What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-09 · 309 added, 193 removed, 900 unchanged (36% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

March 31, 2025

June 30, 2025

(Unaudited) December 31, 2024

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Term B Loan, net of issuance costs 578,499 —

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

Operating lease liabilities 62,332 67,660

Warrant liabilities 14,205 22,033

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Total liabilities $ 3,464,674 $ 3,273,099

Commitments and contingent liabilities (Note 5 and 13)

Commitments and contingent liabilities (Notes 5 and 13)

Stockholders’ equity:

Class A common stock, $ 0.0001 par value;

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

900,000 shares authorized as of June 30, 2025 and December 31, 2024;

520,537 and 504,722 shares issued and 496,051 and 489,071 outstanding as of June 30, 2025 and December 31, 2024, respectively

Class B common stock, $ 0.0001 par value;

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

900,000 shares authorized as of June 30, 2025 and December 31, 2024;

393,014 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Treasury stock, at cost;

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

24,486 and 15,651 shares as of June 30, 2025 and December 31, 2024, respectively

( 907,739 ) ( 563,146 )

8 unchanged sentences

(Amounts in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 1,512,507 $ 1,104,441 $ 2,921,313 $ 2,279,437

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Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.07 ) $ ( 0.30 )

Basic $ 0.32 $ 0.13 $ 0.25 $ ( 0.17 )

Diluted $ 0.30 $ 0.10 $ 0.23 $ ( 0.17 )

See accompanying notes to unaudited condensed consolidated financial statements.

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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 736 — — — 2,908 — — — 2,908

Stock-based compensation — — — — 89,792 — — — 89,792

Exercise of warrants 74 — — — 2,212 — — — 2,212

Purchase of treasury stock for RSU withholding ( 780 ) — — — — — — ( 27,534 ) ( 27,534 )

Shares issued under Employee Stock Purchase Plan 218 — — — 6,900 — — — 6,900

Shares issued for contingent consideration 110 — — — 4,962 — — — 4,962

Restricted stock unit vesting 2,226 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 2,872 ) — — — — — — ( 100,463 ) ( 100,463 )

Net income (loss) — — — — — 157,936 — — 157,936

Balances at June 30, 2025 496,051 $ 48 393,014 $ 39 $ 8,197,948 $ ( 6,317,156 ) $ 36,488 $ ( 907,739 ) $ 1,009,628

See accompanying notes to unaudited condensed consolidated financial statements.

DRAFTKINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands)

Class A Common Stock Class B Common Stock Additional

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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 257 — — — 2,586 — — — 2,586

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

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

Purchase of treasury stock for RSU withholding ( 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

See accompanying notes to unaudited condensed consolidated financial statements.

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(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities:

Net income (loss) attributable to common stockholders $ 124,072 $ ( 78,746 )

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

Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:

Depreciation and amortization 135,415 114,803

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Deferred income taxes 96 ( 79,762 )

Other expenses (income), net 2,499 627

Other non-cash (gain) loss, net ( 16,422 ) 1,920

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

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Cash paid for internally developed software costs ( 60,414 ) ( 44,072 )

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

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

Cash paid for gaming market access and licenses ( 2,234 ) ( 12,695 )

Cash paid for acquisitions, net of cash acquired — ( 392,013 )

Other investing activities ( 4,667 ) ( 2,308 )

Net cash flows provided by (used in) investing activities $ ( 74,278 ) $ ( 456,534 )

1 unchanged sentence

Proceeds from Term B Loan, net 588,116 —

Repayment of Term B Loan principal ( 1,500 ) —

Purchase of treasury stock for RSU withholding ( 101,852 ) ( 57,912 )

1 unchanged sentence

Proceeds from exercise of stock options 6,304 5,443

Other financing ( 2,093 ) —

Proceeds from shares issued under Employee Stock Purchase Plan 6,900 —

Other financing activities ( 2,093 ) —

Net cash flows provided by (used in) financing activities $ 253,134 $ ( 52,469 )

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Investing activities included in accounts payable and accrued expenses $ 1,084 $ 1,709

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

Decrease of warrant liabilities from cashless exercise of warrants $ 11,185 $ 46,398

Shares issued for contingent consideration $ 4,962 $ —

Supplemental Disclosure of Cash Activities:

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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 March 31, 2025, 39 U.S.

