1 00:00:02,520 --> 00:00:07,080 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,320 --> 00:00:11,480 Speaker 2: Drafting CEO Jason Robbins delighted, say joins us. There has 3 00:00:11,520 --> 00:00:15,800 Speaker 2: been some let's say, back of the Napkin math, and 4 00:00:15,840 --> 00:00:19,479 Speaker 2: people look at the revenue forecast being lowered by about 5 00:00:19,520 --> 00:00:22,880 Speaker 2: two hundred million dollars. Right, Bear with me, Jason, Is 6 00:00:22,920 --> 00:00:27,280 Speaker 2: that exactly how much DraftKings lost on March Madness? The 7 00:00:27,320 --> 00:00:28,640 Speaker 2: two hundred million dollar figure. 8 00:00:30,200 --> 00:00:32,680 Speaker 1: No, we actually put out the numbers. We have a 9 00:00:32,720 --> 00:00:35,480 Speaker 1: bridge in our earnings materials. It was a little bit less, 10 00:00:35,479 --> 00:00:38,200 Speaker 1: but overall it's not too far off. 11 00:00:39,360 --> 00:00:41,640 Speaker 3: Okay, talk to us a little bit about what's too 12 00:00:41,640 --> 00:00:44,920 Speaker 3: far off as well? What else is driving perhaps an 13 00:00:44,920 --> 00:00:48,159 Speaker 3: expected downgrade in full year guidance. Analysts seem to be 14 00:00:48,159 --> 00:00:50,519 Speaker 3: taking this well on the chim as our investors, but 15 00:00:50,600 --> 00:00:52,920 Speaker 3: the regulatory environment as well. How much you haven't in 16 00:00:52,960 --> 00:00:53,519 Speaker 3: you once for that? 17 00:00:55,280 --> 00:00:57,720 Speaker 1: Well, what we we put this out there. We had 18 00:00:57,720 --> 00:01:00,800 Speaker 1: about one hundred and seventy million from sport outcomes, and 19 00:01:00,840 --> 00:01:07,120 Speaker 1: then thirty million came from Jack Pocket being caused to 20 00:01:07,160 --> 00:01:09,600 Speaker 1: not be operating anymore in Texas. But then the overall 21 00:01:09,600 --> 00:01:12,560 Speaker 1: fundamentals of the business were actually very strong. We saw 22 00:01:12,720 --> 00:01:16,959 Speaker 1: increased to structural hold rate, our promotional efficiency increase, so 23 00:01:17,240 --> 00:01:20,280 Speaker 1: some of those things offset as well. So really the 24 00:01:20,360 --> 00:01:23,039 Speaker 1: fundamentals of the business are about as healthy as can be. 25 00:01:23,200 --> 00:01:25,560 Speaker 1: And I think the real question is will all these 26 00:01:25,600 --> 00:01:28,680 Speaker 1: sport outcomes turn around in two quarters in a row now? 27 00:01:28,720 --> 00:01:31,760 Speaker 1: But obviously that happens, and that's part of the greatness 28 00:01:31,760 --> 00:01:33,920 Speaker 1: of the product is that customers can win, and they 29 00:01:33,920 --> 00:01:35,760 Speaker 1: can go on winning streaks like this, and it makes 30 00:01:35,760 --> 00:01:37,880 Speaker 1: it a lot of fun, obviously, And you know, we'll 31 00:01:37,920 --> 00:01:40,399 Speaker 1: see it was the first time and I think second 32 00:01:40,440 --> 00:01:42,440 Speaker 1: time ever there were all four number one seeds in 33 00:01:42,480 --> 00:01:44,640 Speaker 1: the final four. Only the first time ever that that 34 00:01:44,760 --> 00:01:47,720 Speaker 1: happened with also all twos in one three seed in 35 00:01:47,720 --> 00:01:51,320 Speaker 1: the Elite eight, So you never know. Maybe there will 36 00:01:51,320 --> 00:01:53,480 Speaker 1: be another year like that, but probably not. It was 37 00:01:53,520 --> 00:01:57,000 Speaker 1: more likely an anomaly. And you know NBA playoffs already 38 00:01:57,000 --> 00:01:58,720 Speaker 1: have had a bunch of upsets, so it tends to 39 00:01:58,800 --> 00:02:00,600 Speaker 1: kind of swing around the other way over time. 40 00:02:00,720 --> 00:02:04,920 Speaker 3: Ah, too much consistency. But what also is consistent, Jason, 41 00:02:05,240 --> 00:02:07,680 Speaker 3: is what a massive jump in your monthly active use is. 42 00:02:07,680 --> 00:02:10,440 Speaker 3: When you talk about the jackpot in particular, and I'm 43 00:02:10,440 --> 00:02:15,520 Speaker 3: interested in how jackpocket is transferring to other sports casino 44 00:02:15,560 --> 00:02:17,560 Speaker 3: games and the likes or are people sticking to that 45 00:02:18,000 --> 00:02:18,840 Speaker 3: lottery application. 