2021, Winview Inc.

filed a second amended complaint (the “SAC”), adding as defendants DK Crown Holdings Inc.

(“DK DE”) and Crown Gaming Inc., a Delaware corporation, which are wholly-owned subsidiaries of the Company.

The SAC largely repeats the allegations of the first amended complaint.

The Company intends to vigorously defend this case.

In the event that a court ultimately determines that the Company is infringing the asserted patents, it may be subject to substantial damages, which may include treble damages and/or an injunction that could require the Company to modify certain features that we currently offer.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of this proceeding will have a material adverse effect on the Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Securities Matters Arising From the Hindenburg Report and Related Matters

Beginning on July 9, 2021, the Company received subpoenas from the SEC seeking documents concerning, among other things, allegations concerning SBTech that were contained in a report published about the Company on June 15, 2021 by Hindenburg Research, as well as the Company’s adherence to and disclosures regarding its compliance policies and procedures, and related matters.

In September, 2024, the Company entered into a settlement with the SEC regarding alleged violations of Regulation FD in connection with the disclosure on July 27, 2023 of certain information concerning DraftKings’ business through certain social media platforms.

Without admitting or denying the substantive allegations, DraftKings agreed to the entry of a cease and desist order and the payment of a $ 200,000 penalty.

Following the settlement, the Company considers that all the above SEC matters have concluded.

Matters Related to the GNOG Transaction

On August 12, 2022, a putative class action was filed in Nevada state District Court in Clark County against Golden Nugget Online Gaming, Inc.

(“GNOG Inc.”), the Company and one of its officers and two affiliates, as well as former officers or directors and the former controlling stockholder of GNOG Inc.

and Jefferies LLC.

The lawsuit asserts claims on behalf of a putative class of former minority stockholders of GNOG Inc.

alleging that certain former officers and directors of GNOG Inc.

and its former controlling stockholder (Tilman Fertitta and/or Fertitta Entertainment, Inc.) breached their fiduciary duties to minority stockholders of GNOG Inc.

in connection with the GNOG Transaction, and the other defendants aided and abetted the alleged breaches of fiduciary duty.

On August 30, 2024, DraftKings filed a motion for summary judgment.

On September 15, 2024, the court entered a stipulated order dismissing the action with prejudice.

On September 9, 2022, two similar putative class actions were filed in the Delaware Court of Chancery against former directors of GNOG Inc.

and its former controlling stockholder, one of which also names the Company and Jefferies Financial Group, Inc.

as defendants.

These pending actions in Delaware assert substantially similar claims on behalf of a putative class of former minority stockholders of GNOG Inc.

alleging that certain former officers and directors of GNOG Inc.

and its former controlling stockholder (Tilman Fertitta) breached their fiduciary duties to minority stockholders of GNOG Inc.

in connection with the GNOG Transaction, and one of the actions also alleges that the Company aided and abetted the alleged breaches of fiduciary duty.

On October 12, 2022, the Delaware Court of Chancery consolidated these two actions under the caption In re Golden Nugget Online Gaming, Inc.

Stockholders Litigation.

At a mediation held on January 24, 2024, the parties reached an agreement in principle to settle the Delaware action, which was reflected in a written settlement agreement, dated March 1, 2024.

On July 9, 2024, the Delaware Court entered its Order and Final Judgment approving the settlement and dismissing the action with prejudice.

The Order and Final Judgment is now final as no appeal was filed by the August 8, 2024 deadline.

The estimated loss was accrued as of December 31, 2023 in the accounts payable and accrued expenses line-item on the consolidated balance sheet.

We are involved in a number of legal proceedings (including those described below) concerning matters arising in connection with the conduct of our business activities.

These proceedings are at varying stages, and many of these proceedings seek an indeterminate amount of damages.

We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or an additional loss may have been incurred and to determine if accruals are appropriate.

If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made.

For certain cases described on the following pages, management is unable to provide a meaningful estimate of the possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages;

(ii) damages have not been sought;

(iii) damages are unsupported and/or exaggerated;

(iv) there is uncertainty as to the outcome of pending appeals or motions;

(v) there are significant factual issues to be resolved;

and/or (vi) there are novel legal issues or unsettled legal theories to be presented or a large number of parties involved.

Unless otherwise indicated, for each of the matters described below, management does not believe that, despite the potential for significant damages, and based on currently available information, the outcome of any specific matter will have a material adverse effect on our financial condition, though an outcome of a specific matter could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

Attorney General of Texas

On January 19, 2016, the Texas Attorney General issued an opinion letter that “odds are favorable that a court would conclude that participation in paid daily fantasy sports leagues constitutes illegal gambling” under Texas law.

In response to the opinion letter, we sued the Texas Attorney General on March 4, 2016 in Dallas County, Texas.

The lawsuit makes five claims:

(1) a claim for a declaratory judgment that daily fantasy sports contests do not violate Texas law;

(2) a claim of denial of due process under the Fifth and Fourteenth Amendments to the U.S.

Constitution;

(3) a claim of denial of due course of law under Article I of the Texas Constitution;

(4) a claim of denial of equal protection under the Fourteenth Amendment to the U.S.

Constitution;

and (5) a claim of denial of equal rights under Article I of the Texas Constitution.

We are also seeking reimbursement of our costs and attorneys’ fees.

