BOSTON — DraftKings Inc. (NASDAQ:DKNG) has introduced a $150 bonus bet offer for new customers ahead of the NFL preseason, drawing fresh scrutiny to the escalating costs of user acquisition in the competitive online sports betting market. The promotion, which runs through August 23, grants six $25 bonus bets to customers who place a qualifying $5 wager, with the bonuses distributed in three separate drops and expiring seven days after each release.
The financial mechanics are worth noting: while the headline bonus is 30 times the qualifying wager, the actual cash outlay for DraftKings is lower because bonus bet stakes are non-withdrawable and only net winnings can be cashed out. Nevertheless, the aggressive incentive underscores the intensity of operator competition as the regular NFL season approaches.
This marketing push comes at a critical juncture for DraftKings, whose shares have been under pressure. The stock closed at $25.03 on Thursday, down 4.2% from the prior Friday, and trading volume was 36% below its 50-day average. The company's second-quarter results, reported earlier this month, revealed a mixed picture: while sports handle climbed 14.5% year-over-year to $13.14 billion and monthly unique payers grew 9% to 3.6 million, overall revenue fell 4.6% to $1.443 billion, and average revenue per payer dropped 13% to $132.
The revenue decline was attributed to unfavorable sports outcomes for the company and increased promotional reinvestment. Sales and marketing expenses surged 38.3% year-over-year to $322.5 million, a $89.3 million increase that contributed to a 61.9% plunge in adjusted EBITDA to $114.6 million. The company reaffirmed its 2026 guidance for revenue between $6.5 billion and $6.9 billion and adjusted EBITDA of $700 million to $900 million.
Analysts remain cautiously optimistic, with a median price target of $33, implying a 31.8% upside from Thursday's close. However, the consensus target of $34.79 suggests a 39% potential gain, while individual forecasts range from $18 to $76. Recent analyst actions have been mixed: Macquarie maintained an Outperform rating with a $38 target, while Barclays and JPMorgan lowered their targets to $34 and $33, respectively.
The key question for investors is not whether promotions attract users, but whether those users generate sufficient returns to cover acquisition costs in a timely manner. DraftKings' Q2 results highlight both sides of this equation: strong user growth but declining revenue per payer and margins. The company's CEO Jason Robins emphasized growth in handle, users, and engagement, while CFO Alan Ellingson reiterated the full-year adjusted EBITDA target of approximately $1 billion.
In the competitive landscape, DraftKings' offer compares with Underdog's $50 bonus for a $5 entry, Polymarket's $20 bonus for a $10 deposit, and Kalshi's $25 bonus for a $25 trade. Fanatics offers up to $1,000 in FanCash over 10 days, but these rewards are not directly comparable due to differences in terms, loss conditions, and expiry rules.
Looking ahead, the critical metric will be whether DraftKings can convert its NFL acquisition push into payer growth without further eroding revenue per payer or sports margins. If rivals respond with even more generous promotions, the cost of customer acquisition could rise further, undermining the case for a swift payback on marketing spend. Conversely, favorable sports outcomes could boost margins more quickly than expected.
DraftKings shares have fallen nearly 49% from their 52-week high of $48.78, reflecting significant de-rating. The upcoming NFL season will be a key test of whether the company's growth strategy can deliver profitable returns.