In May 2018, the U.S.

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 June 30, 2025, 39 U.S.

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

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

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

As of June 30, 2025, the U.S.

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

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.

As of June 30, 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 June 30, 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.

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Basis of Presentation and Principles of Consolidation

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim reporting.

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digital lottery courier business 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 months ended March 31, 2025.

Preliminary Purchase Price Accounting for the Jackpocket Transaction

Purchase Price Accounting for the Jackpocket Transaction

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

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’ s Class A common stock, which were issued to certain Jackpocket employee option holders in exchange for their Jackpocket options.

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 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.

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

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

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

Cash and cash equivalents $ 45,999

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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 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.

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Transaction Costs

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.

For the three and six months ended June 30, 2024, the Company incurred $ 10.4 million and $ 15.3 million, respectively, in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, which were included in general and administrative expenses.

There were no such costs incurred for the three and six months ended June 30, 2025.

Acquisition of Simplebet, Inc.

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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

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(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.

(2) Contingent consideration of up to 3.5 million shares of DraftKings Inc.’s Class A common stock may be payable through December 31, 2026, 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”.

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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.

For the three and six months ended June 30, 2025 and June 30, 2024, the Company incurred no advisory, legal, accounting and management fees in connection with the Simplebet Transaction.

Other 2024 Acquisitions

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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 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 fair value estimate on each date of acquisition 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.

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Intangible Assets

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

As of June 30, 2025, intangible assets, net consists of the following:

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

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

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

Amortization expense was $ 60.8 million and $ 126.5 million for the three and six months ended June 30, 2025, respectively, and $ 56.3 million and $ 103.6 million for the three and six months ended June 30, 2024, respectively.

Current and Long-term Liabilities

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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.

As of June 30, 2025, the Credit Agreement provided a Revolving Credit Facility of up to $ 500.0 million, and there was no principal outstanding thereunder.

As of June 30, 2025, $ 10.0 million in letters of credit were issued under the Revolving Credit Facility, 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”).

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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.

The amortization of debt issuance costs was $ 0.5 million and $ 0.7 million for the three and six months ended June 30, 2025, respectively, which is included in interest expense on the Company’s condensed consolidated statements of operations.

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.

As of June 30, 2025, there were $ 598.5 million aggregate principal amount of Term B Loan outstanding.

As of June 30, 2025, the fair value of the Term B Loan approximates the carrying value, which was calculated using the estimated or actual bids and offers of the Term B Loan in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

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.

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

As of June 30, 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 condensed consolidated balance sheet.

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:

As of June 30, 2025, the Company’s convertible debt balance was $ 1,257.8 million, net of unamortized debt issuance costs of $ 7.2 million.

The amortization of debt issuance costs was $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 2025, respectively, and $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 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 $ 1,134.9 million and $ 1,076.9 million as of June 30, 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 June 30, 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

July 1, 2025 to December 31, 2025 $ 2,989

2028 1,270,815

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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 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.

As of June 30, 2025 and December 31, 2024, the Company’s estimated contingent liability for indirect taxes was $ 89.4 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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As part of the initial public offering of Diamond Eagle Acquisition Corp.

(“DEAC”) on May 14, 2019 (the “IPO”), DEAC issued 13.3 million 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 (the “Public Warrants”).

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

(“DEAC”) on May 14, 2019 (the “IPO”), DEAC issued 13.3 million warrants each of which entitled the holder to purchase one share of DraftKings Inc.’s Class A common stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

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 entitled 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 June 30, 2025, there were no Public Warrants or Private Warrants outstanding.

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

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

As of June 30, 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 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.

As of June 30, 2025, the fair value of the Company’s warrant liability was $ 14.2 million.

Due to fair value changes throughout the three months ended June 30, 2025 and 2024, the Company recorded a loss on the remeasurement of its warrant liabilities of $ 5.9 million and a gain on the remeasurement of its warrant liabilities of $ 9.8 million, respectively.

