Over the past few years, the landscape of digital entertainment has shifted dramatically. As traditional cable subscriptions decline and streaming becomes king, another digital juggernaut is quietly dominating the consumer discretionary sector: online sports betting. At the heart of that boom is DraftKings Inc. (NASDAQ: DKNG), a pioneer in mobile wagering, fantasy sports, and now, a serious contender in the online casino space.

DraftKings has positioned itself as a market leader in an industry with explosive potential. But recent stock performance has been turbulent. So, for the long-term investor asking whether DraftKings is a safe bet, the answer requires nuance. Not blind optimism. Not fear either. Instead, context—and that context starts with understanding the stock’s journey, its broader market, and the technological momentum it’s riding.

DKNG’s Performance in Context

Looking at the six-month performance chart, DraftKings is currently trading at $33.29, down around 9.7% over that period. After reaching a six-month high near $53.61, the stock has steadily declined from its February peak. The fall, while notable, isn’t a red flag in isolation. Many high-growth tech and entertainment stocks experience this type of fluctuation following strong earnings cycles or aggressive price runs.

DraftKings’ current market cap sits at $16.64 billion, placing it firmly in mid-cap territory—room to grow, but established enough to avoid being classed as speculative. Its beta of 2.15 tells us that it’s more volatile than the broader market. That’s not surprising for a growth stock in a still-regulating industry like online gambling. But for investors with a multi-year horizon, this volatility could present an opportunity, especially as the company continues to expand into new states and verticals.

Also worth noting is the volume: nearly 12 million shares are trading hands on an average day, reflecting strong liquidity and institutional interest. With a 52-week range from $28.69 to $53.61, its current price puts it closer to the lower end, suggesting potential value if you believe in the company’s direction.

The Industry Tailwinds

The North American betting market, specifically the U.S., is undergoing a transformation not seen since the dawn of online retail. Since the 2018 repeal of PASPA (the Professional and Amateur Sports Protection Act), 38 states have legalized sports betting in some form. That unlocks an addressable market worth tens of billions.

DraftKings operates in nearly every state that has legalized mobile betting and has made strategic inroads into iGaming (online casinos) and daily fantasy sports. Its platform is slick, intuitive, and caters to both casual bettors and power users.

Part of this rapid growth comes from aggressive customer acquisition strategies. Sign-up promos, odds boosts, and risk-free bets are becoming a core part of the onboarding funnel—something provided by Covers.com and similar affiliate platforms that drive traffic to betting operators through promotional codes and data-driven content. These partnerships aren’t just marketing tools—they’re growth engines.

That strategy has paid off. DraftKings posted a 25% rise in average revenue per user in Q1 2024. The platform’s high retention rate, bolstered by personalized in-app offers and constant product innovation, keeps users engaged long after the initial promo fades.

Mobile, Micro, and the Rise of Casino Apps

While sports betting has captured headlines, it’s DraftKings’ online casino arm that may represent the true long-term engine. Mobile casinos, where users play slots, table games, and live-dealer experiences via smartphone, are growing faster than traditional sports wagering. They also offer better margins for operators.

Mobile-first interfaces mean users aren’t just betting on a game once a week—they’re playing blackjack at lunch, spinning a digital roulette wheel on the train, and collecting bonuses in gamified loyalty programs. In the same way that apps like Robinhood revolutionized stock trading, DraftKings is gamifying the gambling experience. This kind of product-market fit is critical in today’s attention economy.

DraftKings has been investing in its own tech stack, distancing itself from white-label providers. That’s a strong moat for long-term investors. It owns its own platform, giving it control over customer experience, scalability, and data analytics—key drivers of recurring revenue.

Financial Fundamentals and Risks

DraftKings remains unprofitable, with an EPS (TTM) of -$1.05. That might spook some conservative investors. But context matters: the company is reinvesting heavily into growth, much like Amazon did in its early years. Profitability isn’t the key metric here—user acquisition, engagement, and market share are.

What’s more, Wall Street remains optimistic. The 1-year target estimate for DKNG sits at $54.14—more than 60% upside from current levels. Analysts are bullish not just on DraftKings, but on the macro trend of legalized betting and digital gaming.

With an earnings report due May 8, 2025, investor eyes will be on revenue growth, guidance updates, and perhaps most importantly, any signals of narrowing losses. If DraftKings can continue to compress its burn rate while maintaining growth momentum, sentiment could swing quickly.

International Potential and Competitive Edges

Right now, DraftKings’ operations are U.S.-centric—but that’s not a limitation. It’s a focused strategy. The company is waiting for the right regulatory climate internationally before committing capital abroad. That conservative expansion model is smart. Instead of chasing risk, DraftKings is concentrating on scale and product depth in the largest, most regulated betting market on the planet.

That said, the competition is stiff. Flutter (FanDuel’s parent company), BetMGM, Caesars, and Penn Entertainment are all playing in the same sandbox. But DraftKings’ brand loyalty, mobile UX, fantasy roots, and in-house tech remain differentiators.

It’s also positioned to benefit from broader shifts in entertainment. As sports leagues embrace data, streaming, and betting partnerships, DraftKings becomes not just a gambling company, but a sports media tech company. This matters for long-term valuation, especially as it courts potential future M&A activity or strategic partnerships.

Regulation and Reputation

Of course, no analysis would be complete without addressing the elephant in the room: regulation. While the tailwinds are strong, the political climate can shift. States are increasingly scrutinizing advertising practices and problem gambling rates, particularly among younger users.

DraftKings has been proactive here, building out responsible gaming initiatives and lobbying for consistent frameworks. It wants to be regulated, because regulation legitimizes the space.

Reputation-wise, it scores better than many peers, in part because of its fantasy sports legacy and U.S. focus. It doesn’t carry the same stigma that some offshore operators still wrestle with.

Is It a Safe Bet?

“Safe” is a relative term. DraftKings is a high-growth, high-volatility stock in an industry still being shaped. It is not a defensive utility stock. But it is a category leader in a fast-growing, tech-driven vertical, with scalable infrastructure, a loyal customer base, and bullish analyst sentiment.

If you’re a long-term investor who can stomach short-term dips for long-term upside, DKNG is one of the most compelling plays in digital consumer entertainment. Especially at current price levels, which offer an entry point well below its February highs.

DraftKings isn’t just about betting. It’s about behavioral shifts in how people engage with sports, games, and digital experiences. And it’s building more than a platform—it’s building an ecosystem. For those willing to ride out the volatility, the potential rewards might be worth the risk.