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DraftKings (DKNG) Set to Launch Online Sportsbook in Maryland

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DraftKings (DKNG - Free Report) recently announced that it will be launching an online sportsbook in Maryland that will be available from Nov 23.

This will offer customers a best-in-class sports betting experience, including the opportunity to place a variety of bets, such as same-game parlays, player props, special odds boost selections, and more across collegiate sporting events and professional sports leagues, including the NFL, NHL, NBA and more.

The launch comes during the two big ongoing sports events of the Baltimore Ravens and the World Cup, allowing Marylanders to wager on them.

Expansion and Enhancement Efforts Aid Growth at DraftKings

DraftKings also launched a sportsbook in Kansas in early August, which had a great start and expanded its user base. The company achieved 1.6 million monthly unique payers in third-quarter fiscal 2022, which increased 22% year over year.

The company further plans to expand its footprint as it is set to launch its online sportsbook in Ohio, MA and Puerto Rico in 2023, which would bring penetration of the U.S. population to 45%.

It introduced revenue guidance of $2.8-$3 billion for fiscal 2023 and anticipates that the fourth quarter of fiscal 2023 will be the company’s first quarter with positive adjusted EBITDA.

While launching sportsbooks in new geographies, DraftKings has also been focusing on enhancing its features to provide a smooth experience to users.

The new features rolled out around the start of the NFL season, such as quick parlay, quick same-game parlays and the ability to combine most of the same-game parlays, have gained traction. The parlay handle mix increased 5% year over year in third-quarter fiscal 2022 while the parlay bet mix increased 15%.

For iGaming, DraftKings recently introduced player-contributed jackpots in response to customer demand. Players can opt-in for an additional modest wager for a chance to win potentially hundreds of thousands of dollars. This is believed to increase customer engagement and create differentiation from the competition.

DraftKings also collaborated with Amazon (AMZN - Free Report) as a sponsor and exclusive pregame odds provider for Thursday Night Football and Prime Video. This deal features DraftKings integrations in its live pregame show, including odds and additional sports betting insights.

Major Headwinds for DraftKings

Though DraftKings has been focused on expanding its footprint, it recently lost the battle in California where the poll rejected the legalization of sports betting. This comes as a big blow for the company as California was considered to be a large market to draw revenues.

Another strong headwind comes from a new competitor in the industry, i.e., Fox Corporation (FOXA - Free Report) . Zacks Rank #3 (Hold) DraftKings recently received a green flag toward buying a stake in FanDuel, one of the biggest brands in U.S. online gambling. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The deal is likely to aid the performance of Fox Bet, the online sports betting brand of Fox, which has been struggling as it failed to gain traction in the U.S. betting market due to its poor reach and tech to date.

DraftKings also faces competition from Fubo TV (FUBO - Free Report) . In September, Fubo launched its online sportsbook in New Jersey to become the first mobile sportsbook to integrate with a live TV streaming platform, creating a watching and wagering ecosystem in one place for its users.

Shares of the company have declined 59.1% compared with the Zacks Consumer Discretionary Sector, which fell 38.6%.

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