During the six months ended June 30, 2025 and 2024, the Company recorded a loss on the remeasurement of its warrant liabilities of $ 3.4 million and $ 8.3 million, respectively.

During the three and six months ended June 30, 2025, 0.1 million and 0.3 million Private Warrants were exercised, respectively.

There were no GNOG Private Warrants exercised during the three and six months ended June 30, 2025.

These Private Warrants exercises resulted in a reclassification to additional paid-in-capital in the amount of $ 2.2 million and $ 11.2 million for the three and six months ended June 30, 2025, respectively.

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

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 March 31, 2025 and December 31, 2024 based on the three-tier fair value hierarchy:

March 31, 2025

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of June 30, 2025 and December 31, 2024 based on the three-tier fair value hierarchy:

June 30, 2025

Level 1 Level 2 Level 3 Total

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Money market funds $ 278,780 (1)

$ — $ — $ 278,780

Other non-current assets:

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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 three months ended March 31, 2025.

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

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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 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.

Changes to fair value of these instruments are

recorded in Other gain (loss), net on the condensed consolidated statements of operations in the condensed consolidated statements of cash flows.

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.

(5) Represents the contingent consideration issuable to former SIQ, Dijon and Simplebet securityholders in connection with the acquisition of SIQ, the acquisition of Dijon 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.

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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

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

June 30, 2025 December 31, 2024

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

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65.0 % - 70.0 % ( 66.4 %)

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

Three Months Ended March 31, 2025

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

Six Months Ended June 30, 2025

Balance at January 1, 2025 $ 77,965

Settlement of contingent consideration liabilities ( 3,300 )

Balance at March 31, 2025 $ 74,665

Fair value adjustment to contingent consideration liabilities ( 20,096 )

Balance at June 30, 2025 $ 54,569

Revenue Recognition

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The deferred revenue balances were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Deferred revenue, beginning of the period $ 133,700 $ 128,869 $ 166,463 $ 174,212

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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,

Disaggregation of revenue for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Sportsbook $ 997,872 $ 686,889 $ 1,879,829 $ 1,420,944

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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.

The opening and closing balances of the Company ’ s accounts receivable from contracts with customers were $ 57.8 million and $ 69.0 million for the six months ended June 30, 2025, respectively, and $ 47.5 million and $ 65.0 million for the six months ended June 30, 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 three months ended March 31, 2025:

The following table shows restricted stock unit (“RSU”) and stock option activity for the six months ended June 30, 2025:

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

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Forfeited ( 6 ) ( 849 ) ( 267 ) ( 68 ) ( 1,190 ) 18.01 26.20

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

Outstanding at June 30, 2025 18,965 17,106 11,340 420 47,831 $ 9.28 $ 28.98

As of June 30, 2025, total unrecognized stock-based compensation expense of $ 697.3 million related to granted, and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.7 years.

The following tables shows stock compensation expense for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Options RSUs Total Options RSUs Total

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Total $ 1,964 $ 82,737 $ 84,701 $ 7,934 $ 82,286 $ 90,220

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Options RSUs Total Options RSUs Total

Time-based (1)

$ 3,900 $ 97,321 $ 101,221 $ 9,978 $ 82,797 $ 92,775

— 61,215 61,215 — 89,801 89,801

— 1,111 1,111 — 1,179 1,179

Total $ 3,900 $ 159,647 $ 163,547 $ 9,978 $ 173,777 $ 183,755

(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,

The Company’s income tax provision (benefit) for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Income tax provision (benefit) $ 11,790 $ ( 73,570 ) $ 6,190 $ ( 73,921 )

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.

The effective tax rates for the three months ended June 30, 2025 and 2024 were 6.9 % and 773.6 %, respectively, and the effective tax rates for the six months ended June 30, 2025 and 2024 were 4.7 % and 48.4 %.

The difference between the Company’s effective tax rates for the three and six 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.

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (the “Act”), which introduced significant changes to the U.S.

federal income tax code.

The Act includes provisions affecting corporate tax rates on specified eligible income, timing of tax deductibility of depreciation, interest expense and research and development costs, and the taxation of foreign income.

