Sports betting seeing ‘zero impact’ from inflation, DraftKings CEO says

·Producer
·2 min read

While rising inflation rates have impacted a wide range of businesses from food and beverage brands to travel, DraftKings (DKNG) CEO Jason Robins told Yahoo Finance that the buzzword excuse for rising prices and cost cutting hasn’t impacted the sports betting industry.

“We're seeing absolutely zero impact to our customer cohorts due to any sort of inflationary pressures or otherwise, any other macroeconomic factors,” Robins said on Yahoo Finance Live (video above).

Christopher Eubanks returns the ball against John Isner during the final day of the DraftKings All-American Team Cup on July 5, 2020 in Atlanta. (Photo by Carmen Mandato/Getty Images)
Christopher Eubanks returns the ball against John Isner during the final day of the DraftKings All-American Team Cup on July 5, 2020 in Atlanta. (Photo by Carmen Mandato/Getty Images)

Gambling revenues didn’t slow down in the first quarter for several public companies that reported earnings recently. DraftKings reported first-quarter earnings on Friday with a revenue of $417.2 million, beating Wall Street's estimates of $414.85 million. The company’s -$1.22 earnings per share came in worse than Wall Street's expectations of $1.16.

“Gaming has generally been very well-performing during economic downturns, recessions, inflationary periods, and the like,” Robins added. “So this is not a new thing. This is something that's been well-known about the industry for quite some time. And we're certainly seeing the same thing materialize in our numbers.”

The company recently reported a record number of unique paying numbers, 2 million, in the first quarter of 2022 amid mobile sports gaming now being legal in 30 states and D.C.

DraftKings stock, meanwhile, closed at a new 52-week low on Monday as shares dropped below $12 per share. The stock has lost roughly 75% of its value over the last year.

The move downward came as investors have grown wary of growth companies amid a rising interest rate environment, therefore leading to a sell-off of companies that don’t produce a profit like DraftKings which expects an adjusted EBITDA of $760 million to $840 million.

"Once the market's kind of digested all that and people start looking at what stocks do and what companies will perform well during inflationary periods," he continued, "I believe that we will be on that list because facts support and our data supports that we're going to do very well during an economic period of inflation or a recession.”

Josh is a producer for Yahoo Finance.

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