What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-07 · 215 added, 148 removed, 1061 unchanged (25% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

June 30, 2025

September 30, 2025

(Unaudited) December 31, 2024

31 unchanged sentences

Class A common stock, $ 0.0001 par value;

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

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

523,310 and 504,722 shares issued and 496,503 and 489,071 outstanding as of September 30, 2025 and December 31, 2024, respectively

Class B common stock, $ 0.0001 par value;

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

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

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

Treasury stock, at cost;

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

26,807 and 15,651 shares as of September 30, 2025 and December 31, 2024, respectively

( 1,010,579 ) ( 563,146 )

8 unchanged sentences

(Amounts in thousands, except per share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

6 unchanged sentences

Other income (expense):

Interest income 12,305 14,212 21,794 29,279

Interest expense ( 11,640 ) ( 678 ) ( 16,734 ) ( 1,327 )

Interest income (expense), net ( 19,573 ) 8,328 ( 14,513 ) 36,280

Gain (loss) on remeasurement of warrant liabilities 4,233 21 877 ( 8,282 )

5 unchanged sentences

Earnings (loss) per share attributable to common stockholders:

Basic $ 0.32 $ 0.13 $ 0.25 $ ( 0.17 )

Diluted $ 0.30 $ 0.10 $ 0.23 $ ( 0.17 )

Basic and diluted $ ( 0.52 ) $ ( 0.60 ) $ ( 0.27 ) $ ( 0.78 )

See accompanying notes to unaudited condensed consolidated financial statements.

27 unchanged sentences

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

Exercise of stock options 786 — — — 2,927 — — — 2,927

Stock-based compensation — — — — 76,754 — — — 76,754

Exercise of warrants 72 — — — 2,605 — — — 2,605

Purchase of treasury stock for RSU withholding ( 681 ) — — — — — — ( 31,628 ) ( 31,628 )

Restricted stock unit vesting 1,915 — — — — — — — —

Purchase of treasury stock under Stock Repurchase Program ( 1,640 ) — — — — — — ( 71,212 ) ( 71,212 )

Net income (loss) — — — — — ( 256,788 ) — — ( 256,788 )

Balances at September 30, 2025 496,503 $ 48 393,014 $ 39 $ 8,280,234 $ ( 6,573,944 ) $ 36,488 $ ( 1,010,579 ) $ 732,286

See accompanying notes to unaudited condensed consolidated financial statements.

12 unchanged sentences

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

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

Purchase of treasury stock for RSU withholding ( 782 ) — — — — — — ( 33,499 ) ( 33,499 )

Restricted stock unit vesting 2,520 — — — — — — — —

9 unchanged sentences

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 for RSU withholding ( 598 ) — — — — — — ( 20,258 ) ( 20,258 )

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

Purchase of treasury stock under Stock Repurchase Program — — — — — — — — —

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

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 201,486 204,755

Non-cash interest income ( 1,285 ) ( 2,798 )

Non-cash interest expense 2,224 1,327

Non-cash interest (income) expense, net 1,658 27

Stock-based compensation 236,020 271,307

1 unchanged sentence

(Gain) loss from equity method investment ( 1,421 ) 19

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

Deferred income taxes ( 3,521 ) ( 80,604 )

5 unchanged sentences

Deposits and other non-current assets 3,489 446

Operating leases, net — 168

Accounts payable and accrued expenses 54,988 44,780

32 unchanged sentences

Shares issued for contingent consideration $ 4,962 $ —

Stock-based compensation capitalized to internally developed software costs $ 17,466 $ 13,461

Supplemental Disclosure of Cash Activities:

9 unchanged sentences

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.

Supreme 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, 2025, 39 U.S.

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

1 unchanged sentence

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

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

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

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

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.

As of September 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 September 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.

12 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

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

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

Improvements to Income Tax Disclosures .

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

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

ASU 2025-06 changes the accounting for internal-use software under Accounting Standards Codification (“ASC”) 350-40.

ASU 2025-06 clarifies when to begin capitalizing costs.

ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of this standard on our consolidated financial statements.

Business Combinations

4 unchanged sentences

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

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

digital lottery courier business with expected ancillary benefits to our 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, including for the three and nine months ended September 30, 2025.

Purchase Price Accounting for the Jackpocket Transaction

45 unchanged sentences

Transaction Costs

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.

For the three and nine months ended September 30, 2024, the Company incurred nil 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 nine months ended September 30, 2025.

Acquisition of Simplebet, Inc.

3 unchanged sentences

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 unaudited condensed consolidated balance sheets.

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 and six months ended June 30, 2025.

