WEBVTT - DraftKings CEO Jason Robins Talks Earnings

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<v Speaker 1>Right shares of draftings honestly bouncing all over the place,

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<v Speaker 1>but currently up almost five percent after reporting third quarter results.

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<v Speaker 1>Look at that stot Go five percent gain. The Sports

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<v Speaker 1>Bending Company cut his full year revenue forecast below analyst estimates,

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<v Speaker 1>reported a wider and then expected loss per share. That

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<v Speaker 1>gets Drafting CEO Jason robbins, there's this idea that the

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<v Speaker 1>streets fixated on that there were customer friendly outcomes, particularly

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<v Speaker 1>in the realm of NFL. Is that true to your mind?

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<v Speaker 1>What's a customer friendly outcome?

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<v Speaker 2>Well? Q three actually we said that we had neutral outcomes,

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<v Speaker 2>so you know, we had exactly kind of as we expected,

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<v Speaker 2>and we ended up having a beat in Q three,

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<v Speaker 2>which is great. Q four, aside from these outcomes, would

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<v Speaker 2>have been on track for the same So you know,

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<v Speaker 2>basically what it means is that the favorites won a

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<v Speaker 2>lot and the big name players scored touchdowns and had

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<v Speaker 2>a lot of yards. And sometimes that happens in sports.

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<v Speaker 2>You know, the book sometimes wins, sometimes the customers win.

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<v Speaker 2>And it's hard to know, right because we're only you know,

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<v Speaker 2>halfway through the quarter yet how it's all going to end.

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<v Speaker 2>It could easily swing the other way. But at this

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<v Speaker 2>point for the quarter, at least the five weeks that

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<v Speaker 2>we're into it, the customers are winning, and you know,

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<v Speaker 2>over the long term that's great. We need our customers

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<v Speaker 2>to win. Sometimes they want to win sometimes that's part

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<v Speaker 2>of experiencing the product. So we're really excited though that

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<v Speaker 2>the fundamentals are super strong. We saw three hundred BIPs

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<v Speaker 2>year of year improvement in both promotional and gross margin percentage.

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<v Speaker 2>Cats were down twenty percent in the quarter. Lots of

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<v Speaker 2>really good things going on.

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<v Speaker 1>It's well, there's lots of things, full stop going on.

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<v Speaker 1>Let's get technology in a little bit. But in a

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<v Speaker 1>week where you have a US election and it's getting

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<v Speaker 1>towards the end of the year, the holidays are fast approaching,

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<v Speaker 1>how does sports betting stand out? Like what is the

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<v Speaker 1>consumer attitude towards placing a bet in a week like

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<v Speaker 1>this one?

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<v Speaker 2>Well, obviously a lot of distraction with the election going on,

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<v Speaker 2>but you know, as you might imagine, people were even

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<v Speaker 2>talking about speculating on one side or the other the

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<v Speaker 2>election markets, and that was available in certain places too.

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<v Speaker 2>So you know, I think it's very much part of

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<v Speaker 2>the culture now that people want to be you know,

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<v Speaker 2>a participant by having an idea, a prediction, a viewpoint

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<v Speaker 2>on what they think is going to happen. And I

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<v Speaker 2>think betting is really just you know, part of that

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<v Speaker 2>overall trend.

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<v Speaker 3>Jason, I want to jump in on that polymarket call

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<v Speaker 3>a lot of people's attention.

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<v Speaker 1>Would you go there?

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<v Speaker 3>Would you expand in pass sports?

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<v Speaker 2>Well, we would only do it if it were in

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<v Speaker 2>a legal and regulated fashion. So you know, these types

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<v Speaker 2>of markets on elections are regulated at the federal level.

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<v Speaker 2>It's different than the way betting is regulated. You know,

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<v Speaker 2>it's something that maybe we would you know, consider looking

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<v Speaker 2>into before the next election. But I do think that

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<v Speaker 2>it's only something that we would do in a legal,

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<v Speaker 2>regulated environment, which is what differentiates us from some of

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<v Speaker 2>those that are offering and now some are offering it

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<v Speaker 2>legally now too, there is a legal framework for it

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<v Speaker 2>as well, but not everybody is.

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<v Speaker 3>Let's just talk about therefore that passage of legalization. Is

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<v Speaker 3>that going to be easy are under the next administration?

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<v Speaker 3>I mean also just from the point of sports betting too,

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<v Speaker 3>we see Missouri come in line for example.

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<v Speaker 2>Well, definitely for us, it's really you know, the states

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<v Speaker 2>that are legalizing and so a lot of what we

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<v Speaker 2>were watching were the various outcomes in state houses and

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<v Speaker 2>governors races around the nation. Obviously, you know there is

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<v Speaker 2>some impact from federal federal government impacts every industry in

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<v Speaker 2>some way or another, but you know, taxes other ways,

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<v Speaker 2>corporate taxes, meaning but you know, in terms of legalization,

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<v Speaker 2>our action is really at the state level. So as

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<v Speaker 2>you knowed, Missouri is big win passed about initiative to

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<v Speaker 2>legalize sports betting, and very excited about that. Missouri is

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<v Speaker 2>the eighteenth largest state and a huge sports state. Really

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<v Speaker 2>great sports fans in Missouri, so excited about that one.

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<v Speaker 2>Hopefully that'll get up and running soon, and you know,

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<v Speaker 2>hopefully we'll see even more action when the legislators come

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<v Speaker 2>back in session.

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<v Speaker 1>In Q one, Jason, we focused a lot on this

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<v Speaker 1>program about how sport is access technology, right, a transition

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<v Speaker 1>from linear television to OTT and I'm fascinated by how

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<v Speaker 1>the betting markets either benefit or don't benefit from that. Right.

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<v Speaker 1>The consumer has so many options about how to watch

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<v Speaker 1>sport and pay for it. You know, it's astonishing. Actually

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<v Speaker 1>what flies out of my bank account each month, is

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<v Speaker 1>that a tailwind or a headwind to you when you're

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<v Speaker 1>thinking about bets being placed in parallel.

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<v Speaker 2>Well, I think it's actually a tail in that it's

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<v Speaker 2>part of the overall trend we're seeing, which is sports

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<v Speaker 2>and interest in sports continues to grow, and betting is

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<v Speaker 2>a part of that. They're very intertwined, so I think

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<v Speaker 2>they feed off each other as more and more, you know,

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<v Speaker 2>people can see more and more sports from around the world,

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<v Speaker 2>not just their favorite sports or their favorite teams, but

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<v Speaker 2>they can watch any team or they can watch any sport,

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<v Speaker 2>and that access is there that's going to be a

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<v Speaker 2>benefit to our business. But it's really part of the

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<v Speaker 2>same overall mega trend, which is, you know, information is

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<v Speaker 2>easier to come for the consumer, and the consumer wants

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<v Speaker 2>to be a more active participant because they have more

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<v Speaker 2>information and have a viewpoint on things. And I think

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<v Speaker 2>that's why you're seeing this mega trend around betting that

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<v Speaker 2>continues to grow the overall industry in the US and

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<v Speaker 2>really internationally as well.

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<v Speaker 3>Mega trend that you are going to continue to enhance

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<v Speaker 3>products into. Jason Robbins, we appreciate your time. DraftKings CEO