On April 16, 2018, the parties filed a notice of agreed non-suit without prejudice, and we re-filed our lawsuit against the Texas Attorney General in Travis County.

On April 17, 2018, the Dallas County court granted the parties’ agreed non-suit without prejudice, thereby dismissing the Dallas County lawsuit without prejudice.

FanDuel filed a petition in intervention on August 24, 2018, seeking essentially the same relief as the Company seeks.

The parties filed an agreed motion to extend the scheduling order seeking, among other things, to change the non-jury trial date to January 27, 2026.

We intend to vigorously pursue our claims.

In the event a court ultimately determines that daily fantasy sports contests violate Texas law, that determination could cause financial harm to us and loss of business in Texas.

We cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liabilities.

On July 7, 2021, Winview Inc., a Delaware corporation (“Winview”) filed suit against the Company in the U.S.

District Court for the District of New Jersey.

In the complaint, Winview alleges that the Company infringes two patents:

9,878,243 (“the ’243 Patent”), entitled “Methodology for Equalizing Systemic Latencies in Television Reception in Connection with Games of Skill Played in Connection with Live Television Programming”, and U.S.

10,721,543 (“the ’543 Patent”), entitled “Method of and System for Managing Client Resources and Assets for Activities on Computing Devices”.

The allegations based on the ’243 Patent are directed to Sportsbook, and the allegations based on the ‘543 Patent are directed to both Sportsbook and DFS.

On July 28, 2021, Winview filed an amended complaint, in which it alleges that the Company infringes two additional patents:

9,993,730 (“the ’730 Patent”), entitled “Methodology for Equalizing Systemic Latencies in Television Reception in Connection with Games of Skill Played in Connection with Live Television Programming”, and U.S.

10,806,988 (“the ’988 Patent”), entitled “Method Of and System For Conducting Multiple Contests of Skill with a Single Performance”.

The allegations based on the ’730 Patent are directed at Sportsbook, and the allegations based on the ’988 Patent are directed at DFS.

On November 15, 2021, Winview filed a second amended complaint (the “SAC”), adding as defendants DK Crown Holdings Inc.

and Crown Gaming Inc., a Delaware corporation, which are wholly-owned subsidiaries of the Company.

The SAC, among other allegations, repeats the allegations of the first amended complaint that the defendants infringe the ’243 Patent, the ’543 Patent, the ’730 Patent, and the ’988 Patent.

On December 15, 2021, the Company filed a motion to dismiss the SAC, arguing that Winview failed to state a claim for direct infringement of the ’543 Patent and the ’730 Patent, and for willful, induced, and contributory infringement for all four asserted patents.

On August 3, 2022, we filed a petition for inter partes review with the PTAB challenging the validity of the ‘243 Patent.

On July 25, 2022, FanDuel filed petitions for inter partes review with the PTAB challenging the validity of the '543 and '730 Patents.

On September 20, 2022, the court entered an order staying the pending motion to dismiss and staying all discovery pending final resolution of the petition for inter partes review through a final written decision.

On February 15, 2023, the District Court administratively terminated the lawsuit pending the PTAB’s final written decision.

On January 29, 2024, the PTAB issued final written decisions in the IPRs, finding unpatentable all challenged claims of the ’243, ’543, and ’730 Patents.

On February 16, 2024, the parties jointly requested that the case remain administratively terminated.

On February 20, 2024, the court granted the request.

On March 29, 2024, Winview filed a notice of appeal in the United States Court of Appeals for the Federal Circuit, challenging the PTAB’s final written decisions in the IPRs.

On April 11, 2024, the parties jointly requested that the district

court litigation remain administratively terminated until at least the Federal Circuit issues its mandate regarding Winview’s appeals.

On April 15, 2024, the district court ordered the case to remain administratively terminated.

On June 26, 2024, Winview and DraftKings filed a joint stipulation of voluntary dismissal of Winview’s appeal.

On June 28, 2024, the United States Court of Appeals for the Federal Circuit ordered Winview’s appeal dismissed.

On December 17, 2024, the court dismissed all of Winview’s claims with respect to U.S.

9,878,243 and 9,930,730.

On January 6, 2025, Defendants filed a motion to dismiss Winview’s direct infringement claims for U.S.

10,721,543 as well as Winview’s claim for willful, induced, and contributory infringement for the two remaining patents-in-suit.

The case remains stayed and administratively terminated pending the outcome of the motion to dismiss.

We intend to vigorously defend this case.

In the event that a court ultimately determines that we are infringing the asserted patents, we may be subject to substantial damages, which may include treble damages and/or an injunction that could require us to modify certain features that we currently offer.

We cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

AG 18, LLC d/b/a Arrow Gaming

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On October 12, 2021, Arrow Gaming filed an amended complaint to add one additional patent.

The following U.S.

Patents are asserted against one or both of the Company’s DFS and Casino product offerings in the amended complaint:

9,613,498, entitled “Systems and Methods For Peer-to-Peer Gaming”;

9,978,205, entitled “Location Based Restrictions on Networked Gaming”;

10,497,220 entitled “Location Based Restrictions on Networked Gaming”;

10,614,657 entitled “Location Based Restrictions on Networked Gaming”;

11,024,131 entitled “Location Based Restrictions on Networked Gaming” (collectively, the “Arrow Gaming Patents”).

On November 10, 2021, we answered the complaint and filed counterclaims (the “Counterclaims”).

