DraftKings Secures a $500 Million Credit Line from a Group Led by Morgan Stanley
DraftKings Secures $500 Million Credit Facility for Expansion
Sports entertainment giant DraftKings has secured a new credit facility of up to $500 million, aiming to bolster its liquidity and support aggressive expansion plans in the evolving regulated gaming market.
The new credit facility, announced in 2025, is significantly larger than the previous one, with a maximum limit of $500 million compared to the $125 million of the old one. This increase in available credit is expected to provide DraftKings with greater liquidity and flexibility in its operations.
The new facility is structured to offer more substantial financial flexibility than previous loans, enabling DraftKings to invest heavily in overcoming iGaming regulatory challenges and market expansion. This loan complements or expands upon previous borrowing, including a $600 million senior secured term loan B credit facility announced earlier in 2025.
The exact interest rates of the new credit facility are not specified, but DraftKings can choose the cheaper of two rates. At current interest rates, the difference between the old and new rates is likely to be over a percentage point, with the new rate around 7.07%.
The new credit facility is provided by a syndicate, with Morgan Stanley acting as the lead bank. However, the specific use of the new credit facility funds remains undisclosed by DraftKings.
Recent months have seen DraftKings diversifying its services with new offerings, although the new credit facility does not have a confirmed connection to these new offerings. One of the new services is the launch of player vs player poker games in a second state this year.
In addition, DraftKings' CEO, Jason Robins, has confirmed the exploration of a prediction market, which is expected to be before the next US presidential election. The prediction market is a new offering that has not been specified in detail.
Despite the new credit facility, DraftKings has not announced any specific investment or expansion plans for the funds. However, the new facility represents a strategic financial tool to underpin aggressive expansion plans in the U.S. and potentially other jurisdictions.
It is worth noting that the former credit line, worth $125 million, taken out in 2022 with Banc of California and Citizens Bank, has been closed and fully replaced with the new one.
In conclusion, DraftKings' new credit facility is a significant step towards bolstering liquidity for expansion and enhancing overall growth capacity. The new facility, along with recent service diversifications, positions DraftKings well for continued growth in the evolving regulated gaming market.
The new credit facility, aiming to provide DraftKings with greater liquidity and flexibility in its operations, will allow for heavier investments in overcoming iGaming regulatory challenges and market expansion, which involves a significant degree of technology.
This loan, complementing previous borrowing, can potentially be utilized in strategic areas such as the development of fintech solutions or integration of advanced technology to streamline and enhance user experiences, both of which are crucial factors in the competitive gaming market.
