DraftKings announced that the high percentage of NFL favorites covering the spread over the final quarter of last year equated to losses of over $100 million for the Boston-based bookmaker.
Losing Proposition
There’s an old saying, “The house always wins.” However, that wasn’t the case for the nation’s No. 2 mobile sportsbook, as DraftKings experienced fourth-quarter losses exceeding $139 million, much of which was due to customer-friendly NFL outcomes.
The betting public generally prefers betting on the favorites and over the posted total in the game. DraftKings announced that NFL favorites won 75% or more of their games in 10 separate weeks of the 18-week NFL season. This is reported to be the highest such total since at least 1983, and it should be noted the average is 4.6 weeks per season in which favorites win at a 75% clip.
Higher holds, also known as win rates, are the holy grail of sports betting platforms, and to effectuate those desired results, sportsbooks have ramped up marketing efforts to promote parlay and same-game parlay wagering. Parlays are low-risk, high-reward sports betting catnip to the average sports bettor, and the holds are significantly higher due to the difficulty of winning them.
DraftKings announced a 10.5% structural hold and a 9.4% actual hold, which was only slightly better than the previous year. CEO Jason Robins noted this in the following statement:
“Actual sportsbook hold percentage continued to increase year-over-year as parlay handle mix trended higher, despite the most customer-friendly NFL sport outcomes in over 40 years.”
In the misery-loves-company department, NFL outcomes in the fourth quarter of 2024 were disappointing for not only DraftKings but also its archrival and the most popular US sportsbook, FanDuel, which also announced a losing 2024 football season ahead of its parent company, Flutter Entertainment’s, fourth-quarter earnings call.
BetMGM was not exempt from the misery either, as the No. 3 sportsbook announced an $85 million loss in the fourth quarter due to poor NFL results.
Super Bowl Silver Lining
Despite the dismal fourth quarter, the first six weeks of 2025 have started well, and the Super Bowl was seen as a win for the sportsbooks, as Philadelphia proved to be a mild upset over the Chiefs and the game went under the posted total of 49.
Moreover, many of the same-game parlays did not cash, as the lofty numbers expected of Saquon Barkley in terms of rushing yards and touchdowns were not reached. A superstar on the other side of the field, Travis Kelce, also had a statistically underwhelming performance which also caused many parlays to lose.
“Super Bowl LIX was the single biggest betting event in the history of BetMGM – it took the most bets and was one of the best single-game results in company history,” said Christian Cipollini, BetMGM senior trading manager, in a statement the day after the game.
DraftKings is also shaking off the aberration that was the customer-friendly fourth-quarter NFL results. Robins wrote “Looking ahead to 2025 and beyond, I am excited to further enhance our customer economics through new initiatives such as extending our lead in live betting and advancing cross-sell efforts to and from new verticals. Our focus remains on driving sustainable growth in revenue and profitability.”