Preliminary Purchase Price Accounting for the Simplebet Transaction

39 unchanged sentences

Transaction Costs

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.

For the three and nine months ended September 30, 2024, the Company incurred $ 2.7 million of advisory, legal, accounting and management fees in connection with the Simplebet Transaction.

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

Other 2024 Acquisitions

8 unchanged sentences

Intangible Assets

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

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

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

5 unchanged sentences

Trademarks, tradenames and other 5.3 years 43,120 ( 17,809 ) 25,311

$ 1,604,405 $ ( 725,362 ) $ 879,043

Indefinite-lived intangible assets:

Digital assets, net of impairment Indefinite-lived 953 N/A 953

Total $ 1,646,963 $ ( 785,922 ) $ 861,041

11 unchanged sentences

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

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.

Amortization expense was $ 60.6 million and $ 187.1 million for the three and nine months ended September 30, 2025, respectively, and $ 84.6 million and $ 188.2 million for the three and nine months ended September 30, 2024, respectively.

Current and Long-term Liabilities

4 unchanged sentences

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 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.

As of September 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 September 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”).

1 unchanged sentence

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.

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 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.

In connection with the borrowing 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 $ 1.2 million for the three and nine months ended September 30, 2025, respectively, which is included in Interest income (expense), net on the Company’s condensed consolidated statements of operations.

The Term B Loan under the Term B Facility bears interest at the Company’s election at either (x) 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 September 30, 2025, the aggregate principal amount of Term B Loan outstanding was $ 597.0 million.

As of September 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.

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.

As of September 30, 2025, the Company was not required to test the covenant as the aggregate amount of the revolving loans outstanding and the letters of credit outstanding did not exceed 40 % of the total commitments under the Revolving Credit Facility.

Convertible Notes and Capped Call Transactions

3 unchanged sentences

In connection with the issuance of the Convertible Notes, Old DraftKings incurred $ 17.0 million of lender fees and $ 1.7 million of debt financing costs, which are being amortized through the Notes Maturity Date.

The amortization of debt issuance costs was $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2025, respectively, and $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively, which is included in Interest income (expense), net on the Company ’ s condensed consolidated statements of operations.

The Convertible Notes represent senior unsecured obligations of Old DraftKings, which are being amortized through the Notes Maturity Date.

4 unchanged sentences

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 June 30, 2025, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

As of September 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”).

3 unchanged sentences

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 sheets.

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:

As of September 30, 2025, the Company’s convertible debt balance was $ 1,258.4 million, net of unamortized debt issuance costs of $ 6.6 million.

Although recorded at amortized cost on the Company’s condensed consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,137.5 million and $ 1,076.9 million as of September 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 September 30, 2025, the future principal payments for the Term B Loan and Convertible Notes were as follows:

Years Ending December 31,

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

October 1, 2025 to December 31, 2025 $ 1,493

2028 1,270,815

10 unchanged sentences

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 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.

As of September 30, 2025 and December 31, 2024, the Company’s estimated contingent liability for indirect taxes was $ 91.3 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.

3 unchanged sentences

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.

As of September 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.

10 unchanged sentences

’ 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 June 30, 2025, there were 3.0 million GNOG Private Warrants outstanding, convertible into approximately 1.1 million shares of DraftKings Inc.

As of September 30, 2025, there were 2.7 million GNOG Private Warrants outstanding, convertible into approximately 1.0 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 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.

The remaining GNOG Private Warrants were exercised in October 2025.

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

As of September 30, 2025, the fair value of the Company’s warrant liability was $ 7.4 million.

Due to fair value changes throughout the three months ended September 30, 2025 and 2024, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 4.2 million and a nominal gain on the remeasurement of its warrant liabilities, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 0.9 million and a loss on the remeasurement of its warrant liabilities of $ 8.3 million, respectively.

During the three months ended September 30, 2025, no Private Warrants were exercised, as all such warrants had expired on April 23, 2025, and 0.2 million GNOG Private Warrants were exercised.

These exercises resulted in a reclassification to additional paid-in-capital in the amount of $ 2.6 million.

During the nine months ended September 30, 2025, 0.3 million Private Warrants and 0.2 million GNOG Private Warrants were exercised.

These exercises resulted in a reclassification to additional paid-in-capital in the amount of $ 13.8 million.

Fair Value Measurements

6 unchanged sentences

• 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 June 30, 2025 and December 31, 2024 based on the three-tier fair value hierarchy:

June 30, 2025

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

September 30, 2025

Level 1 Level 2 Level 3 Total

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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 six months ended June 30, 2025.