The effects of these changes will be recognized in the period that contains the effective date of the relevant change.

We currently do not expect the Act to have a material impact on our financial statements.

We will continue to evaluate the broader implications of the Act, including the potential effects of future regulatory guidance and interpretations.

Additional adjustments may be required in periods subsequent to enactment as further information becomes available.

Segment Information

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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 Company drives revenue primarily in North America and manages its 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.

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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 measure of segment assets is reported on the condensed consolidated balance sheets 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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Total revenue $ 1,512,507 $ 1,104,441 $ 2,921,313 $ 2,279,437

Cost of revenue:

Gaming taxes 501,929 380,686 985,332 782,359

Other adjusted cost of revenue (1)

Cost of revenue:

291,736 246,893 586,345 507,104

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

Adjusted sales and marketing expenses (2)

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Stock-based compensation 84,701 90,220 163,547 183,755

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) 11,790 ( 73,570 ) 6,190 ( 73,921 )

Other expenses (6)

Other segment items (3)

( 18,417 ) ( 594 ) ( 20,890 ) 32,418

Consolidated net income (loss) $ 157,936 $ 63,822 $ 124,072 $ ( 78,746 )

(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;

(1) Cost of revenue:

Other includes all cost of revenue, other than gaming tax, presented in the condensed consolidated statements of operations, adjusted for the impact of depreciation and amortization and stock-based compensation.

(2) These items represent the respective line items in the condensed consolidated statements 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;

certain litigation, settlement and related costs;

certain 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.

(3) Other segment items include:

(i) transaction-related costs (ii) certain external legal costs related to litigation and litigation settlement costs deemed unrelated to our ordinary-course business operations;

(iii) 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, excluding 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 costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate;

(iv) (gain) loss on remeasurement of warrant liabilities;

(v) (gain) loss from equity method investments;

and (vi) other items not associated with our primary offerings, such as gains or losses on contingent consideration, gain or losses on business disposals and termination-related expenses.

Earnings (Loss) Per Share

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

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 months ended March 31, 2025.

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 months ended March 31, 2025 and 2024:

March 31, 2025 March 31, 2024

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income (loss) attributable to common stockholders – basic $ 157,936 $ 63,822 $ 124,072 $ ( 78,746 )

Loss (gain) on remeasurement of warrant liabilities ( 990 ) ( 9,791 ) ( 1,483 ) —

Net income (loss) attributable to common stockholders – diluted $ 156,946 $ 54,031 $ 122,589 $ ( 78,746 )

Weighted-average Class A common stock outstanding – basic 496,517 479,307 494,945 476,788

Weighted-average diluted impact of options and RSUs (1) 19,578 25,616 21,109 —

Weighted-average diluted impact of convertible notes (2) 13,337 13,337 13,337 —

Weighted-average diluted impact of warrant liabilities (1) 22 525 160 —

Weighted-average Class A common stock outstanding – diluted 529,454 518,785 529,551 476,788

Anti-dilutive securities excluded from the calculation of diluted earnings per share 12,697 6,308 10,649 N/A

Basic earnings per share attributable to common stockholders:

$ 0.32 $ 0.13 $ 0.25 $ ( 0.17 )

Diluted earnings per share attributable to common stockholders:

$ 0.30 $ 0.10 $ 0.23 $ ( 0.17 )

(1) Calculated using the treasury stock method

(2) Calculated using if-converted method

There were no preferred or other dividends declared for the three and six months ended June 30, 2025.

The below table includes the total securities potentially dilutive for the three and six months ended June 30, 2025 and 2024, which have been excluded from the computation of diluted earnings (loss) per share.

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Class A common stock resulting from exercise of all warrants 1,074 — 1,074 1,441

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Total 24,038 22,107 21,990 71,579

The Company has contingent consideration arrangements related to business combinations as disclosed in “Note 3 – Business Combinations”.

Those potential shares have been excluded from the computations and tables above as they are contingently issuable shares, and the contingency to which the issuance relates was not met at the end of the reporting period.

Related-Party Transactions

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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.