46 00:02:20,600 --> 00:02:24,840 Speaker 1: Well, Jackpocket is still very early in its growth. It's 47 00:02:24,880 --> 00:02:27,280 Speaker 1: still quite nascent, so we believe there's a ton of 48 00:02:27,360 --> 00:02:29,880 Speaker 1: upside for that business and we're excited about it. We 49 00:02:29,919 --> 00:02:33,120 Speaker 1: haven't fully integrated it into the DraftKings app yet, we 50 00:02:33,200 --> 00:02:35,960 Speaker 1: haven't put it on our platform yet, which should dramatically 51 00:02:36,000 --> 00:02:39,480 Speaker 1: increase both the conversion metrics and also the cross sellability 52 00:02:39,480 --> 00:02:42,000 Speaker 1: and marketing ability. And the cross sells already well above 53 00:02:42,040 --> 00:02:44,720 Speaker 1: our expectations, so we think there's even more upside there, 54 00:02:45,360 --> 00:02:46,919 Speaker 1: so we're pretty excited about it. We think there's a 55 00:02:46,960 --> 00:02:49,040 Speaker 1: lot of growth potential, but it's still small, so the 56 00:02:49,080 --> 00:02:52,760 Speaker 1: overall impact on the business isn't great yet, but hopefully 57 00:02:52,760 --> 00:02:55,240 Speaker 1: that changes as jack Pocket continues to grow. 58 00:02:56,400 --> 00:03:00,200 Speaker 2: Jason, in your industry, there are big almost legacy names 59 00:03:00,240 --> 00:03:02,880 Speaker 2: Las Vegas Sands, for example, that are pulling out of 60 00:03:03,000 --> 00:03:07,360 Speaker 2: bids for land based casinos, and I wonder how much 61 00:03:07,400 --> 00:03:13,240 Speaker 2: you can assess their nervousness that online gambling just cannibalizes 62 00:03:13,320 --> 00:03:16,320 Speaker 2: demand for land base and how that impacts you. 63 00:03:18,160 --> 00:03:20,600 Speaker 1: Well, it's certainly a perception that we have to fight 64 00:03:20,680 --> 00:03:23,480 Speaker 1: because it's out there. I do think that the facts 65 00:03:23,480 --> 00:03:26,160 Speaker 1: are very mixed on that. While there's certainly some examples 66 00:03:26,200 --> 00:03:28,960 Speaker 1: you can point to where there's been you know, diminishing 67 00:03:29,000 --> 00:03:31,800 Speaker 1: markets where they've had online gaming, it's also, you know, 68 00:03:31,880 --> 00:03:34,360 Speaker 1: often where there have been declines going into that, and 69 00:03:34,400 --> 00:03:36,840 Speaker 1: then you see the complete opposite story in states like 70 00:03:36,880 --> 00:03:40,120 Speaker 1: New Jersey where they grew and really reversed a declining 71 00:03:40,160 --> 00:03:43,160 Speaker 1: trend for years after legalizing online gaming. 72 00:03:43,640 --> 00:03:44,200 Speaker 3: And it's also a. 73 00:03:44,200 --> 00:03:47,520 Speaker 1: Different property to property. I do understand though, why if 74 00:03:47,600 --> 00:03:50,560 Speaker 1: you're a company that has no I gaming play right now, 75 00:03:50,640 --> 00:03:53,120 Speaker 1: doesn't have an app, doesn't have a way to make 76 00:03:53,160 --> 00:03:55,400 Speaker 1: money off of it, that this wouldn't be seen as 77 00:03:55,480 --> 00:03:57,960 Speaker 1: any upside for you. And so naturally, you know, if 78 00:03:58,000 --> 00:04:00,880 Speaker 1: there's no upside there, there can only be downside. And 79 00:04:01,160 --> 00:04:04,000 Speaker 1: I do understand that. But I think the amount of 80 00:04:04,000 --> 00:04:07,320 Speaker 1: cannibalization and the downside has been greatly exaggerated, and we 81 00:04:07,360 --> 00:04:09,000 Speaker 1: need to do a good job, or a better job, 82 00:04:09,000 --> 00:04:11,800 Speaker 1: I should say, educating on that, because the numbers don't 83 00:04:11,840 --> 00:04:13,360 Speaker 1: necessarily support that story. 84 00:04:14,360 --> 00:04:17,760 Speaker 3: Jason Robbins, Draftking CEO, thanks so much for joining us today. 85 00:04:17,800 --> 00:04:18,480 Speaker 3: I appreciate it.