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

1 unchanged sentence

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 gain (loss), net on the condensed consolidated statements of operations in the condensed consolidated statements 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 acquisition of SIQ, the acquisition of Dijon and Simplebet Transaction upon the achievement of certain performance targets.

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

(4) The Company measures the 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 the 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 acquisition of SIQ, the acquisition of Dijon and the 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.

3 unchanged sentences

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 condensed consolidated statements of operations.

June 30, 2025 December 31, 2024

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

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

September 30, 2025 December 31, 2024

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

Revenue volatility 10.6 % - 14.5 % ( 12.2 %)

5 unchanged sentences

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

Balance at December 31, 2024 $ 77,965

Settlement of contingent consideration liabilities ( 3,300 )

Fair value adjustment to contingent consideration liabilities ( 37,896 )

Balance at June 30, 2025 $ 54,569

Balance at September 30, 2025 $ 36,769

Revenue Recognition

2 unchanged sentences

The deferred revenue balances were as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

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 and six months ended June 30, 2025 and 2024 is as follows:

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

3 unchanged sentences

Total Revenue $ 1,144,019 $ 1,095,490 $ 4,065,332 $ 3,374,927

Sportsbook revenue includes online sportsbook and retail sportsbook.

Sportsbook revenue includes online sportsbook and retail sportsbook revenue.

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 $ 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.

Beginning in the three month period ended September 30, 2025, other revenue also includes interest income on customer deposits.

Although such income does not directly arise from contracts with customers, it is presented within revenue as these funds are critical components of providing our product offerings to customers, and therefore the cash inflows from interest are directly associated with the Company’s ongoing revenue-generating activities.

Interest income included in other revenue for the three and nine month periods ended September 30, 2025 was $ 20.2 million, of which $ 12.7 million relates to the six month period ended June 30, 2025.

Prior period amounts were not material.

The opening and closing balances of the Company ’ s accounts receivable from contracts with customers were $ 57.8 million and $ 65.6 million for the nine months ended September 30, 2025, respectively, and $ 47.5 million and $ 64.4 million for the nine months ended September 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 six months ended June 30, 2025:

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

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

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Forfeited ( 10 ) ( 1,160 ) ( 440 ) ( 75 ) ( 1,685 ) 17.66 26.31

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

Outstanding at September 30, 2025 18,175 15,464 11,167 413 45,219 $ 9.52 $ 29.38

As of September 30, 2025, total unrecognized stock-based compensation expense of $ 624.3 million related to granted, and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.6 years.

The following tables show stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Options RSUs Total Options RSUs Total

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Total $ 1,908 $ 70,565 $ 72,473 $ 1,632 $ 85,920 $ 87,552

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

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Options RSUs Total Options RSUs Total

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(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 and six months ended June 30, 2025 and 2024 is as follows:

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Income tax provision (benefit) $ ( 12,065 ) $ ( 1,287 ) $ ( 5,875 ) $ ( 75,208 )

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.

The effective tax rates for the three months ended September 30, 2025 and 2024 were 4.5 % and 0.4 %, respectively, and the effective tax rates for the nine months ended September 30, 2025 and 2024 were 4.2 % and 16.8 %, respectively.

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

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted.

Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (“IRC”) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes.

The company recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements.

Due to the valuation allowance, the OBBBA does not have a material impact on the financial statements.

Segment Information

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Depreciation and amortization 66,071 89,952 201,486 204,755

Interest income ( 12,305 ) ( 14,212 ) ( 21,794 ) ( 29,279 )

Interest expense 11,640 678 16,734 1,327

Interest (income) expense, net 19,573 ( 8,328 ) 14,513 ( 36,280 )

Stock-based compensation 72,473 87,552 236,020 271,307

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(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;

(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;

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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 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,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net income (loss) attributable to common stockholders $ ( 256,788 ) $ ( 293,688 ) $ ( 132,716 ) $ ( 372,434 )

Basic and diluted weighted-average common shares outstanding 496,639 486,219 495,522 479,981

Earnings (loss) per share attributable to common stockholders:

Basic and diluted $ ( 0.52 ) $ ( 0.60 ) $ ( 0.27 ) $ ( 0.78 )

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

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

September 30,

Class A common stock resulting from exercise of all warrants 1,001 1,441

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Total 59,557 69,201

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.

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

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.

The Company has committed to invest up to $ 17.5 million in DBDK Venture Fund I, LP, in which the Company holds a 28.6 % ownership interest, and $ 21.0 million in DBDK Fund II, LP, in which the Company holds a 35.0 % ownership interest.