In the Counterclaims we seek, among other things, a declaratory judgment that the Arrow Gaming Patents are invalid.

On December 1, 2021, Arrow Gaming answered our Counterclaims.

On December 20, 2021, Arrow Gaming filed a second amended complaint adding new allegations with respect to alleged willful infringement.

The Company intends to vigorously defend this case.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On November 22, 2021, Beteiro, LLC filed a complaint against the Company in the United States District Court for the District of New Jersey alleging that the Company’s Sportsbook and Casino product offerings infringe four patents.

The Company intends to vigorously defend this case.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of this proceeding will have a material adverse effect on the Company's financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

On January 21, 2022, the Company filed a motion to dismiss plaintiff’s second amended complaint.

On October 21, 2022, the Company filed a renewed motion to dismiss plaintiff’s complaint.

On November 4, 2022, the Company filed a motion to stay the case pending resolution of the below-referenced petitions for inter partes review.

Between August 22, 2022 and August 30, 2022, the Company filed petitions for inter partes review (“IPRs”) with the PTAB challenging the validity of each of the Arrow Gaming Patents.

On March 14, 2023, the PTAB granted institution of all IPRs.

On March 12 and 13, 2024, the PTAB issued final written decisions in all pending IPRs finding all claims that were asserted in the litigation unpatentable.

Only two claims were not found unpatentable:

claim 18 of the ’205 Patent and claim 11 of the ’657 Patent.

Neither of these claims were asserted in the litigation brought by Arrow Gaming.

On May 14, 2024, Arrow Gaming filed a Notice of Appeal of the IPR directed to the ’498 Patent.

That appeal remains pending.

On July 10, 2024, DraftKings filed a Notice of Appeal of the IPR directed to the ’205 Patent challenging the PTAB’s final written decision as to claim 18 of the ’205 Patent.

That appeal remains pending.

On April 3, 2023, the District Court administratively terminated the lawsuit pending the PTAB’s final written decisions.

The parties have agreed to maintain the stay pending any appeals of the PTAB’s final written decisions in the IPRs.

We intend to vigorously defend this case.

We cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Diogenes Ltd.

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& Colossus (IOM) Ltd.

(“Colossus”), filed a complaint against the Company in the United States District Court for the District of Delaware alleging that the Company’s Sportsbook product offering infringes seven patents.

Colossus amended its complaint on February 7, 2022 to, among other things, add one additional patent.

The Company intends to vigorously defend this case.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

The following U.S.

Patents, each entitled “Wagering apparatus, methods and systems”, are asserted against the Company’s Sportsbook product offering in the complaint:

8,721,439 (“the ’439 patent”);

9,117,341 (“the ’341 patent”);

9,275,516 (“the ’516 patent”);

9,424,716 (“the ’716 patent”);

9,704,338 (“the ’338 patent”);

10,970,969 (“the ’969 patent”);

10,997,822 (“the ’822 patent”).

On January 24, 2022, the Company filed a motion to dismiss the original complaint.

On February 7, 2022, Colossus filed an amended complaint (the “Amended Complaint”) to, among other things, assert one additional patent against the Company, U.S.

11,200,779 (“the ’779 patent”).

The patents asserted by Colossus are collectively referred to as the “Colossus Patents.”

The Company filed a motion to dismiss the Amended Complaint on February 22, 2022.

On July 18, 2022, Magistrate Judge Burke issued a report and recommendation (the “Report and Recommendation”) that the motion to dismiss be granted-in-part and denied-in-part.

On August 26, 2022, District Court Judge Noreika adopted the Report and Recommendation of Magistrate Judge Burke regarding the motion to dismiss.

On December 27, 2022, the Company filed an Answer to the Amended Complaint, including certain affirmative defenses.

On January 17, 2023, Colossus filed a motion to strike the affirmative defense of unenforceability from the Company’s Answer.

On February 7, 2023, the Company filed an Amended Answer and Counterclaims to the Amended Complaint, and also filed a response to Colossus’ motion to strike.

On February 28, 2023, Colossus filed another motion to strike DraftKings’ inequitable conduct affirmative defense and counterclaim.

Magistrate Judge Burke held a hearing on Colossus’ motion on June 6, 2023 and subsequently issued a report and recommendation (the “Second Report and Recommendation”) that the motion be denied in part and granted in part.

On August 2, 2023, Judge Noreika overruled Colossus’ objections and adopted the Second Report and Recommendation.

Between November 29, 2022, and February 7, 2023, the Company filed petitions for inter partes review with the PTAB challenging the validity of the Colossus Patents.

The PTAB granted institution of IPRs for each of the ’341 patent, ’969 patent, and the ’822 patent.

The PTAB denied institution of IPR for each of the ’516 patent, ’716 patent, ’338 patent and the ’779 patent.

On September 11, 2023, the Company filed a request for Director Review of the PTAB’s decision not to institute review in the IPR for the ’779 patent.

On November 7, 2023, the Director of the U.S.

Patent and Trademark Office delegated Director Review of the PTAB’s institution decision in the IPR for the ’779 Patent to the Delegated Review Panel (“DRP”) to determine whether to grant rehearing.

On February 21, 2024, the DRP issued a decision vacating the PTAB’s denial of institution of the IPR directed to the ’779 Patent and instructing the PTAB to reconsider institution.

