WEBVTT - DraftKings CEO Jason Robins Talks World Cup Customer Retention

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Okay, ending the week with more tech earnings. Draft Kings

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<v Speaker 2>reported disappointing second quarter earnings amidst growing competition from new

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<v Speaker 2>prediction market players like Cowshi, but there's some post momentum

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<v Speaker 2>post World Cup, setting up a pretty strong back half

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<v Speaker 2>stock up seven and a half percent, on track for

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<v Speaker 2>its best day since June twenty sixth. Drafting CEO and

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<v Speaker 2>co founder Jason Robbins joins us it's interesting, right Initially

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<v Speaker 2>that was the reaction disappointment second quarter earnings. There were

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<v Speaker 2>favorable sports outcomes, there was promotional spending, and then this morning,

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<v Speaker 2>everyone you know, was like, actually, you know what, the

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<v Speaker 2>World Cup seems to have some tailwind with it.

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<v Speaker 1>Well, I think that really what you're seeing.

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<v Speaker 3>Is that, after having all the time to digest and

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<v Speaker 3>hear some of the context, people understand how strong a

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<v Speaker 3>position Draftings is in from a business perspective. Right now,

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<v Speaker 3>our core business contract to do about a billion dollars

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<v Speaker 3>in avadad this year. You know, just a few years

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<v Speaker 3>ago we were losing money in that business. Now it's

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<v Speaker 3>a very strong cash flow generator for us, and we

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<v Speaker 3>see really strong traction on predictions enormous growth over the

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<v Speaker 3>last month or two, and the best time of year

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<v Speaker 3>is about to come with you know, the fall season

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<v Speaker 3>and NFL and everything that that brings.

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<v Speaker 2>Okay, bear with me, But apparently people were betting on

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<v Speaker 2>whether you would say Calshi on the earnings call. Prediction

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<v Speaker 2>markets are a factor. Just react to that, Jason, please. Well, I,

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<v Speaker 2>you know, making.

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<v Speaker 3>Trades on whether someone is going to say something in

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<v Speaker 3>earning's call probably isn't something that I think should be

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<v Speaker 3>out there in my opinion, But nevertheless, I understand it is.

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<v Speaker 1>I didn't know that though I didn't read it. I

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<v Speaker 1>don't remember. I don't think I said that.

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<v Speaker 3>No, hopefully not too many people took the positive side

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<v Speaker 3>of that one.

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<v Speaker 2>Jason, can you can you just explain the World Cup,

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<v Speaker 2>how it manifested for draft kings, the behavior of people

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<v Speaker 2>that went to DraftKings during it, and whether there is

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<v Speaker 2>some momentum carried out of it for the second half

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<v Speaker 2>of this year.

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<v Speaker 3>I mean, World Cup on pretty much every metric that

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<v Speaker 3>we look at, exceeded our expectations.

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<v Speaker 1>We acquired more customers.

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<v Speaker 3>That was both true of predictions but also true of

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<v Speaker 3>our online sports betting business. We were way better than

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<v Speaker 3>we expected. From an acquisition standpoint, we ended up having

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<v Speaker 3>much more efficient acquisition to our cacs, we're twenty five

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<v Speaker 3>percent lower than we expected.

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<v Speaker 1>Total engagement was big.

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<v Speaker 3>We had a really strong increase in mups as we

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<v Speaker 3>published in our report. Also saw a really strong post

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<v Speaker 3>World Cup engagement. Probably the most exciting thing to me,

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<v Speaker 3>because you know a lot of people were probably thinking

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<v Speaker 3>us included this World Cup audience. Are they going to

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<v Speaker 3>stick around or is it sort of come you know,

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<v Speaker 3>bet on the World Cup, trade on the World Cup

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<v Speaker 3>and done.

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<v Speaker 1>Not at all the case. July.

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<v Speaker 3>We actually saw a twenty percent handle increase after the

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<v Speaker 3>World Cup ended, which is an enormous number compared to

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<v Speaker 3>where we were going into it.

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<v Speaker 1>So you're absolutely right.

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<v Speaker 3>I think a lot of momentum coming out of the

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<v Speaker 3>World Cup right going into our most important time of year.

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<v Speaker 1>So it couldn't have been time better. And Jason very quickly.

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<v Speaker 2>Those were people that went to DraftKings maybe for the

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<v Speaker 2>first time in the World Cup and then stayed.

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<v Speaker 3>A lot of them were a lot of them were

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<v Speaker 3>people that had played previously and activated to continue to

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<v Speaker 3>play afterwards. Remember after NFL, and sometimes a lot of

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<v Speaker 3>customers go dormant, so these big moments are really, you know,

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<v Speaker 3>great opportunities to get people to engage with the product again.

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<v Speaker 3>And you never know if they're going to drop off

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<v Speaker 3>or not we see that sometimes, or if they're going

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<v Speaker 3>to continue. And at least for the World Cup audience,

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<v Speaker 3>it seems like both the new customers and the ones

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<v Speaker 3>who reactivated are all continuing to play through July, and

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<v Speaker 3>I think coming into August and September, when we have

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<v Speaker 3>our most busy time of year, it's can only continue.

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<v Speaker 2>Jason Imprediction Markets, the field of players seem very focused

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<v Speaker 2>on how they communicate with the under twenty one category.

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<v Speaker 2>What is draw King's policy and approach basically to marketing

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<v Speaker 2>to that demographic quickly?

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<v Speaker 3>Well, I think this is an important distinction distinction between

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<v Speaker 3>DraftKings and some of these other companies out there. We

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<v Speaker 3>are not, as you see some of them doing marketing

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<v Speaker 3>that you can pay your rent money and marketing to

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<v Speaker 3>college campuses on attorneys and things like that. We are

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<v Speaker 3>focusing on marketing to adults and position this as an

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<v Speaker 3>entertainment product, which I think is the right way to

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<v Speaker 3>do it. And you know, listen, those are things that

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<v Speaker 3>right now are getting a little bit of scrutiny, and

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<v Speaker 3>I think eventually they'll get rained in, but that's not

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<v Speaker 3>up to us. But I do think it's something that

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<v Speaker 3>we feel like we are really you know, as a

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<v Speaker 3>long time trusted brand that's been out there for a

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<v Speaker 3>long time and plays the long game and really understands,

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<v Speaker 3>you know, it's not as much as it might get

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<v Speaker 3>you short term volumes. That's not what you want to

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<v Speaker 3>be doing in marketing on college campuses and things like that.

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<v Speaker 2>Draft Kings Ce Jason Robbins, thank you very much for

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<v Speaker 2>your time on Bloomberg Tech.