Five weeks into the job and the new boss already faces a tough scoreboard. Revenue came in light, adjusted earnings took a noticeable hit, and the full-year outlook got trimmed. Yet the man now running the company insists the path forward is clear: keep improving the product, lean harder into customer rewards, and turn stronger engagement into healthier profits over time. I’ve been watching this space long enough to know that bold talk after a soft quarter can sound like wishful thinking. This time, though, the early customer metrics suggest something real might be starting to take shape.
A Fresh Leader Steps Into The Spotlight With Mixed Results
The third-quarter numbers arrived with more caution than celebration. Revenue climbed a modest 2 percent to sit just under the $4 billion mark that many on the Street had hoped for. Adjusted EBITDA dropped roughly a quarter from the same period last year and also missed expectations. On a per-share basis the adjusted loss looked better than forecasts, but the headline net loss stretched past a billion dollars once a large non-cash charge tied to overseas operations was factored in.
None of that is ideal for a stock that has already shed more than half its value this year. Still, the new chief executive spent little time dwelling on the rear-view mirror. In his first public comments as the person ultimately accountable, he framed the results as a temporary detour rather than a permanent roadblock. The real story, he argued, sits in the daily behavior of customers who keep coming back more often and placing more bets.
That claim rests on a handful of encouraging internal figures. Average monthly players on the core U.S. sportsbook rose 9 percent. Total bet counts climbed 15 percent. When the wider U.S. operation is counted, average monthly players advanced 12 percent, with the online casino side jumping a much stronger 24 percent. Handle, the total amount wagered, grew 13 percent. Revenue from the sportsbook itself only edged up 4 percent, largely because the company chose to spend more aggressively on promotions. In other words, the top-line growth is being deliberately restrained in favor of building longer-term loyalty.
Why Promotions Matter More Than Ever Right Now
Competition for every active bettor has never felt fiercer. New states continue to open, existing operators keep raising their marketing budgets, and smaller platforms try to steal share with flashy sign-up offers. In that environment a pure price war quickly becomes a race to the bottom. The new leadership team appears to have decided that a smarter route involves rewarding the customers who already like the product enough to stick around.
A nationwide rewards program rolled out in September seems to be the centerpiece of that approach. Early feedback, according to the company, has been strongly positive. Players respond when they feel recognized. Points that convert into free bets, exclusive access, or better odds create a sense of belonging that a one-time bonus rarely matches. I’ve seen similar loyalty mechanics work in other consumer industries; once the habit forms, the incremental cost of keeping a customer often falls while lifetime value rises.
Of course the accounting impact shows up immediately. Higher promotional spend pressures the revenue take rate and the short-term margin. The company is transparent about that trade-off. Cost of sales is expected to hover near 58 percent of revenue through the rest of this year and into next. Management’s bet is that the mix of products customers eventually use will improve structural margins once the engagement base is larger and stickier.
Product Tweaks And The Search For Delight
Rewards alone rarely fix a product that feels clunky. The new chief has been clear that meaningful changes have already been made to the core experience. The exact details stay internal, yet the philosophy is easy to grasp: delight the customer at every touchpoint and the rest tends to follow. Faster odds updates, cleaner navigation, more personalized recommendations, and smoother cash-out options all fall into the category of quiet improvements that regular users notice even if outsiders never hear about them.
In my view this focus on day-to-day usability is overdue across the entire industry. Too many platforms still treat the app as a digital version of a brick-and-mortar sportsbook rather than a modern consumer product. When engagement metrics start climbing at the same time promotions increase, it becomes harder to argue that the money is simply being given away. Something in the product itself is encouraging people to interact more often.
Trading volume on the platform has surged more than 270 percent since July. That kind of jump is hard to ignore. Whether it proves sustainable will depend on how well the company can keep the experience feeling fresh without constantly escalating the size of the rewards.
The Prediction Market Side Bet
While the traditional sportsbook remains the core engine, attention and marketing dollars have also shifted toward a newer prediction product designed to compete with the pure event-contract platforms that have captured headlines. The company reports that the dedicated app attracted 140,000 fresh customers in a single recent month. That is a meaningful number for a product still in its relative infancy.
Prediction markets sit at an interesting intersection of sports, politics, entertainment, and pure speculation. They can attract a different demographic that may later migrate into traditional wagering. They also give the operator another lever for media spend that can be measured against incremental user growth. The early traction suggests the experiment is worth continuing, even if the absolute contribution to revenue remains modest for now.
I’ve found that companies that successfully layer adjacent products onto an existing customer base often create durable advantages. Cross-selling works best when the new offering feels native rather than bolted on. The current leadership appears determined to make that integration feel seamless.
Brazil’s Sudden Closure And The Impairment Hit
Not every market is moving in a friendly direction. A provisional measure in Brazil effectively banned sports betting and online gaming in September. The company responded by taking an $873 million non-cash impairment, the bulk of which related to that market. Management described the decision as disappointing yet necessary to clear the decks for long-term success elsewhere.
