DraftKings Inc. (NASDAQ: DKNG) is intensifying its promotional push ahead of the NFL season, with marketing expenses now consuming a larger share of revenue. The company's latest offer—a 50% deposit match up to $1,000 in bonus bets—has sparked a surge in online searches for bonus codes, underscoring the competitive battle for customer acquisition in the sports betting industry.
Q2 Financial Highlights
In the second quarter of 2026, DraftKings allocated $322.5 million to sales and marketing, a 38.3% increase from $233.2 million in the same period last year. This spending represented 22.3% of total revenue, up from 15.4% a year earlier, according to the company's SEC filing. Total revenue declined 4.6% to $1.443 billion, down from $1.513 billion in Q2 2025.
The increased marketing outlay comes as DraftKings seeks to capitalize on the upcoming NFL season—historically the peak period for sportsbook sign-ups. The company's promotional strategy includes the 'SUN1K' code, which requires a minimum deposit of $500 and completion of wagering requirements within 14 days.
Customer Acquisition vs. Monetization
While active user numbers grew—monthly unique payers rose 9% to 3.6 million—average revenue per payer fell 13% to $132. This decline reflects the impact of promotional offers and favorable sports outcomes on overall monetization. Adjusted EBITDA dropped sharply to $114.6 million from $300.6 million, with margins narrowing to 7.9% from 19.9%.
The company maintains its full-year 2026 guidance, projecting revenue between $6.5 billion and $6.9 billion and adjusted EBITDA in the range of $700 million to $900 million. The midpoint of this guidance implies an adjusted EBITDA margin of approximately 11.9%, which will depend on converting promotional users into long-term, profitable customers.
Market Reaction and Analyst Views
Shares of DraftKings closed Friday at $25.26, up 4.29%, on trading volume of 19.9 million shares—about 64% above the company's average daily volume of 12.1 million. Despite the gain, the stock remains 48% below its 52-week high. Analysts remain cautiously optimistic, with MarketBeat reporting 30 buy ratings, 8 holds, and 2 sells. The consensus price target stands at $34.11, suggesting roughly 35% upside from Friday's close.
Strategic Considerations
The spike in bonus-code searches over the weekend highlights the effectiveness of such promotions in driving interest. However, the rising cost of acquisition raises questions about long-term profitability. DraftKings has cited external factors including the FIFA World Cup, NBA playoffs, and the launch of its Super App and Predictions feature as contributors to increased marketing spending.
The key risk remains whether bonus-driven users will stay after promotional credits expire. Additionally, higher-than-expected bettor wins can compress sportsbook margins, while regulatory changes and rival promotions from competitors like FanDuel could further escalate acquisition costs.
As the NFL season kicks off on September 9, DraftKings will have a critical opportunity to demonstrate that its investment in customer acquisition can translate into sustained engagement and profitability. The company's ability to balance growth with cost discipline will be closely watched by investors.