As of June 30, 2025, the Company had invested a total of $ 11.9 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.

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The audit and compensation committees of the Company’s Board of Directors approved this arrangement, as well as the Aircraft Leases, based on, among other things, the requirements of the overall security program that Mr.

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

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

During the three and six months ended June 30, 2025, the Company incurred $ 0.1 million and $ 0.3 million of expense under the Aircraft Leases, respectively, as well as $ 1.1 million for upgrades related to the aircraft.

Commitments and Contingencies

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Years Ending December 31,

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

From July 1, 2025 to December 31, 2025 $ 219,628

Thereafter 80,625

Total $ 794,915

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.

As of June 30, 2025 , the Company has been issued $ 460.0 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.

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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’s Stock Repurchase Program does not require it to acquire any specific number or amount of its 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.

The Company repurchased 2.9 million shares for $ 100.5 million and 6.5 million shares for $ 242.7 million during the three and six months ended June 30, 2025, respectively, under the Stock Repurchase Program.

Contingencies

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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 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.

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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.

On July 11, 2025, the court granted the Company’s motion to dismiss without prejudice.

We intend to vigorously defend this case.

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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 May 9, 2025, the PTAB issued a final written decision finding all claims of the ’779 Patent that were asserted in the litigation unpatentable.

On July 7, 2025, Colossus filed a Notice of Appeal in the United States Court of Appeals for the Federal Circuit, challenging the PTAB’s final written decision in the IPR directed to the ’779 Patent.

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

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Plaintiff has not yet filed an amended pleading.

On July 30, 2025, the Court conducted a hearing on the plaintiff’s request for a Status Conference and a Case Management Order.

The Court ordered that Plaintiff file an amended complaint, if any, ten ( 10 ) days from July 30, 2025.

The Company intends to vigorously defend this suit.

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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.

The complaint asserted 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 constituted 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 brought 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.

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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.

On July 30, 2025, the court entered its Order and Final Judgment, among other things, certifying the settlement class, approving the settlement and dismissing the action with prejudice.

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.

Beginning in July 2023, the Company received subpoenas from the Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts (the “Massachusetts Securities Division”) 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 (the “SEC”) 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.

On June 3, 2025, the SEC informed the Company that it concluded its inquiry.

We have complied with the request by the Massachusetts Securities Division.

Any adverse outcome in the Massachusetts Securities Division 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 Massachusetts Securities Division matter.

The Company cannot predict with any degree of certainty the outcome of the Massachusetts Securities Division matter 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 that may have a material adverse impact on the Company’s operations and cash flows.

Any adverse outcome in the Massachusetts Securities Division matter 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

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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 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.

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(1) Indiana Deceptive Consumer Sales Act – Incurable Deceptive Act;

(2) Indiana Deceptive Consumer Sales Act – Uncured Deceptive Act;

Deceptive Consumer Sales Act – Uncured Deceptive Act;

and (3) breach of contract.

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

That motion remains pending.

On May 9, 2025, the court denied the motion to amend.

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.

On June 11, 2025, Plaintiff filed an amended motion for class certification.

On June 27, 2025, DraftKings filed an opposition, and Plaintiff filed a reply on July 7, 2025.

The class certification motion remains pending.

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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.

Among other things, plaintiff alleges that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements were unfair or deceptive practices in violation of New York General Business Law §§ 349-350.

Plaintiff also asserts claims for intentional misrepresentation, fraudulent inducement, and quasi-contract/unjust enrichment.

Among other things, plaintiff alleged that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements were unfair or deceptive practices in violation of New York General Business Law §§ 349-350.

Plaintiff also asserted claims for intentional misrepresentation, fraudulent inducement, and quasi-contract/unjust enrichment.

Plaintiff seeks, among other things, injunctive relief, actual damages, punitive damages, and attorneys’ fees.

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

Plaintiff sought to certify a nationwide class, with a New York subclass.

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.

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 July 28, 2025, the court granted DraftKings’ motion to dismiss as to all claims with prejudice, and on July 29, 2025, judgment was entered dismissing the complaint.

National Football League Players Association

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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.

Plaintiff alleged, 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.