Writing down assets is never pleasant, but it does remove future amortization noise and forces a sharper focus on jurisdictions where the regulatory wind is at least neutral. Combined with a stretch of unfavorable sports results both in the United States and internationally, the Brazil charge helped push the full-year revenue midpoint down by $300 million and the adjusted EBITDA outlook lower by $160 million. The revised targets now sit near $17.6 billion in revenue and just under $2.5 billion in adjusted EBITDA for the year.
Those cuts were expected by many observers once the Brazil news broke and the sports outcomes turned against the books. Still, the magnitude serves as a reminder that even the largest operators remain exposed to sudden regulatory shifts and the natural variance of live sporting events.
Leverage, Capital Returns, And The Two-Year Horizon
Shareholders hoping for an immediate resumption of buybacks will have to wait. The new chief made clear that bringing net leverage back into the stated target range of two to two-and-a-half times remains the priority for the next roughly 24 months. Only after that balance-sheet work is largely complete will capital returns return to the conversation.
In the interim the emphasis stays on organic growth and steady debt reduction. That stance feels prudent. The industry still offers substantial runway: roughly half the U.S. population still lacks access to regulated sports betting, and about 90 percent lacks access to regulated online gaming. Expanding into those remaining states is not a partisan issue, the company argues, because regulated markets deliver consumer protections and tax revenue that unregulated alternatives cannot match.
Whether state legislatures move at the pace operators would prefer is another question. Progress has been uneven, yet each new market that opens tends to produce a surge of new accounts and handle that can last several years. Positioning the brand as the premium, customer-friendly choice before those markets open is part of the longer game now being played.
Turning Engagement Into Sustainable Profitability
The central tension in the current strategy is timing. Higher promotional investment and product development spending pressure near-term margins. Management’s conviction is that the resulting rise in player frequency and retention will eventually allow a more favorable mix of higher-margin products to lift overall profitability. Structural margin expansion, in other words, is expected to arrive after the customer base has been deepened rather than before.
That sequence is familiar in consumer technology and media businesses. Acquire and engage first, monetize more efficiently later. The risk is that competition forces the promotional intensity to remain elevated longer than planned, delaying the margin recovery. The opportunity is that a genuinely superior experience can reduce the need for constant discounting once critical mass is reached.
Early evidence of rising average monthly players and bet counts offers some support for the optimistic case. Whether those trends continue through the heavier promotional periods of the fall sports calendar and into next year will be the key test.
Industry Backdrop And Competitive Intensity
No operator exists in isolation. Media rights deals, celebrity partnerships, and aggressive customer acquisition campaigns from several well-capitalized rivals keep the cost of standing still extremely high. The new leadership team acknowledges the intensity while insisting that product quality and consistent rewards can still create differentiation.
One under-appreciated angle is the potential for better unit economics once a larger share of customers use multiple products. A sports bettor who also places the occasional casino wager or prediction-market contract tends to be more valuable and harder for a pure-play competitor to peel away. Encouraging that cross-usage without making the experience feel cluttered is an ongoing design challenge.
I’ve noticed that the operators who treat data as a genuine competitive advantage rather than a reporting afterthought usually pull ahead over multi-year periods. Personalization that feels helpful rather than intrusive, responsible gaming tools that actually protect customers, and rapid iteration on features that regular users request all require strong internal analytics. The current rhetoric suggests those capabilities are receiving renewed attention.
Looking Ahead With Cautious Optimism
The next several quarters will reveal whether the combination of product upgrades, a more generous rewards program, and disciplined cost management can offset the temporary drag from higher promotional spend and the loss of the Brazilian market. The revised full-year guidance already reflects a more conservative stance. Meeting or beating those lowered targets while continuing to grow the active player base would go a long way toward restoring confidence.
Longer term, the structural opportunity remains substantial. Millions of adults in the United States still cannot legally place a sports bet or play online casino games with a licensed operator. Each new state that joins the regulated market expands the total addressable opportunity. Operators that enter those markets with a polished product and an established rewards ecosystem stand to capture outsized share.
The new chief executive has staked his early reputation on the idea that delighting customers is the surest route to durable success. The first set of numbers under his watch were imperfect. The early behavioral signals from the customer base look more promising. How those two realities reconcile over the coming year will determine whether the current strategy is remembered as a successful turning point or merely another chapter in a difficult period for the stock.
For now the playbook is straightforward even if execution is hard: invest in the experience, reward loyalty, expand the product set carefully, repair the balance sheet, and wait for the remaining legal markets to open. Simple to describe. Far more demanding to deliver. The industry will be watching closely to see whether the latest leadership change finally tilts the odds in the company’s favor.
In the end, sports betting remains a business of both math and emotion. The math right now shows pressure on near-term profits. The emotion among at least some customers appears to be improving. Bridging that gap is the central task the new CEO has set for himself and the teams around him. Success is far from guaranteed, yet the early indicators of higher engagement offer a reason to stay interested rather than write the story off completely.
