Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Okay, ending the week with more tech earnings. Draft Kings
Speaker 2: reported disappointing second quarter earnings amidst growing competition from new
Speaker 2: prediction market players like Cowshi, but there's some post momentum
Speaker 2: post World Cup, setting up a pretty strong back half
Speaker 2: stock up seven and a half percent, on track for
Speaker 2: its best day since June twenty sixth. Drafting CEO and
Speaker 2: co founder Jason Robbins joins us it's interesting, right Initially
Speaker 2: that was the reaction disappointment second quarter earnings. There were
Speaker 2: favorable sports outcomes, there was promotional spending, and then this morning,
Speaker 2: everyone you know, was like, actually, you know what, the
Speaker 2: World Cup seems to have some tailwind with it.
Speaker 1: Well, I think that really what you're seeing.
Speaker 3: Is that, after having all the time to digest and
Speaker 3: hear some of the context, people understand how strong a
Speaker 3: position Draftings is in from a business perspective. Right now,
Speaker 3: our core business contract to do about a billion dollars
Speaker 3: in avadad this year. You know, just a few years
Speaker 3: ago we were losing money in that business. Now it's
Speaker 3: a very strong cash flow generator for us, and we
Speaker 3: see really strong traction on predictions enormous growth over the
Speaker 3: last month or two, and the best time of year
Speaker 3: is about to come with you know, the fall season
Speaker 3: and NFL and everything that that brings.
Speaker 2: Okay, bear with me, But apparently people were betting on
Speaker 2: whether you would say Calshi on the earnings call. Prediction
Speaker 2: markets are a factor. Just react to that, Jason, please. Well, I,
Speaker 2: you know, making.
Speaker 3: Trades on whether someone is going to say something in
Speaker 3: earning's call probably isn't something that I think should be
Speaker 3: out there in my opinion, But nevertheless, I understand it is.
Speaker 1: I didn't know that though I didn't read it. I
Speaker 1: don't remember. I don't think I said that.
Speaker 3: No, hopefully not too many people took the positive side
Speaker 3: of that one.
Speaker 2: Jason, can you can you just explain the World Cup,
Speaker 2: how it manifested for draft kings, the behavior of people
Speaker 2: that went to DraftKings during it, and whether there is
Speaker 2: some momentum carried out of it for the second half
Speaker 2: of this year.
Speaker 3: I mean, World Cup on pretty much every metric that
Speaker 3: we look at, exceeded our expectations.
Speaker 1: We acquired more customers.
Speaker 3: That was both true of predictions but also true of
Speaker 3: our online sports betting business. We were way better than
Speaker 3: we expected. From an acquisition standpoint, we ended up having
Speaker 3: much more efficient acquisition to our cacs, we're twenty five
Speaker 3: percent lower than we expected.
Speaker 1: Total engagement was big.
Speaker 3: We had a really strong increase in mups as we
Speaker 3: published in our report. Also saw a really strong post
Speaker 3: World Cup engagement. Probably the most exciting thing to me,
Speaker 3: because you know a lot of people were probably thinking
Speaker 3: us included this World Cup audience. Are they going to
Speaker 3: stick around or is it sort of come you know,
Speaker 3: bet on the World Cup, trade on the World Cup
Speaker 3: and done.
Speaker 1: Not at all the case. July.
Speaker 3: We actually saw a twenty percent handle increase after the
Speaker 3: World Cup ended, which is an enormous number compared to
Speaker 3: where we were going into it.
Speaker 1: So you're absolutely right.
Speaker 3: I think a lot of momentum coming out of the
Speaker 3: World Cup right going into our most important time of year.
Speaker 1: So it couldn't have been time better. And Jason very quickly.
Speaker 2: Those were people that went to DraftKings maybe for the
Speaker 2: first time in the World Cup and then stayed.
Speaker 3: A lot of them were a lot of them were
Speaker 3: people that had played previously and activated to continue to
Speaker 3: play afterwards. Remember after NFL, and sometimes a lot of
Speaker 3: customers go dormant, so these big moments are really, you know,
Speaker 3: great opportunities to get people to engage with the product again.
Speaker 3: And you never know if they're going to drop off
Speaker 3: or not we see that sometimes, or if they're going
Speaker 3: to continue. And at least for the World Cup audience,
Speaker 3: it seems like both the new customers and the ones
Speaker 3: who reactivated are all continuing to play through July, and
Speaker 3: I think coming into August and September, when we have
Speaker 3: our most busy time of year, it's can only continue.
Speaker 2: Jason Imprediction Markets, the field of players seem very focused
Speaker 2: on how they communicate with the under twenty one category.
Speaker 2: What is draw King's policy and approach basically to marketing
Speaker 2: to that demographic quickly?
Speaker 3: Well, I think this is an important distinction distinction between
Speaker 3: DraftKings and some of these other companies out there. We
Speaker 3: are not, as you see some of them doing marketing
Speaker 3: that you can pay your rent money and marketing to
Speaker 3: college campuses on attorneys and things like that. We are
Speaker 3: focusing on marketing to adults and position this as an
Speaker 3: entertainment product, which I think is the right way to
Speaker 3: do it. And you know, listen, those are things that
Speaker 3: right now are getting a little bit of scrutiny, and
Speaker 3: I think eventually they'll get rained in, but that's not
Speaker 3: up to us. But I do think it's something that
Speaker 3: we feel like we are really you know, as a
Speaker 3: long time trusted brand that's been out there for a
Speaker 3: long time and plays the long game and really understands,
Speaker 3: you know, it's not as much as it might get
Speaker 3: you short term volumes. That's not what you want to
Speaker 3: be doing in marketing on college campuses and things like that.
Speaker 2: Draft Kings Ce Jason Robbins, thank you very much for
Speaker 2: your time on Bloomberg Tech.