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Headline: DraftKings and Block: Navigating the Changing Landscape of Sports Betting and Digital Payments
The world of sports betting and digital payments is evolving rapidly, and two prominent players, DraftKings and Block (formerly Square), are making strategic moves to stay ahead of the game.
DraftKings
DraftKings, one of the biggest sports betting companies in North America, is currently trading as DKNG with a market cap of $23 billion. The company, which was one of the first U.S. sportsbooks offering live betting and in-game parlays, has used its scale and technology platform to stay ahead of competition and offer new products.
Recent developments for DraftKings include exploring opportunities in the prediction market space to expand its product offerings. This move comes as prediction markets using CFTC-authorized futures contracts have gained popularity as legal alternatives in states where sports betting is still illegal.
However, the company has faced a slight setback with the entry of ESPN into the sports betting market. This new competitor, while potentially removing a marketing partner, adds a significant competitor to DraftKings.
Despite this, DraftKings' adjusted EBITDA accelerated by 37% in the second quarter compared to the same period last year, and the success of the company is partly due to sportsbook-friendly outcomes, which contrasted with the first quarter's NCAA Basketball Championship Tournament results.
Block
Block, trading as XYZ, is behind Cash App and Square, and its stock price is currently $74.91, with a market cap of $46 billion. The company is experiencing growth, with its Cash App being a growing driver for the company, and improving monetization of its users.
Block's gross profit margin is expanding as it moves upmarket to larger merchants, and its platform gross margin remains in the low-50% range, even as it scales its advertising business. However, the company faced a dip in its device gross margin, falling to negative 29% in the fourth quarter of last year due to holiday sales.
On the other hand, Gross payment volume for Square, another part of Block's business, increased by 10% last quarter. The company is also seeing stronger demand in international markets, representing a growth opportunity for the business.
Conclusion
Both DraftKings and Block are navigating the changing landscape of their respective industries with strategic moves and growth initiatives. As the world of sports betting and digital payments continues to evolve, these companies will undoubtedly continue to adapt and innovate to maintain their competitive edge.