On May 15, 2024, the PTAB instituted the IPR directed to the ‘779 Patent.

Colossus filed its Patent Owner Response on August 9, 2024.

The Company filed its reply on November 8, 2024.

Colossus’ filed its sur-reply on December 20, 2024.

Oral argument was held on February 20, 2025.

On March 15, 2024, the parties entered into a partial settlement agreement, in which the parties agreed to, among other things:

(1) dismissal with prejudice of the claims relating to the ’439 patent;

and the ’822 patent;

and (2) DraftKings’ withdrawal of its IPRs with respect to the ’341 Patent, the ’969 Patent, and the ’822 Patent.

The dismissal and withdrawal both occurred on March 18, 2024.

Only the ‘779 Patent remains pending in the district court litigation.

The parties have stipulated to a stay of the district court litigation pending resolution of the IPR directed to the ‘779 Patent.

We intend to vigorously defend this case.

We cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Nelson Steiner filed suit against the Company and FanDuel Inc.

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The Company intends to vigorously defend this suit.

Any adverse outcome in this matter could be subject the Company to substantial damages and it could be restricted from offering DFS contests in Florida.

Any adverse outcome in this matter could subject the Company to substantial damages and it could be restricted from offering DFS contests in Florida.

The Company cannot provide any assurance as to the outcome of this matter.

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Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of this matter will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

On January 9, 2023, Simpson G.

Turley, individually and on behalf of all others similarly situated, filed a purported class action against the Company in the United States District Court for the District of Massachusetts.

Plaintiff alleges, among other things, that he was a contestant in the Company’s daily fantasy showdown contest for the January 2, 2023, NFL game between the Cincinnati Bengals and the Buffalo Bills (the “Bengals-Bills Game”).

The Bengals-Bills Game was postponed and eventually cancelled due to Damar Hamlin collapsing during the game.

Plaintiff alleges that he was winning prizes in multiple showdown contests at the point in time that the Bengals-Bills Game was cancelled (with 5:58 remaining in the first quarter).

Plaintiff alleges that, instead of paying out the prize money, the Company refunded entry fees to contestants that entered showdown or flash draft fantasy contests.

On May 8, 2023, plaintiff Turley and a new plaintiff (Erik Ramos) filed a First Amended Class Action Complaint.

The plaintiffs assert claims for breach of contract, unfair and deceptive acts and practices, false advertising, and unjust enrichment.

Among other things, plaintiffs seek statutory damages, monetary damages, punitive damages, attorney fees and interest.

On March 29, 2024, the court granted DraftKings’ motion to dismiss plaintiffs’ complaint with prejudice.

Securities Matters Arising From DraftKings Marketplace and Related Matters

On March 9, 2023, a putative class action was filed in Massachusetts federal court by alleged purchasers of non-fungible tokens (“NFTs”) on the DraftKings Marketplace (“DK Marketplace”).

The complaint asserts claims for violations of federal and state securities laws against the Company and three of its officers on the grounds that, among other things, the NFTs that are sold and traded on the DK Marketplace allegedly constitute securities that were not registered with the SEC in accordance with federal and Massachusetts law, and that the DK Marketplace is a securities exchange that is not registered in accordance with federal and Massachusetts law.

Based on these allegations, plaintiff brings claims seeking rescissory damages and other relief on behalf of himself and a putative class of persons who purchased NFTs on the DK Marketplace between August 11, 2021 and the present.

The Company intends to vigorously defend this matter.

Beginning in July 2023, the Company received a subpoena from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts and the United States Securities and Exchange Commission seeking documents and/or requesting answers to interrogatories concerning, among other things, DK Marketplace NFTs that are sold on DK Marketplace, the blockchain on which the NFTs were minted and digital assets and validator nodes associated with that blockchain, and related matters.

Securities Matters Arising From DraftKings Marketplace (“Marketplace”) and Related Matters

On March 9, 2023, a putative class action was filed in Massachusetts federal court by an alleged purchaser of non-fungible tokens (“NFTs”) on the Marketplace.

The complaint asserts claims for violations of federal and state securities laws against the Company and three of its officers on the grounds that, among other things, the NFTs that are sold and traded on Marketplace allegedly constitute securities that were not registered with the SEC in accordance with federal and Massachusetts law, and that Marketplace is a securities exchange that is not registered in accordance with federal and Massachusetts law.

Based on these allegations, the plaintiff brings claims seeking rescissory damages and other relief on behalf of himself and a putative class of persons who purchased NFTs on Marketplace between August 11, 2021 and the present.

On September 25, 2023, defendants filed a motion seeking dismissal of this action.

On July 2, 2024, the district court denied the motion to dismiss.

On February 26, 2025, the parties entered into a Stipulation and Agreement of Settlement subject to, among other things, court approval.

Also on February 26, 2025, the parties filed a motion for preliminary approval of the class action settlement.

On February 28, 2025, the court entered an order preliminarily approving the settlement and scheduled a fairness hearing for July 30, 2025.

We established an accrual for this matter as of December 31, 2024.

We intend to vigorously defend this case.

Beginning in July 2023, the Company received subpoenas from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts seeking information concerning, among other things, Marketplace and NFTs that were sold on Marketplace, and related matters, and from the United States Securities and Exchange Commission seeking documents concerning, among other things, the blockchain on which NFTs that were sold on Marketplace were minted and digital assets and validator nodes associated with that blockchain, and related matters.

