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DraftKings was out with record-breaking revenue numbers for its first quarter of 2025. An eye-popping $1.4 billion, up 20% from last year’s $1.17 billion. EBITDA was also higher at $102.6 million vs. last year’s $22.3 million. 

DraftKings uses a metric dubbed Monthly Unique Players instead of the more standard industry parlance of Active Monthly Users to more easily designate the number of their users who are actually placing monetary bets. 

This number reached 4.3 million in Q1, up substantially from last year’s Q1 number of 3.4 million, but down from its record Q4 quarter in 2024 during NFL and College Football when they reached 4.8 million. 

The company also publishes a handy metric called Average Revenue Per Monthly Unique Payer, which basically looks at how much the average real-money bettor contributes to revenue. In this case, that number reached $108 per player, up from just $97 last quarter but down from $114 in Q1 2024.

Sportsbook handle, or total dollar amount wagered, also saw impressive growth, up to $13.8 billion, up 16%, or more than $1.8 billion more than the same quarter last year. Sportsbook revenue accounted for $882 million, while the five states in which the company currently operates iGaming chipped in an additional $423 million, which was up $370 million YOY. 

The company added an additional $103 million in revenue from other sources, such as its fantasy sports business and its recently acquired business, Jackpocket, the leading digital lottery app in the US. Last year, it also purchased Simple Bet and Sports IQ.

NCAA Tournament Chalk Costs Draftkings Plenty

In sports betting parlance, chalk is the favorite in a matchup; usually, in this reference, it means the heavy favorite. And according to Allen Ellingson, the company’s CFO, chalk cost DraftKings roughly $170 million in revenue and $110 million in EBIDA during the men’s college basketball tournament in March, where the favorites won at a rate not seen in modern times. In fact, more than 82% of games were won by the Chalk.

The company revised earnings downward in the face of this for the full year 2025 to $6.3 billion, from a previous guidance of $6.6 billion. EBITDA projections now stand at $800 million, down from an earlier forecast of $900 million to $1 billion, so it was again a sizable impact. 

The company CEO, Jason Robbins, spent a good bit of his earnings call making the case that this was an aberration and that the sportsbook hold would bounce back after what are now two consecutive quarters of dismal results, first in NFL outcomes in Q4 and then NCAA basketball in Q1. 

He even briefly launched into a fan theory on NIL in college basketball, possibly being behind the dominance of large, favored basketball programs. Top recruits sign with dominant programs in larger markets to maximize their earnings from the NCAA’s new Name, Image, Likeness program, allowing even college athletes to be compensated for endorsements or sponsorships. Thus, these all-star programs have increased their wins over less well-known competitors.

The company also highlighted its continued belief that its customers would migrate towards much higher holding parlay and live action betting over time. They touted an almost 36% uptick in Major League Baseball Live Game bets already this season, to showcase what they believe will be the future of sports betting, and one that the company has been pursuing relentlessly with its M&A purchases over the past several years. 

They also reaffirmed their intention to buy back about $1 billion in stock over the coming year, and they had already purchased about $140 million in the first quarter. 

Looking Forward

Despite some bruising losses, DraftKings believes that structural hold will stabilize over the next quarter or two and that adding live betting and parlays will grow that hold number over time. 

Clearly, they continue to capitalize on increasing handle. That number should also sharply rise as AI-assisted gambling technology and its highly skilled oddsmakers, allow an almost infinite number of live in-game bets and parlays to be offered on the app in the not-so-distant future. 

Compare that with the total of only 272 games in an entire NFL season, and the number of bets and the amount wagered could skyrocket, as most players currently only bet the line and possibly the over/under. This means that many punters only currently make perhaps two bets on their favorite team per week, versus a dozen or more once live game betting rolls out further, which is why you have seen DraftKings snatching up companies like Simple Bet and Sports IQ as they prepare for the real growth that is yet to come in live game betting.

They also believe that as the market matures, their spending on advertising and free play will come down, but they mention the potential for higher taxes in some states that may offset that decreased spending. 

Regardless of the future, the pressure is on Robbins in the present to show that the last two quarters of player-friendly outcomes were a fluke and that the company can convert those increasing numbers of Monthly Unique Players and ever-increasing handle into an actual, sustainable, and predictable revenue stream.

Gov. Sarah Sanders recently signed an amendment to the Arkansas Student-Athlete Publicity Rights Act into law. When she did so, Arkansas became the first state to exempt name, image, and likeness (NIL) earnings from state income tax liability. Many other states appear to be following in Arkansas’ footsteps.