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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.

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 June 20, 2025, the parties entered into a settlement agreement, and the lawsuit was thereafter dismissed.

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;

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

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

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

Plaintiff sought 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 June 13, 2025, the parties entered into a settlement agreement, and the lawsuit was thereafter dismissed.

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.

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

On May 22, 2025, DraftKings filed a motion to dismiss the amended complaint.

On July 23, 2025, the court granted the motion to dismiss with prejudice regarding the unjust enrichment claim and dismissing without prejudice all other claims.

Plaintiffs have until August 13, 2025 to file a further amended complaint.

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.

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

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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.

In response, on May 9, 2025, Plaintiffs filed their First Amended Complaint.

On June 12, 2025, DraftKings filed a motion to dismiss the First Amended Complaint.

Plaintiffs filed their Opposition to the Motion to Dismiss on July 9, 2025, and DraftKings’ filed its reply on July 28, 2025.

The Company intends to vigorously defend this case.

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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.

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 (the “Original Complaint”) against DraftKings Inc.

and Crown NY Gaming Inc.

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

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 deposit match, were unfair and misleading.

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.

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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.

On April 9, 2025, the court ordered plaintiffs to file an amended complaint, if any, and on May 16, 2025, Plaintiffs filed an amended putative class action complaint on behalf of Clara De Leon, Eric Mirsberger Jr., Joseph Mitchell, and Edward Mendez (the “First Amended Complaint”).

In addition to the claims and theories set forth in the Original Complaint, the First Amended Complaint asserts additional causes of action, including alleged breaches of fiduciary duty and product liability claims based on theories of design defect and failure to warn.

On June 20, 2025, DraftKings filed a motion to dismiss, and Plaintiffs filed their opposition on July 17, 2025.

DraftKings filed its reply on August 4, 2025.

The Company intends to vigorously defend this case.

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On May 5, 2025, DraftKings filed a motion to dismiss the complaint, which motion remains pending.

On May 14, 2025, the court granted the District of Columbia’s motion to intervene.

On June 16, 2025, Plaintiff filed its opposition to Defendants’ motions to dismiss;

on June 23, 2025, the District of Columbia filed a brief in support of Defendants motion to dismiss;

on July 7, 2025, DraftKings filed its reply in support of its motion to dismiss and Plaintiff filed its response to the District of Columbia’s brief;

and on July 14, 2025, the District of Columbia filed its reply.

The Company intends to vigorously defend this case.

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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).

On June 6, 2025, the City filed a motion to remand the case to state court.

On July 7, 2025, Defendants filed their opposition to the motion to remand, and Plaintiffs’ filed their reply on July 28, 2025.

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.

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 assert causes of action 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);

Plaintiffs seek to certify a nationwide class relating to the Promotions Claims, of:

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).

and (iii) anyone who allegedly deposited money in response to the 1,000 new customer sportsbook deposit match promotion (with a Pennsylvania subclass).

Plaintiffs also seek to certify a class relating to alleged addiction claims, of (i) 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 (ii) 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).

On June 24, 2025, Defendants filed a motion to dismiss.

In response, on July 15, 2025, Plaintiffs filed a first amended complaint (the “First Amended Complaint”), removing Plaintiff Walker and adding new Plaintiffs Shane Spencer and Rangaraj Sadagopan.

The First Amended Complaint removed all of the allegations, purported classes, and causes of actions relating to the Promotions Claims.

The First Amended Complaint only alleges claims and causes of action relating to alleged addiction matters, as follows:

negligence, breach of fiduciary duty, unjust enrichment, intentional infliction of emotional distress, and strict and negligent products liability.

The First Amended Complaint also contains individual claims for breach of contract and conversion based on the closure of Plaintiff Setton’s account.

In the First Amended Complaint, 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 developed or displayed problem gaming behavior and was allegedly targeted by DraftKings’ VIP hosts or otherwise induced to game or continue to game (with a Pennsylvania subclass);

(ii) anyone who was allegedly permitted to continue gaming after asking DraftKings to suspend or close their account (with a Pennsylvania subclass);

and (iii) anyone who was exposed to the allegedly dangerous design of features of DraftKings’ app and could not control their compulsive gaming (with a Pennsylvania subclass).