We intend to comply with these requests.

Any adverse outcome in the subpoena matters could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of the subpoena matters.

The Company cannot predict with any degree of certainty the outcome of the subpoena matters or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in the subpoena matters could expose the Company to substantial damages, penalties and/or require alterations to the Company’s business that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the subpoena matters will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Shareholder Derivative Litigation Related to DraftKings Marketplace

Any adverse outcome in the subpoena matters could expose the Company to substantial damages, penalties and/or require alterations to the Company that may have a material adverse impact on the Company’s operations and cash flows.

Shareholder Derivative Litigation Related to Marketplace

On May 31, 2023, the first of three substantially similar, putative shareholder derivative actions was filed in Nevada state court by an alleged shareholder of the Company.

The actions purport to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary duty, aiding-and-abetting breach of fiduciary duty, unjust enrichment, and corporate waste based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law and/or operate the Company as an unregistered broker-dealer or securities exchange in violation of applicable law.

Two of the actions also assert that certain of the defendants are liable for causing or allowing the Company to disseminate misleading and inaccurate information to its shareholders in connection with NFTs that are sold and traded on the DK Marketplace.

One of the actions also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The actions seek unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

On October 29, 2024, the court entered a stipulated order consolidating the three actions under the caption In re DraftKings Inc.

Stockholder Derivative Litigation and appointed lead counsel and further ordered that plaintiffs shall file a consolidated amended complaint within sixty days .

Stockholder Derivative Litigation and appointed lead counsel.

On December 23, 2024, the plaintiffs filed a consolidated amended complaint.

The complaint purports to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary

duty, aiding-and-abetting breach of fiduciary duty, unjust enrichment, and corporate waste based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law and/or operate the Company as an unregistered broker-dealer or securities exchange in violation of applicable law.

The complaint also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The actions seek unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

On February 21, 2025, the defendants moved to dismiss the complaint, which motions remain pending.

The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

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On December 8, 2023, plaintiffs Melissa Scanlon and Shane Harris, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in Middlesex County Superior Court of Massachusetts.

On March 26, 2024, the case was transferred to the Business Litigation Session of the Massachusetts Superior Court.

Among other things, plaintiffs allege that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements, were:

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The plaintiffs are seeking, among other things, injunctive relief, actual damages, double or treble damages, and attorneys’ fees.

On March 26, 2024, the case was transferred to the Business Litigation Session (“BLS”) of the Massachusetts Superior Court.

On January 29, 2024, DraftKings filed a motion to dismiss all of plaintiffs’ claims.

On August 19, 2024, the court denied the motion to dismiss.

The Company intends to vigorously defend this case.

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Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On April 17, 2024, plaintiff Samantha Guery, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against DraftKings in the United States District Court for the Southern District of New York.

Among other things, Plaintiff alleges that the Company’s promotion that offered new customers an opportunity to place their first wager “risk free” was (1) “deceptive, unlawful, fraudulent, and unfair” in violation of New York General Business Law Section 349;

and (2) false advertising under New York General Business Law Section 350.

The plaintiffs are seeking, among other things, injunctive relief, actual damages, punitive damages, treble damages, and attorneys’ fees.

On August 9, 2024, plaintiff voluntarily dismissed the lawsuit with prejudice as to plaintiff’s individual claims.

On June 10, 2024, plaintiff Matthew McAfee, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against DraftKings in the Hamilton County Superior Court, State of Indiana.

On July 12, 2024, DraftKings

removed the matter to the United States District Court for the Southern District of Indiana.

Among other things, plaintiff alleges that those customers who had winning bets placed and accepted on the October 24, 2023 Lakers versus Nuggets basketball game that were subsequently canceled by DraftKings for obvious error were not timely canceled and should have been paid.

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plaintiff seeks, among other things, actual and statutory damages, treble and exemplary damages, interest, and attorney fees and costs.

On July 12, 2024, DraftKings removed the matter to the United States District Court for the Southern District of Indiana.

On August 14, 2024, DraftKings filed a motion to dismiss.

On February 7, 2025, the court granted DraftKings’ motion to dismiss as to plaintiff’s DCSA claims and denied DraftKings’ motion to dismiss as to plaintiff’s breach of contract claim.

The court also held that DraftKings may amend its response to plaintiff’s motion for class certification up until February 24, 2025.

On February 12, 2025, McAfee filed a motion for leave to file a first amended complaint.

That motion remains pending.

On November 20, 2024, plaintiff filed a motion for class certification.

On December 16, 2024, DraftKings filed its opposition, and on December 24, 2024, plaintiff filed his reply.

The class certification motion remains pending.

The Company intends to vigorously defend this case.

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Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On September 30, 2024, plaintiff Nerye Aminov, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in the Supreme Court of the State of New York, County of Queens.

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plaintiff seeks to certify a nationwide class, with a New York subclass.

The complaint has not yet been served.

On December 11, 2024, DraftKings removed this matter to the United States District Court for the Eastern District of New York.

DraftKings filed a motion to dismiss on February 3, 2025.

That motion remains pending.

The Company intends to vigorously defend this case.

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Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

National Football League Players Association

On August 20, 2024, the plaintiffs, National Football League Players Association and National Football League Players Incorporated, filed a complaint against DraftKings in the United States District Court for the Southern District of New York alleging, among other things, that DraftKings breached its Licensing Agreement (the “Agreement”) with the plaintiffs.

