DraftKings upsizes term loan to $600M on strong investor demand

DraftKings went to market in February 2025 looking to borrow $500 million. Lenders showed up with enough enthusiasm that the company walked away with $600 million instead.

The online sports betting and iGaming operator launched syndication for a senior secured term loan B facility on February 18, 2025, initially targeting $500 million. Demand came in strong enough to justify an upsize, and the deal closed at $600 million on March 4, 2025.

The terms of the deal

The loan carries an interest rate of SOFR plus 1.75% per annum. It was issued at 99.50 cents on the dollar, meaning investors paid slightly below face value, a standard structure that gives lenders a modest yield boost at closing.

The facility matures in March 2032, giving DraftKings a seven-year runway before repayment. Annual amortization is set at 1% of the principal, which translates to roughly $6 million per year in mandatory paydowns.

Proceeds are earmarked for general corporate purposes. As of mid-2026, the term loan B carried a balance of approximately $575 million on DraftKings’ books, net of issuance costs, reflecting the modest amortization schedule working as designed.

Why this matters for DraftKings

Raising $600 million through debt rather than equity has a specific strategic logic: it avoids diluting existing shareholders. When a company issues new shares to raise capital, every existing investor’s ownership percentage shrinks. Debt, by contrast, leaves the share count untouched.

DraftKings has been on a trajectory of revenue expansion across its core verticals: sports betting, iGaming, and daily fantasy sports. The company operates in a market that has grown substantially since the Supreme Court’s 2018 decision opened the door for states to legalize sports wagering.

Reading the competitive landscape

DraftKings pricing at SOFR plus 1.75% reflects the company’s position as an established operator with real revenue. For context, companies with weaker credit profiles in the gaming sector have paid spreads well above 300 basis points on comparable facilities. DraftKings landing at 175 basis points over SOFR suggests the lender base sees it as a reasonably creditworthy borrower, even if it is not yet generating the kind of steady free cash flow that would earn it investment-grade status.

The competitive dynamics in online gaming remain fierce, with Flutter Entertainment’s FanDuel holding a significant market share position alongside DraftKings. A seven-year term loan removes near-term refinancing risk and lets management focus on operations rather than capital markets.

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