Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Drafting CEO Jason Robbins delighted, say joins us. There has
Speaker 2: been some let's say, back of the Napkin math, and
Speaker 2: people look at the revenue forecast being lowered by about
Speaker 2: two hundred million dollars. Right, Bear with me, Jason, Is
Speaker 2: that exactly how much DraftKings lost on March Madness? The
Speaker 2: two hundred million dollar figure.
Speaker 1: No, we actually put out the numbers. We have a
Speaker 1: bridge in our earnings materials. It was a little bit less,
Speaker 1: but overall it's not too far off.
Speaker 3: Okay, talk to us a little bit about what's too
Speaker 3: far off as well? What else is driving perhaps an
Speaker 3: expected downgrade in full year guidance. Analysts seem to be
Speaker 3: taking this well on the chim as our investors, but
Speaker 3: the regulatory environment as well. How much you haven't in
Speaker 3: you once for that?
Speaker 1: Well, what we we put this out there. We had
Speaker 1: about one hundred and seventy million from sport outcomes, and
Speaker 1: then thirty million came from Jack Pocket being caused to
Speaker 1: not be operating anymore in Texas. But then the overall
Speaker 1: fundamentals of the business were actually very strong. We saw
Speaker 1: increased to structural hold rate, our promotional efficiency increase, so
Speaker 1: some of those things offset as well. So really the
Speaker 1: fundamentals of the business are about as healthy as can be.
Speaker 1: And I think the real question is will all these
Speaker 1: sport outcomes turn around in two quarters in a row now?
Speaker 1: But obviously that happens, and that's part of the greatness
Speaker 1: of the product is that customers can win, and they
Speaker 1: can go on winning streaks like this, and it makes
Speaker 1: it a lot of fun, obviously, And you know, we'll
Speaker 1: see it was the first time and I think second
Speaker 1: time ever there were all four number one seeds in
Speaker 1: the final four. Only the first time ever that that
Speaker 1: happened with also all twos in one three seed in
Speaker 1: the Elite eight, So you never know. Maybe there will
Speaker 1: be another year like that, but probably not. It was
Speaker 1: more likely an anomaly. And you know NBA playoffs already
Speaker 1: have had a bunch of upsets, so it tends to
Speaker 1: kind of swing around the other way over time.
Speaker 3: Ah, too much consistency. But what also is consistent, Jason,
Speaker 3: is what a massive jump in your monthly active use is.
Speaker 3: When you talk about the jackpot in particular, and I'm
Speaker 3: interested in how jackpocket is transferring to other sports casino
Speaker 3: games and the likes or are people sticking to that
Speaker 3: lottery application.
Speaker 1: Well, Jackpocket is still very early in its growth. It's
Speaker 1: still quite nascent, so we believe there's a ton of
Speaker 1: upside for that business and we're excited about it. We
Speaker 1: haven't fully integrated it into the DraftKings app yet, we
Speaker 1: haven't put it on our platform yet, which should dramatically
Speaker 1: increase both the conversion metrics and also the cross sellability
Speaker 1: and marketing ability. And the cross sells already well above
Speaker 1: our expectations, so we think there's even more upside there,
Speaker 1: so we're pretty excited about it. We think there's a
Speaker 1: lot of growth potential, but it's still small, so the
Speaker 1: overall impact on the business isn't great yet, but hopefully
Speaker 1: that changes as jack Pocket continues to grow.
Speaker 2: Jason, in your industry, there are big almost legacy names
Speaker 2: Las Vegas Sands, for example, that are pulling out of
Speaker 2: bids for land based casinos, and I wonder how much
Speaker 2: you can assess their nervousness that online gambling just cannibalizes
Speaker 2: demand for land base and how that impacts you.
Speaker 1: Well, it's certainly a perception that we have to fight
Speaker 1: because it's out there. I do think that the facts
Speaker 1: are very mixed on that. While there's certainly some examples
Speaker 1: you can point to where there's been you know, diminishing
Speaker 1: markets where they've had online gaming, it's also, you know,
Speaker 1: often where there have been declines going into that, and
Speaker 1: then you see the complete opposite story in states like
Speaker 1: New Jersey where they grew and really reversed a declining
Speaker 1: trend for years after legalizing online gaming.
Speaker 3: And it's also a.
Speaker 1: Different property to property. I do understand though, why if
Speaker 1: you're a company that has no I gaming play right now,
Speaker 1: doesn't have an app, doesn't have a way to make
Speaker 1: money off of it, that this wouldn't be seen as
Speaker 1: any upside for you. And so naturally, you know, if
Speaker 1: there's no upside there, there can only be downside. And
Speaker 1: I do understand that. But I think the amount of
Speaker 1: cannibalization and the downside has been greatly exaggerated, and we
Speaker 1: need to do a good job, or a better job,
Speaker 1: I should say, educating on that, because the numbers don't
Speaker 1: necessarily support that story.
Speaker 3: Jason Robbins, Draftking CEO, thanks so much for joining us today.
Speaker 3: I appreciate it.