The plaintiffs are seeking, among other things, payment of all purported unpaid sums due under the Agreement.

The plaintiffs sought, among other things, payment of all purported unpaid sums due under the Agreement.

On November 25, 2024, DraftKings filed a partial motion to dismiss the complaint.

On February 28, 2025, the parties entered into a settlement agreement, and on March 3, 2025, the lawsuit was dismissed with prejudice.

We have established an accrual for this matter as of December 31, 2024.

On December 13, 2024, plaintiff Jeffrey Wan, individually and on behalf of all others similarly situated, filed a purported class action complaint against the Company in the United States District Court for the Southern District of New York.

Plaintiff alleges, among other things, that the Company violated the Video Privacy Protection Act (“VPPA”) through the use of pixels and other tracking technologies on the Company’s website and mobile application in connection with the Company’s online casino games.

DraftKings filed a motion to dismiss on February 21, 2025.

In response, plaintiff filed an Amended Complaint on March 14, 2025, and added a claim that the Company violated the Federal Wiretap Act.

On April 28, 2025, DraftKings filed a motion to dismiss the amended complaint.

That motion remains pending.

Plaintiff seeks, among other things, compensatory, punitive and statutory damages, and declaratory relief.

The Company intends to vigorously defend this case.

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The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On December 23, 2024, plaintiff Eric Avila, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and DK Player Reserve LLC in the United States District Court, District of Massachusetts.

Plaintiff alleges that DraftKings has interfered or prevented customers from withdrawing balances from closed accounts.

Plaintiff asserts claims for breach of contract, violation of Texas Deceptive Trade Practices Act, fraud, unjust enrichment, and conversion.

Plaintiff seeks, on behalf of himself and the purported class, damages, punitive damages and attorney fees.

Plaintiff seeks a nationwide class of (i) all persons whose DraftKings’ accounts were terminated by DraftKings and who were denied access to their account balances by DraftKings;

and (ii) a Texas subclass of all persons in Texas whose DraftKings accounts were terminated by DraftKings and who were denied access to their account balances by DraftKings.

On April 1, 2025, DraftKings filed a motion to dismiss.

That motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On January 7, 2025, plaintiff Matthew Youngs, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown NJ Gaming Inc.

dba DraftKings, DGMB Casino LLC and Resorts Atlantic City in the United States District Court, District of New Jersey.

Among other things, plaintiff alleges that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a sportsbook deposit match, as well as promotions that offered site credits in connection with a casino deposit match, were unfair, unconscionable, and misleading.

The plaintiff's complaint, as amended, asserts claims for violation of the New Jersey Consumer Fraud Act, intentional misrepresentation, unjust enrichment, and conversion.

Plaintiff seeks compensatory damages, punitive damages, attorney fees and costs.

Plaintiff seeks to certify a nationwide class of anyone who participated in the casino deposit match promotion and lost part or all of their initial deposit (with subclasses for New Jersey, Connecticut, Pennsylvania, Michigan, and West Virginia).

Plaintiff also seeks a statewide class of (i) anyone in New Jersey who allegedly opted into the “risk free” or “no sweat” promotion and lost a bet;

and (ii) anyone in New Jersey who opened an account and deposited money while in New Jersey in response to the 1,000 new customer sportsbook deposit match promotion.

On March 27, 2025, DraftKings filed a motion to dismiss the complaint.

In response to the motion to dismiss, on April 17, 2025, plaintiff Matthew Youngs and a second plaintiff (Jason Lombardozzi), individually and on behalf of all others similarly situated, filed a first amended purported class action complaint against DraftKings Inc.

and Crown NJ Gaming Inc.

dba DraftKings.

In the amended complaint, the plaintiffs removed DGMB Casino and Resorts Atlantic as defendants and removed claims of negligence.

In the amended complaint, the plaintiffs added new claims alleging that (i) the casino deposit match was unconscionable because it inculcated gaming addiction and (ii) the Company engaged in unconscionable conduct by targeting customers with deposit match promotions after such customers had become addicted to gaming.

The court terminated the Defendants’ motion to dismiss as moot due to the plaintiffs filing an amended complaint.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome

in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

James Beyer and Wyatt Robertson

On January 7, 2025, plaintiffs James Beyer and Wyatt Robertson, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and Crown KY Gaming LLC in the United States District Court, Western District of Kentucky.

Among other things, plaintiffs alleged that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a deposit match, were unfair and misleading.

Plaintiffs also alleged that DraftKings targets underage users with its advertising and by allowing them to participate in daily fantasy sports contests in order to inculcate gaming habits.

Plaintiffs brought claims for violation of the Kentucky Consumer Protection Act, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs sought, among other things, compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who opted into a DraftKings promotion advertising a “risk-free” or “no sweat” bet and lost their bet (with a Kentucky subclass);

(ii) anyone who opened an account and deposited money in response to the new customer 1,000 site credit promotion (with a Kentucky subclass);

and (iii) anyone who opened an account and entered free promotions on DraftKings’ platform before reaching their legal gaming age and then placed paid bets on DraftKings after reaching the legal gaming age (with a Kentucky subclass).

Plaintiffs also sought a declaration that DraftKings has breached agreements with Apple and Google relating to their respective app stores.

