DraftKings Benefits from Its “iGaming-First” Customer Acquisition Strategy

DraftKings is reaping the rewards of its "iGaming-first" customer acquisition strategy. DraftKings CEO Jason Robins highlighted the results on a recent Q2 2024 earnings call. Robins revealed that the strategy enabled the operator to record 80% growth compared to 2023 metrics. 

DraftKings is the third-ranked Michigan online casino according to generated revenue, and its iGaming-first customer acquisition strategy in the Wolverine State also includes Golden Nugget Online Casino. According to Robins, DraftKings has traditionally relied on a cross-sell from its sportsbook service to acquire new online casino players. He reaffirmed that this route is still the company's most effective method for recruiting new online casino players. 

Productive Customer Acquisition Strategy 

The numbers speak for themselves. DraftKings reported a 26% year-over-year revenue growth in Q2, a 40% reduction in marketing costs, and an 80% increase in new customers across all platforms.

According to some transcripts from the earnings call, Robins explained that they are seeing that they are moving dollars around based on performance, something consistent with what they have been doing. There has been a shift towards that iGaming-first customer acquisition investment, where Robins believes the brand has seen the best returns. 

Apparently, DraftKings sees an opportunity to invest directly in acquiring iGaming customers and takes full advantage of that approach. Typically, the acquisition of online casino gamblers is costlier, but DraftKings offers higher customer lifetime values.

Golden Nugget Is on the Rise

Despite the growth in its customer base, DraftKings is no longer the number one online casino nationally. FanDuel now has that role. On the Michigan iGaming market, FanDuel ranks second, DraftKings is third, and Golden Nugget is the sixth-best operator in the Wolverine State. The combined June revenues of the DraftKings and Golden Nugget casinos was $41 million, which is still far short of BetMGM and FanDuel's performances. 

DraftKings purchased Golden Nugget Online Gaming in 2022, and Robins emphasized during the earning call that that acquisition was a wise choice, boosting the company's customer acquisition in Q1 of 2024

DraftKings' CEO admitted that Golden Nugget is still a smaller operator compared to DraftKings but possesses potential for growth. In May 2024, Golden Nugget was close to tripling its Michigan iGaming market share. This platform offers DraftKings-branded table games and attractive no deposit bonus Michigan deals. Since Golden Nugget's migration onto the DraftKings platform and products, there has been a spike in positive customer experience and higher conversion flows.