DraftKings recruits fewer bettors than expected, despite freebies.

It was impossible to watch this year’s Super Bowl without being bombarded with ads for online sports betting services, as the industry seized on a wave of states legalizing their business to capture new customers.

But as DraftKings, one of the giants of the field, reports quarterly results on Friday, Wall Street has lost faith that the company will turn a profit anytime soon. The company’s shares are down 60 percent in the past year, and fell more than 18 percent in early trading on Friday following the company’s financial report.

DraftKings lost $326 million in the fourth quarter, and had fewer users than expected. The loss came despite healthy growth in the top line in the last three months of 2021, with sales rising 47 percent to $473 million.

The Super Bowl ad blitz is expected to further bolster legalized sports betting. Nonetheless, the company told investors to expect nearly $1 billion in additional losses from operations this year.

The problem is the cost of gaining new customers. Investors aren’t worried about the potential size of the market; analysts at MoffettNathanson predict online sports betting will reach nearly $11 billion in sales by 2025, up from $3.6 billion. But consider this: DraftKings enticed new customers to its sports betting business with $140 million in promotions and incentives, much of it direct money into their accounts, according to MoffettNathanson’s estimates. On top of that, it spent nearly $300 million on overall sales and marketing (on things like its $6.5 million 30-second Super Bowl ad).

Some analysts worry that those promotional costs may not pay off if customers don’t prove to be loyal. Companies must also contend with high taxes that states have imposed on online betting sites; New York State, for example, has a 51 percent levy. That makes it even harder for betting businesses to turn a profit.

Robert Fishman of MoffettNathanson reckons that DraftKings will not have a positive cash flow until 2025 and will not actually be profitable until 2028.

“We would have thought there would be fewer promos in New York because of the tax rate, but the companies have been looser,” Barry Jonas, an analyst at Truist told the DealBook newsletter. “Investors are really questioning long-term gaming profitability” of these companies.

That could mean DraftKings and its rivals will be forced to focus on retaining customers, while also cutting costs, instead of adding new ones — and potentially see their valuations fall even further as their growth slows.

“Unquestionably, industry stakeholders will need to shift focus,” said Lloyd Danzing, the founder of the gaming investing and advisory firm Sharp Alpha Advisors.