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

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.

As of September 30, 2025, the Company had invested a total of $ 12.7 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

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.

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, 2025, the Company incurred $ 0.1 million and $ 0.4 million of expense under the Aircraft Leases, respectively, as well as $ 1.8 million and $ 2.9 million for upgrades related to the aircraft in each period, respectively.

Commitments and Contingencies

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Years Ending December 31,

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

From October 1, 2025 to December 31, 2025 $ 161,212

Thereafter 176,345

Total $ 2,066,213

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.

The above commitments include $ 1.3 billion of expected contractual obligations over the next five years as part of multi-year content integration agreements signed with three media distribution counterparties in the three month period ended September 30, 2025.

As of September 30, 2025 , the Company has been issued $ 500.0 million in surety bonds at a combined annual premium cost of 0.5 %, 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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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”).

On November 6, 2025, our Board of Directors approved a $ 1.0 billion increase to our existing stock repurchase authorization, which brings the aggregate share repurchase authorization to $ 2.0 billion of our Class A common stock.

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.

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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 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.

The Company repurchased 1.6 million shares for $ 71.2 million and 8.2 million shares for $ 314.0 million during the three and nine months ended September 30, 2025, respectively, under the Stock Repurchase Program.

Contingencies

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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.

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

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

On August 11, 2025, WinView filed an amended complaint alleging infringement of different claims of the ’543 and ’988 Patents, and alleging infringement by DK Sportsbook, DFS, DK Casino, Pick6, and DK Horse.

On September 26, 2025, DraftKings filed a motion to dismiss WinView’s direct infringement claims for the ’543 Patent and WinView’s claim for willful, induced, and contributory infringement for the two remaining patents-in-suit.

We intend to vigorously defend this case.

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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 October 17, 2025, Colossus filed its opening brief in the appeal.

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

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

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.

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Steiner’s action to the Circuit Court for Pinellas County, Florida.

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.

On August 8, 2025, Steiner filed his amended complaint.

On September 9, 2025, DraftKings and FanDuel jointly moved to dismiss Steiner’s amended complaint, which motion remains pending.

The Company intends to vigorously defend this suit.

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

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.

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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 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 amended complaint purports to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law.

The amended complaint also alleges that certain individuals are liable for trading in Company stock based on non-public information about its NFT business.

The amended complaint seeks unspecified compensatory damages on the Company's behalf, changes to corporate governance and internal procedures, costs and attorney’s fees, and other unspecified relief.

On February 21, 2025, the defendants moved to dismiss the amended complaint.

On September 12, 2025, the court entered an order granting in part and denying in part the defendants’ motion to dismiss on the merits pursuant to Rule 12(b)(5).

The court dismissed without prejudice the plaintiffs’ first, second, and fifth causes of action—asserting breach of fiduciary duty, corporate waste, and insider trading—under Rule 12(b)(5).

The court denied without prejudice the defendants’ motion under Rule 12(b)(5) as to the plaintiffs’ third and fourth causes of action—alleging the sale of unregistered securities and transacting business as an unlicensed broker-dealer.

The court deferred consideration of the defendants’ separate motion to dismiss for failure to plead demand futility under Rule 23.1, and granted the plaintiffs leave to file an amended complaint within thirty days of entry of the order.

Plaintiffs declined to replead the previously dismissed claims, and defendants intend to renew their motions to dismiss the remaining claims at an appropriate time.

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

On October 10, 2025, DraftKings served its motion for summary judgment, which remains pending.

The Company intends to vigorously defend this case.

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

Deceptive Consumer Sales Act – Uncured Deceptive Act;

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

and (3) breach of contract.

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The class certification motion remains pending.

On October 21, 2025, Plaintiff filed a motion for summary judgment, which remains pending.

The Company intends to vigorously defend this case.

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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.

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

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

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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.

In the amended complaint, the plaintiffs added new CFA 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 casino 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.

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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.

On August 13, 2025, plaintiffs filed a second amended complaint:

dismissing Lombardozzi as a plaintiff and added a new plaintiff (Charles Thompson);

dismissing their CFA claims alleging that the casino deposit match promotions allegedly inculcated gaming or were otherwise unconscionable;

and added two new intentional misrepresentation claims related to the “risk free” and “no sweat promotions,” and new customer sportsbook deposit match promotion.

Plaintiffs seek to certify nationwide classes of persons who opted into each of the promotions at issue, as well as a New Jersey subclass.

On September 10, 2025, DraftKings filed a motion to dismiss the second amended complaint, which remains pending.

