Betting firm DraftKings Inc (DKNG.O) tightened its forecast for annual revenue, saying it recorded a $25 million hit due to payouts following customer-friendly results in the National Football League (NFL).
Shares in DraftKings fell about 9% in premarket trading as the firm’s investments in the launch of its products in Arizona and Wyoming also widened losses for the third quarter.
Analysts have said DraftKings and its peers would spend heavily on marketing during the NFL season, with a view to attracting new users in several U.S. states that have legalized online sports betting.
However, unfavorable results in some NFL matches in October forced DraftKings to cut the upper end of its fiscal 2021 outlook, even as it raised the midpoint of the range.
Boston-based DraftKings forecast fiscal 2021 revenue between $1.24 billion and $1.28 billion, versus a prior range of $1.21 billion to $1.29 billion. Analysts on average had expected revenue of $1.29 billion, according to Refinitiv IBES.
It also forecast 2022 revenue in a range of $1.7 billion to $1.9 billion, largely in line with market estimates.
The online betting space has also seen frenetic dealmaking, with firms looking to expand into Britain and double down in the United States, dubbed the “promised land for online gambling.”
DraftKings last month walked away from a $22 billion attempt to buy gambling group Entain Plc (ENT.L), without explaining exactly why the deal talks foundered.
For DraftKings, net loss attributable to common stockholders widened to $545 million, or $1.35 per share, in the third quarter ended Sept. 30, from $395.7 million, or $1.11 per share, a year earlier.
Revenue rose 60% to $213 million, missing estimates of $236.6 million.