In Michigan, DraftKings is king: the operator recently stated that its unique strategy for acquiring customers is paying off, and the operator now boasts an 80% growth compared to the same time last year.

DraftKings, a leading name in the world of online gambling, is experiencing significant growth, thanks to its innovative 'iGaming-first' strategy. On a 2nd quarter 2024 earnings call made recently, DraftKings Chief Executive Officer Jason Robins provided insights into the company's impressive performance, which has been largely driven by this forward-thinking approach. The results are nothing short of remarkable, with the company recording an 80% growth compared to its metrics in 2023.

DraftKings' success in Michigan's online casino market

DraftKings has solidified its position as the third-ranking online casino operator in Michigan, which is an increasingly competitive market. The company's iGaming-first strategy, which also encompasses Golden Nugget Online Casino, has played a crucial role in its success in the Wolverine State. Traditionally, DraftKings relied on cross-selling from its popular sportsbook to acquire new players who are also interested in its online casino. The company has now placed a stronger emphasis on targeting iGaming customers with this approach, a move that has yielded even more impressive results.

During the earnings call, Robins highlighted that the cross-sell strategy remains the company's most effective method for recruiting new casino players. He noted that DraftKings continues to adjust its spending depending on performance, ensuring that resources are allocated where they generate the best returns. This strategic shift towards iGaming-first customer acquisition has proven to be a game-changer, allowing DraftKings to capture a larger share of the online casino market.

Strong performance across the board

The numbers from the second quarter of 2024 tell a compelling story of success. DraftKings recounted a 26% revenue growth, a significant reduction of 40% in marketing expenses, and an increase of 80% in new customers throughout all its platforms. These metrics reflect the effectiveness of the company's new strategy as well as its ability to adapt to the evolving demands of the online gambling market.

Robins explained that the company's approach to reallocating funds based on performance is consistent with its broader business strategy. By focusing on iGaming-first customer acquisition, DraftKings has been able to capitalize on the growing popularity of online casinos, resulting in higher customer lifetime values and a more sustainable growth trajectory.

Golden Nugget: a major player in DraftKings' growth

While DraftKings continues to see growth in its customer base, it no longer tops the online casino operator list nationally, a title now held by FanDuel. In Michigan iGaming, FanDuel attains second place, DraftKings third, and Golden Nugget sixth. Despite the intense competition, Golden Nugget and DraftKings combined to generate $41 million in revenue in June 2024, which further proves the strength of their offerings in the market. However, this figure still lags behind the performances of industry giants like FanDuel and BetMGM.

DraftKings' acquisition of Golden Nugget Online Gaming has been a crucial factor in its recent success. Robins stated during the earnings call that this acquisition was still a clever choice, as it significantly boosted the company's customer acquisition efforts during the first quarter of 2024. Although Golden Nugget is smaller compared to DraftKings, it has demonstrated considerable growth potential.

In May of 2024, Golden Nugget nearly tripled its share of the Michigan market, a clear indication of its rising prominence. The platform offers table games under the DraftKings brand and appealing no deposit bonus deals, which are popular with Michigan players. Since Golden Nugget has migrated onto the platform, there has been a noticeable improvement in customer experience and higher conversion rates, further cementing its role in DraftKings' broader growth strategy.