The Company intends to vigorously defend this case.

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(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).

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.

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

The motion remains pending.

On August 8, 2025, the court ordered the parties to provide a supplemental brief setting forth the basis for the court’s subject matter jurisdiction under the Class Action Fairness Act in light of the mandatory “local controversy exception” contained in 28 U.S.C.

§1332(d)(4)(A), and struck DraftKings’ motion to dismiss without prejudice and with leave to reinstate should the court find that it has jurisdiction.

On September 8, 2025, DraftKings submitted its response, and on September 17, 2025, plaintiffs submitted their response.

The court has not yet ruled if it has jurisdiction.

The Company intends to vigorously defend this case.

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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.

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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DraftKings filed its reply on August 4, 2025.

The motion remains pending.

The Company intends to vigorously defend this case.

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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.

On August 18, 2025, DraftKings filed its motion to dismiss WinView’s direct infringement claims of the ’883 patent, all claims against DK Casino and DK Horse, as well as WinView’s claims for willful, induced, and contributory infringement for all nine patents-in-suit.

We intend to vigorously defend this case.

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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 U.S.

Supreme Court’s 2018 decision striking down the Professional and Amateur Sports Protection Act (“PASPA”) 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.

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

On September 24, 2025, the District of Columbia notified the court that the D.C.

Council had amended D.C.

Code § 16-1702 to clarify that it does not apply to sports

betting authorized under the SWLAA, and that the amendment would become permanent after review by Congress.

On September 29, 2025, Plaintiff filed a response arguing that the amendment violated PASPA.

The court will hear argument on the motions to dismiss on December 2, 2025.

The Company intends to vigorously defend this case.

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

On August 8, 2025, the City filed a motion for leave to file a surreply.

Both the motion to remand and the motion for leave to file a surreply remain pending.

The Company intends to vigorously defend this case.

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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);

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).

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On July 29, 2025, DraftKings filed a motion to dismiss.

On August 12, 2025, Plaintiffs filed their response, and on August 19, 2025, DraftKings filed its reply.

The motion remains pending.

The Company intends to vigorously defend this case.

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

On September 16, 2025, DraftKings filed its motion to dismiss.

On September 30, 2025, Plaintiffs filed their response, in which they withdrew two of their three fraud claims and their request for injunctive relief.

On October 7, 2025, DraftKings filed its reply.

The motion to dismiss remains pending.

Also on September 16, 2025, DraftKings filed a motion to consolidate Macek I and Macek II for all purposes.

On September 23, 2025, Plaintiffs filed their response, and on September 30, 2025, DraftKings filed its reply.

The motion to consolidate also 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.

Moore (now Zhen v.

DraftKings Inc.)

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.

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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.

On August 1, 2025, Plaintiff Moore voluntarily dismissed his case without prejudice;

and upon motion by the plaintiff, the Court ordered that the case is now entitled Zhen v.

On August 11, 2025, DraftKings filed its motion to dismiss.

The remaining plaintiffs filed an opposition on September 25, 2025, and DraftKings filed its reply on October 16, 2025.

The motion remains pending, and the hearing is set for November 14, 2025.

The Company intends to vigorously defend this case.

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

On August 8, 2025, the Company filed its motion to dismiss.

Micro-Gaming filed its brief in opposition to the motion to dismiss on September 2, 2025, and the Company filed its reply brief on September 15, 2025.

The motion remains pending.

We intend to vigorously defend this case.

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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.

Subsequent Events

Acquisition of Railbird Technologies Inc.

( “ Railbird ” )

On October 21, 2025 (“Railbird Acquisition Date”), the Company completed the acquisition of Railbird and its wholly owned subsidiary Railbird Exchange, LLC, a federally licensed exchange designated by the Commodity Futures Trading Commission.

The acquisition provides a foundation that will allow the Company to enter prediction markets through regulated event contracts.

Under the terms of the merger agreement, the Company paid upfront consideration in the amount of approximately $ 48.6 million, consisting of approximately $ 19.9 million in cash consideration and 0.9 million shares of the Company’s Class A common stock, valued at approximately $28.7 million, with additional consideration of up to $ 200.0 million, in a combination of shares of the Company’s Class A common stock, valued on the basis of a 30-day volume-weighted average price of the Company’s Class A common stock determined at or around the issuance thereof, and cash, payable at a later date based on certain post-closing performance metrics.

The acquisition will be accounted for using the purchase method of accounting, and Railbird’s assets, liabilities and results of operations will be included in the Company’s financial statements from the Railbird Acquisition Date.

The Company is in the process of completing the purchase price allocation.

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