On July 29, 2025, DraftKings filed a 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 July 15, 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 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 DraftKings or Golden Nugget’s casino deposit match promotion and lost part or all of their initial deposit (with a Pennsylvania subclass);

(ii) anyone who allegedly opted into DraftKings’ “risk free” or “no sweat” promotion and lost their bet (with a Pennsylvania subclass);

and (iii) anyone who allegedly deposited money in response to DraftKings’ $1,000 new customer sportsbook deposit match promotion (with a Pennsylvania subclass).

Plaintiffs bring consumer protection, fraud, and unjust enrichment claims.

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 June 1, 2025, Plaintiffs Brandon Moore, Zhicheng Zhen, and Jonathan Smith, individually and on behalf of all others similarly situated, filed a purported class action complaint against DraftKings Inc.

and Doe defendants in the United States District Court, Northern District of California.

Among other things, Plaintiffs allege that DraftKings has been operating illegal online gambling platforms in California through its “Daily Fantasy Sports” and “Pick6” contests in violation of California law.

Plaintiffs claim that these contests amount to unlawful lotteries, games of chance, or sports betting and that DraftKings falsely represents these services as lawful in California, including through misleading public statements and platform disclosures.

Plaintiffs bring claims under California’s Unfair Competition Law and Consumer Legal Remedies Act, and seek, among other things, injunctive relief, restitution, disgorgement, and attorneys’ fees and costs.

Plaintiffs seek to represent a purported class of all California residents who allegedly placed a bet or wager on DraftKings’ alleged Daily Fantasy Sports and Pick6 gambling websites while physically located in California.

On July 11, 2025, Plaintiffs filed a Notice Regarding Legal Opinion Issued By The California Attorney General enclosing an opinion from the California Attorney General (Opinion No.

23-1001) in which the California Attorney General opined that “California law prohibits the operation of daily fantasy sports games with players physically located within California.” On July 14, 2025, two other actions pending in the Northern District of California were referred sua sponte by the Court to the Judge assigned to Moore for determination on whether such actions should be related under Civil Local Rule 3-12(e) (Beltran v.

FanDuel, Inc., Case No.

25-cv-5586-JSC;

Underdog Sports, LLC, Case No.

25-cv-5542-JST).

On July 16, the Court referred sua sponte a third pending action for the same determination (Franks v.

Prize Picks, Case No.

25-cv-4916-JD).

On July 24, 2025, the Court assigned to Moore held that those three actions were related to Moore and assigned all three cases to that Court.

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 May 9, 2025, Micro-Gaming Ventures, LLC (“Micro-Gaming”) filed suit against DraftKings Inc.

District Court for the District of New Jersey.

In the complaint, Micro-Gaming alleges that the Company infringes five patents:

8,545,311 (“the ’311 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

8,632,392 (“the ’392 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

8,734,231 (“the ’231 patent”), entitled “Systems and methods for enabling remote device users to wager on micro events of games in a data network accessible gaming environment”;

11,783,679 (“the ’679 patent”), entitled “Location-based wagering via remote devices”;

12,266,244 (“the ’244 patent”), entitled “Location-based wagering via remote devices” (collectively, the “Micro-Gaming Patents”).

The allegations for all of the Micro-Gaming Patents are directed to the “DraftKings Sportsbook.”

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.

Other Litigation

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The Company is currently under Internal Revenue Service audit for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests and informational reporting and withholding.

The final resolution of that audit, and other audits or litigation, may differ from the amounts recorded in these consolidated financial statements and may materially affect the Company’s consolidated financial statements in the period or periods in which that determination is made.

Certain examinations are progressing in the administrative process.

The Company intends to vigorously defend its positions.

The Company is unable to predict the outcome of these proceedings at this time and cannot reasonably estimate the potential loss or range of loss, if any.

The final resolution of these audits, and any related proceedings, may differ from the amounts recorded in these consolidated financial statements and may materially affect the Company’s consolidated financial statements in the period or periods in which that determination is made.

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