On March 31, 2025, DraftKings filed a motion to dismiss.

On April 28, 2025, the parties filed a stipulated dismissal of the lawsuit, without prejudice as to the individual claims of Mr.

Beyer and the putative class and with prejudice as to the individual claims of Mr.

On May 1, 2025, the court entered an order whereby (1) dismissing without prejudice the claims asserted by plaintiff James Beyer and the putative class against the Company, and (2) dismissing with prejudice the claims asserted by plaintiff Wyatt Robertson against the Company.

James Beyer, Collin Smothers, Mateen Zafer and Corey Davis

On January 8, 2025, plaintiffs James Beyer, Collin Smothers, Mateen Zafer and Corey Davis, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown IL Gaming LLC dba DraftKings, Northside Crown Gaming LLC, and Casino Queen Inc.

in the Circuit Court of Cook County, Illinois Law Division.

Plaintiffs also allege that DraftKings targets underage users with its advertising and by allowing them to participate in daily fantasy sports contests in order to inculcate gaming habits.

Plaintiffs bring claims for violation of the Illinois Consumer Fraud and Deceptive Practices Act, intentional misrepresentation, fraudulent inducement, unjust enrichment, civil conspiracy, and declaratory relief.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who opted into a DraftKings promotion advertising a “risk-free” or “no sweat” bet and lost their bet (with an Illinois subclass);

(ii) anyone who opened an account and deposited money in response to the new customer 1,000 site credit promotion (with an Illinois subclass);

and (iii) anyone who opened an account and entered free promotions on DraftKings’ platform before turning twenty-one years old and then placed paid bets on DraftKings after turning twenty-one years old (with an Illinois subclass).

On February 7, 2025, DraftKings removed the complaint to the United States District Court, Northern District of Illinois, Eastern Division.

On April 4, 2025, DraftKings filed a motion to dismiss.

That motion remains pending.

On April 25, 2025, the parties agreed to extend plaintiffs’ time to file an anticipated First Amended Complaint in lieu of an opposition until May 9, 2025.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Clara De Leon and Eric Mirsberger Jr.

On January 22, 2025, plaintiffs Clara De Leon and Eric Mirsberger Jr., individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and Crown NY Gaming Inc.

in the United States District Court, Southern District of New York.

Plaintiffs also allege that DraftKings targets players with gaming addiction issues, including by pairing players who bet large amounts of money with VIP hosts who, plaintiffs allege, are trained to encourage customers to place frequent and large bets.

Plaintiffs brings claims for violation of the New York General Business Law sections 349 and 350, negligence, intentional misrepresentation, fraudulent inducement, unjust enrichment, and declaratory relief.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek a nationwide class of (i) anyone who allegedly opted into the “risk free” or “no sweat” promotion and lost a bet (with a New York subclass);

(ii) anyone who allegedly opened an account and deposited money in response to the new customer 1,000 site credit promotion (with a New York subclass);

and (iii) anyone who was allegedly enticed by DraftKings’ VIP hosts to bet beyond their means (with a New York subclass).

Plaintiffs also seek a declaration that DraftKings has breached agreements with Apple and Google relating to their respective app stores.

On April 8, 2025, DraftKings filed a motion to dismiss.

On April 9, 2025, the court ordered plaintiffs to file an amended complaint, if any, by May 2, 2025.

On April 29, 2025, plaintiffs filed a motion to extend their time to file an amended complaint through May 16, 2025.

On April 30, 2025, the court granted the motion for extension of time, and denied as moot the motion to dismiss.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On February 10, 2025, Winview IP Holdings, LLC (“Winview IP”) filed suit against DraftKings Inc., a Nevada corporation, DK Crown Holdings Inc., Crown Gaming Inc., SBTech US Inc., and SBTech (Global) Ltd.

District Court for the District of New Jersey.

In the complaint, Winview IP alleges that the Defendants infringe nine patents:

11,185,770 (“the ’770 Patent”), entitled “Methodology for equalizing systemic latencies in television reception in connection with games of skill played in connection with live television programming,” U.S.

11,235,237 (“the ’237 Patent”), entitled “Methodology for equalizing systemic latencies in television reception in connection with games of skill played in connection with live television programming,” U.S.

11,338,189 (“the ’189 Patent”), entitled “Method of and system for conducting multiple contests of skill with a single performance,” U.S.

11,451,883 (“the ’883 Patent”), entitled “Method of and system for managing client resources and assets for activities on computing devices,” U.S.

11,678,020 (“the ’020 Patent”), entitled “Methodology for equalizing systemic latencies in television reception in connection with games of skill played in connection with live television programming,” U.S.

11,736,771 (“the ’771 Patent”), entitled “Methodology for equalizing systemic latencies in television reception in connection with games of skill played in connection with live television programming,” U.S.

11,918,880 (“the ’880 Patent”), entitled “Method of and system for conducting multiple contests of skill with a single performance,” U.S.

11,951,402 (“the ’402 Patent”), entitled “Method of and system for conducting multiple contests of skill with a single performance,” and U.S.

