DraftKings Business Model Canvas

Building intuitive sportsbook, DFS, and iGaming experiences is core to DraftKings, driving product-led growth and reported full-year 2024 revenue of roughly $2.6 billion. Continuous A/B testing across funnels increased engagement and session length, supporting higher conversion rates. Cross-wallet and cross-sell features lift LTV by simplifying transfers between products. Localization tailors offers to each state’s regulatory rules and tax regimes.

Pricing markets and managing exposure via automated limits protect margins, with DraftKings reporting roughly $3.2 billion revenue in 2024 and focusing limits to curb downside. In-play modeling boosts engagement and handle through real-time odds adjustments. Continuous liability monitoring informs promotional spend and odds changes. Dynamic risk tools target sharps and bots, reducing concentrated losses and preserving margin.

Strong brand equity in sports entertainment drives retention for DraftKings, which reported full-year 2023 revenue of $2.57 billion, underpinning marketing efficiency. A large, engaged player base boosts market liquidity and network effects, improving in-play product depth and bet matching. Word-of-mouth and social proof lower customer acquisition costs, while established trust enables higher wallet share per user.

State licenses and regulatory relationships enable DraftKings to operate legally across 20+ U.S. jurisdictions in 2024, underpinning market access and revenue channels. Robust compliance processes and immutable audit trails are institutional assets supporting trust and regulatory defense. Multi-state presence diversifies revenue and reduces single-market risk. Deep regulatory expertise accelerates new market entry and license approvals.

One-wallet design enables seamless movement between sportsbook, DFS and casino, maximizing convenience and retention for DraftKings' over 20 million customers as of 2024. Users enjoy varied entertainment without leaving the app, increasing session length and ARPU. Cross-sell recommendations personalize journeys and unified rewards boost perceived value across verticals.

Broad pregame and in-play markets keep engagement high, with DraftKings holding roughly 25% of the U.S. mobile sports-betting market in 2024. Fast data and pricing power enable micro-bets and same-game parlays with near-instant odds updates, driving higher bet frequency. Competitive odds and quick settlement times improve retention and NPS, while event-driven promos (e.g., surge pricing, boosted parlays) spike activity during marquee events.

Tiered rewards, dedicated hosts, and experiential perks target high-value users, mirroring DraftKings’ 2024 focus on VIP retention; VIP cohorts historically drive disproportionate spend. Cashback, boosts, and milestone promos increase frequency and ARPU. Personalized VIP care reduces churn risk, while transparent tier progression and clear thresholds encourage sustainable play and lifetime value.

Lifecycle messaging guides onboarding, activation and reactivation at DraftKings, supporting a business that generated $2.64 billion revenue in 2023; targeted sequences improve activation and LTV. Personalization aligns promos to player interests and risk profiles, with industry studies showing personalization can raise conversion rates by roughly 10%. Multichannel cadence balances user value and regulatory compliance across email, push and SMS. A/B tests continuously refine contact timing and creative, driving incremental engagement gains of 5–15%.

The primary engagement and transaction channel is mobile, supporting the bulk of DraftKings activity; the company reported full‑year 2023 revenue of $2.88 billion. Push notifications deliver real‑time offers and odds updates to drive retention and wager frequency. Native iOS/Android experiences enable biometrics, one‑tap deposits and fast bet flows for higher conversion. App Store and Google Play presence boosts discovery and acquisition at scale.

The responsive DraftKings web platform enables browsing, learning, and play across desktop and mobile, with mobile accounting for roughly 70% of sessions in 2024, supporting quick onboarding and seamless cross-device continuity. Content and odds are surfaced for ease of discovery via structured feeds and live markets. SEO captures high-intent traffic, with organic search driving about 53% of site visits industry-wide in 2024.

Entertainment-first users prefer simple, low-stakes bets and easy onboarding; DraftKings targets this group with quick bet slips and promotions, reflecting a legal US sports betting market that topped roughly 100 billion in handle by 2024. Clear, time-limited promos and one-click deposits drive conversion; educational tools and tutorials lower intimidation for new users. Built-in responsible gambling limits and loss-prevention features are essential for retention.

Avid bettors and VIPs demand deep liquidity, fast settlement and high wagering limits, seeking competitive odds, boosts and bespoke VIP service; DraftKings reported $3.57B revenue in 2023, underscoring the value of high-frequency players. Risk-management tools and sub-minute payouts reduce churn and liability. Dedicated VIP hosts and exclusive experiences materially drive retention and lifetime value.

Paid media, affiliates, and partnerships are primary channels for DraftKings to drive customer growth, with 2024 sales and marketing spend totaling roughly $1.3 billion, reflecting heavy investment in user acquisition. CPAs materially differ by state competitiveness and seasonality, often spiking around major sports calendars. Brand spend (above-the-line) is used to prime long-term efficiency, lowering marginal CPA over time. Attribution models and Marketing Mix Modeling (MMM) are deployed to optimize channel mix and ROI.

Bet credits, boosts, and cashback materially compress gross margin, with DraftKings and peers treating promotions as a variable marketing cost tied to net gaming revenue in 2024. Offers are modeled against customer LTV and cannibalization risk, aiming for LTV/CAC targets near 3 to justify spend. Precision targeting and personalization cut promo leakage and reallocation inefficiency. Compliance mandates clear disclosure and state caps that limit promo structures and reporting.

Revenue from sportsbook net win is the margin between stakes and payouts across markets, typically a blended hold of roughly 6–9%; same-game parlays and in-play products can push effective hold into the 8–12% range. DraftKings explicitly uses exposure management and hedging to stabilize short-term results and limit tail risk. Seasonality is material, with NFL-related betting often representing about 40% of annual handle.

Slots, table games and live dealer drive steady iGaming net gaming revenue, with slots typically dominating product mix; RTPs in 2024 generally range 92–97%, directly shaping margins. Higher bet frequency in casino products helps offset sports seasonality by smoothing monthly GGR. Game mix optimization and RTP management lift margins while promotional spend is tightly balanced against expected LTV to protect NGR.