Shares of DraftKings Inc. (NASDAQ: DKNG) closed Tuesday's regular session at $23.44, down 3.5% (85 cents) from Monday's close of $24.29. The decline came as the sportsbook operator rolled out a new customer promotion worth $200 in bonus bets, reigniting investor concerns about the company's spending on customer acquisition. Trading volume reached 8.23 million shares, with the stock recovering slightly to $23.55 in after-hours trading.
The promotion, available from September 1, 2026, offers new customers $200 in non-cashable bonus bets after they place an initial wager of at least $5. The bonus is distributed in four installments of $50 every seven days over a 21-day period, with each installment valid for seven days. The offer is designed to attract football-season registrations, but the face value is notably high relative to DraftKings' revenue per user.
According to the company's second-quarter results, average revenue per monthly unique payer (ARPMUP) stood at $132. The $200 bonus represents 1.52 times that figure, a ratio that raises the bar for the promotion to pay back. Analysts note that the actual accounting cost is lower because bonus bets are non-withdrawable and exclude the stake from winnings, but the promotional intensity still pressures margins.
DraftKings' second-quarter financials highlighted the strain of aggressive marketing. Revenue declined 5% to $1.443 billion, even as sports consumer volume increased 15%. Monthly unique payers grew 9% to 3.6 million, but average revenue per payer fell 13% to $132, impacted by promotions and bettor-friendly outcomes. Sales and marketing expenses surged 38.3% to $322.5 million, while cost of revenue rose to 61.8% of sales, up 5.3 percentage points year over year.
Chief Financial Officer Alan Ellingson reiterated that core operations are still expected to deliver approximately $1 billion of Adjusted EBITDA this year, but spending on Predictions has lowered overall guidance. The company maintained its 2026 revenue forecast of $6.5 billion to $6.9 billion and adjusted EBITDA guidance of $700 million to $900 million.
DraftKings operates in 27 states, Washington, D.C., and Puerto Rico, reaching about 53% of the U.S. population. The new promotion ends at 23:59 EDT on September 20, and the upcoming football season will be a key test of customer retention and return on investment.
Investors should distinguish between the headline bonus amount and the actual cost to acquire a customer. Final returns depend on retention rates, wagering frequency, and sportsbook hold. Risks include unexpected bettor-friendly outcomes that reduce hold, higher state tax rates, intense promotional activity from rivals like FanDuel, and weaker retention.
The stock's decline reflects broader concerns about the sustainability of DraftKings' growth strategy. While the company continues to expand its market presence, the rising cost of acquiring and retaining customers is a critical metric to watch. The next few months will reveal whether the $200 promotion can generate enough long-term value to justify its upfront cost.