12,005,349 (“the ’349 Patent”), entitled “Synchronized gaming and programming.” The allegations based on:

the ’770 Patent are directed to DK Sportsbook, DK Casino, and DK Horse;

the ’237 Patent are directed to DK Sportsbook and DK Horse;

the ’189 Patent are directed to DFS and Pick6;

the ’883 Patent are directed to DK Sportsbook, DK Horse, DK Casino, DFS, and Pick6;

the ’020 Patent are directed to DK Sportsbook, DK Horse, and DK Casino;

the ’771 Patent are directed to DK Sportsbook, DK Horse, and DK Casino;

the ’880 Patent are directed to DFS and Pick6;

the ’402 Patent are directed to DFS and Pick6;

and the ’349 Patent are directed to DK Sportsbook, DK Horse, and DK Casino.

On April 17, 2025, in accordance with the applicable local rules, DraftKings filed a letter requesting permission to move to dismiss the Complaint.

On April 24, 2025, WinView filed a letter in opposition to DraftKings’ request.

The court has not yet ruled on the request.

We intend to vigorously defend this case.

We cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

DC Gambling Recovery LLC v.

Caesars et al.

On February 28, 2025, DC Gambling Recovery LLC filed a lawsuit against DraftKings, Caesars, Fanduel, BetMGM, and Fanatics in state court in the District of Columbia.

On April 4, 2025, the defendants removed the lawsuit to the United States District Court for the District of Columbia.

Plaintiff alleges that the Defendants violated the Statute of Anne (D.C.

Code § 16-1702), a statute which purportedly allows an individual to recover their betting losses greater than twenty-five dollars from each sportsbook, and should such party fail to sue within three months, the statute purportedly authorizes any person to file suit against the sportsbook to recover the losses (including treble damages).

Plaintiff also alleges that the Supreme Court’s 2018 decision striking down the Professional and Amateur Sports Protection Act (“PAPSA”) does not apply to the District of Columbia and, therefore, the Sports Wagering Lottery Amendment Act (“SWLAA”), a 2019 law that legalized sports betting in the District of Columbia, is without any legal force or effect.

Plaintiff also alleges that the Statute of Anne permits recovery of betting losses greater than twenty-five dollars even if the SWLAA has legal force or effect.

Plaintiff seeks to recover on behalf of all individuals within the District of Columbia that (i) have lost more than $25 at any single time or sitting by sports betting with DraftKings and (ii) not sued to recover those losses within three months of payment to DraftKings.

On May 5, 2025, DraftKings filed a motion to dismiss the complaint, which motion remains pending.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

City of Baltimore

On April 3, 2025, the City of Baltimore filed a lawsuit against DraftKings and FanDuel seeking civil penalties and injunctive relief under Baltimore City Code Art.

2, Section 4.

The City alleges that DraftKings violated Baltimore City Code Art.

2, section 4 by committing unfair, abusive and deceptive trade practices by allegedly (i) using data to allegedly target vulnerable Baltimore users;

(ii) using misleading promotions such as “bonus bets” or “no-sweat bets;” (iii) concealing or misrepresenting the terms and conditions of those promotions;

(iv) using data to identify Baltimore users with an alleged gaming disorder and then directing promotions at them;

(v) directing messages with misleading urgency to those who allegedly may have gaming disorders;

(vi) using the VIP program to allegedly exploit people with alleged gaming disorders;

(vii) offering escalating rewards through its VIP program to target alleged users with gaming disorders;

and (viii) failing to implement responsible gaming measures.

The City of Baltimore seeks injunctive relief and statutory penalties for each violation of Baltimore City Code Art.

2, section 4.

On May 7, 2025, the defendants removed the lawsuit from state court to the United States District Court for the District of Maryland (Northern Division).

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome

in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On April 18, 2025, plaintiffs Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea, and Robert Walker, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc., Crown PA Gaming Inc.

dba DraftKings, and Golden Nugget Online Gaming LLC in the United States District Court, Eastern District of Pennsylvania.

Among other things, plaintiffs allege that the Company’s “risk-free” and “no sweat” promotions, and the promotion that offered new customers an opportunity to earn up to 1,000 site credits as a sportsbook deposit match, as well as promotions that offered site credits in connection with a casino deposit match, were unfair, unconscionable, and misleading.

Plaintiffs also allege that DraftKings targets players with gaming addiction issues, including by assigning certain players with VIP hosts.

Plaintiffs assert claims for violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, negligence, intentional misrepresentation, failure to warn, fraudulent inducement, unjust enrichment, intentional infliction of emotional distress and conversion.

Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorney fees and costs.

Plaintiffs seek to certify a nationwide class of (i) anyone who participated in the casino deposit match promotion and lost part or all of their initial deposit (with a Pennsylvania subclass);

(ii) anyone who allegedly opted into the “risk free” or “no sweat” promotion (with a Pennsylvania subclass);

(iii) anyone who allegedly deposited money in response to the 1,000 new customer sportsbook deposit match promotion (with a Pennsylvania subclass);

(iv) anyone who developed or displayed problem gaming behavior and was allegedly targeted by DraftKings’ VIP hosts or promotions or otherwise induced to game or continue to game (with a Pennsylvania subclass);

and (v) anyone who was allegedly permitted to continue gaming after self-excluding or who asked DraftKings to suspend or close their account (with a Pennsylvania subclass).

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Other Litigation

In addition to the above actions, we are subject to various other legal proceedings and claims that arise in the ordinary course of business.

In our opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our financial condition, results of operations or liquidity, though the outcomes could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

Internal Revenue Service

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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-Q

Item 1. Financial Statements