Because NIL allows student-athletes to use their personal brands to earn income, schools with more robust NIL opportunities have a recruiting edge. By exempting NIL earnings from income taxes, this new law aims to provide Arkansas’ college sports programs with an advantage over rivals.

Unfortunately, this new law means the state of Arkansas has walked right into a prisoner’s dilemma.

The prisoner’s dilemma is a particularly useful game-theory model for understanding strategic behavior. In the classic model, two criminals are suspected of committing a major crime. The police have evidence to convict each criminal of a minor crime, but do not have enough evidence to convict either one of a major crime. The police separate the two criminals where each criminal has a decision to make: Remain quiet or inform on the other.

The outcome for each criminal, though, depends on the actions of the other. Consider two criminals, Tom and Jerry. If both remain quiet, each will serve a one-year jail sentence for the minor crime. If one informs while one remains quiet, the informant will receive immunity while the other receives a five-year jail sentence. If both inform, each receives a four-year jail sentence.

To decide what he will do, Tom considers both his own self-interest and Jerry’s actions. Should Jerry remain quiet, Tom can avoid jail altogether by informing. Should Jerry inform, Tom can reduce his prison sentence from five to four years by also informing. No matter what Jerry does, Tom’s best option is to inform. We arrive at the same conclusion if we consider Jerry’s decision process.

Because each criminal has the incentive to inform on the other, both Tom and Jerry receive four-year prison sentences. But this is not the best outcome they could have achieved. Tom and Jerry would have been better off if they remained quiet and received only one-year prison sentences. That is, the competition between the individuals led to a worse outcome for the group than cooperation would have.

This prisoner’s dilemma model can be applied to the competition between states over NIL tax policy. Consider SEC football foes Arkansas and Georgia. Each state must decide whether to tax or exempt NIL earnings. If neither state exempts NIL earnings from taxation, each football program will attract its natural share of talent based on the caliber of the team, the playing time recruits can expect, coaching quality, and the proximity of the team to players’ families, among other factors. If one state taxes NIL earnings, the other state has an incentive to exempt them. The exempting state can increase its share of talent because recruits keep more of their NIL payments.

If instead, one state exempts NIL earnings, the other state still has an incentive to exempt NIL payments. To do otherwise would be to risk losing talented recruits to the program where players keep more of their NIL earnings. If both states exempt NIL earnings from taxation, both teams will earn their natural share of talent as before, but will do so at a fiscal cost. (In this case, both states give up tax revenue they previously collected.)

Just as in the classic prisoner’s dilemma, both the state of Arkansas and the state of Georgia have the incentive to exempt NIL earnings from state tax liability, regardless of what the other state does. The Arkansas and Georgia football teams will attract their natural share of talent, but the states will both forgo tax revenue.

The competition for the best recruits will lead Arkansas and Georgia to a worse outcome than they would have obtained by agreeing not to exempt NIL earnings from income-tax liability.

Solving the prisoner’s dilemma requires that the states cooperate with each other rather than compete. The dilemma, though, is that each state has a strong incentive to break any agreement to resist exempting NIL earnings from taxation.

The solution, then, is to turn to federal legislation to set a national standard for NIL policy that is enforceable. This is why we have seen the likes of SEC Commissioner Greg Sankey and former Alabama football coach Nick Saban head to Washington.

Jacob Bundrick is a lecturer of economics at the University of Central Arkansas. The views expressed are the author’s and do not necessarily reflect the views of UCA.

May 12 (Reuters)- Aigan Co Ltd PARENT-ONLY FINANCIAL HIGHLIGHTS (in billions of yen unless specified) Year ended Year ended Year to NEXT Mar 31, 2025 Mar 31, 2024 Mar 31, 2026 YEAR LATEST YEAR-AGO COMPANY COMPANY RESULTS RESULTS FORECAST H1 FORECAST Sales 14.74 14.52 (+1.5 pct) (+4.0 pct) Operating loss 128 mln loss 102 mln Recurring loss 41 mln loss 23 mln Net loss 32 mln loss 174 mln EPS loss 1.67 yen loss 8.99 yen Ann Div NIL NIL NIL -Q2 Div NIL NIL NIL -Q4 Div NIL NIL NIL NOTE – Aigan Co Ltd. To see Company Overview page, click reuters://REALTIME/verb=CompanyData/ric=9854.T