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The Push to Legalize Sports Betting Fuels DraftKings' Rise

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Sports Betting and the Rise of DraftKings

Sports betting in the U.S. is booming. For the 2021 NFL season, an estimated 45 million Americans are expected to wager a total of at least $12 billion. Since a 2018 Supreme Court ruling, sports betting is now legal in more than 30 states.

A flood of new customers eager for risk and excitement has made DraftKings one of the nation's biggest sportsbooks.

In November, the company announced third-quarter revenue increased 60% from a year earlier to $213 million. During that same period, with mobile betting launching in several states, the company said it had on average 1.3 million monthly unique paying customers engaged with its platform.

"We've seen just massive, massive levels of engagement, from the perspective of people that are excited about being able to add this component to their viewing experience, whether it's in-person or at home in places where you have mobile betting," said Bill Miller, president and CEO of the American Gaming Association.

And the online sports betting and gaming industry is just starting to grow. Only 4% of gross gaming revenue in the U.S. was generated online in 2021 compared with 45% in the U.K., which is a more mature market, according to Wall Street research firm Argus.

But critics argue that greater access to mobile sports betting could lead to an increase in gambling addiction. The National Council on Problem Gambling estimates the cost of obsessive gambling in the U.S. is $7 billion annually, including fees related to the justice system, job loss and bankruptcy. 

To prevent gambling issues DraftKings advises users to set limits on how much money you deposit in your account, how much money you wager and on the amount of time you play.

"The last thing we want at this exciting stage when people are talking about all the great things happening is to have negative experiences for people so this is something we made a priority at the company," DraftKings CEO Jason Robins said in August 2019. "Responsible gaming is in our mission statement."

So what does the future look like for legal sports betting in America and what challenges lie ahead for sports betting providers like BetMGM, FanDuel and DraftKings.

Watch the video to find out what's next for DraftKings.

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Disclosure: CNBC parent Comcast and NBC Sports are investors in FanDuel.

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