WEBVTT 00:00:00.000 --> 00:00:05.120 align:middle line:90% 00:00:05.120 --> 00:00:07.250 align:middle line:84% ADAM SHAPIRO: To DraftKings because they were 00:00:07.250 --> 00:00:10.720 align:middle line:84% out with their earnings earlier, and there were-- 00:00:10.720 --> 00:00:11.960 align:middle line:90% there's a lot to digest here. 00:00:11.960 --> 00:00:15.410 align:middle line:84% There was a loss, $161.4 million, 00:00:15.410 --> 00:00:18.170 align:middle line:84% but revenue coming in at more than 74 million, 00:00:18.170 --> 00:00:21.200 align:middle line:84% despite what's going on with the limited sports calendar. 00:00:21.200 --> 00:00:23.840 align:middle line:84% So we welcome into the stream right now 00:00:23.840 --> 00:00:26.720 align:middle line:90% DraftKings CEO Jason Robins. 00:00:26.720 --> 00:00:27.810 align:middle line:90% Good to have you here. 00:00:27.810 --> 00:00:30.150 align:middle line:84% What do you want sports fans to know about where we're headed 00:00:30.150 --> 00:00:31.777 align:middle line:90% and where you're headed? 00:00:31.777 --> 00:00:33.410 align:middle line:84% JASON ROBINS: Well, first of all, on the numbers, 00:00:33.410 --> 00:00:38.180 align:middle line:84% we were very happy that we had a very strong revenue quarter. 00:00:38.180 --> 00:00:40.340 align:middle line:84% Ended up handily beating consensus 00:00:40.340 --> 00:00:42.710 align:middle line:84% and at the top end of our guidance. 00:00:42.710 --> 00:00:46.100 align:middle line:84% On the losses side, I think it's important for people 00:00:46.100 --> 00:00:49.040 align:middle line:84% to remember that we had a transaction to go public 00:00:49.040 --> 00:00:52.190 align:middle line:84% that we closed in Q2, and majority of those losses 00:00:52.190 --> 00:00:54.680 align:middle line:84% are related to one-time transaction expenses 00:00:54.680 --> 00:00:57.320 align:middle line:90% as well as non-cash accruals. 00:00:57.320 --> 00:00:59.510 align:middle line:84% If you look at our adjusted EBITDA, which 00:00:59.510 --> 00:01:02.510 align:middle line:84% is more of a true reflection of the performance of the company, 00:01:02.510 --> 00:01:04.110 align:middle line:84% it's actually right on consensus. 00:01:04.110 --> 00:01:05.900 align:middle line:84% So I just wanted to make that note. 00:01:05.900 --> 00:01:07.700 align:middle line:84% As far as, you know, what fans should expect, 00:01:07.700 --> 00:01:11.420 align:middle line:84% we have a really, really exciting calendar of promotions 00:01:11.420 --> 00:01:14.510 align:middle line:84% and other sorts of events that we're putting on to celebrate, 00:01:14.510 --> 00:01:18.380 align:middle line:84% you know, both the return that's happening now of Major League 00:01:18.380 --> 00:01:22.400 align:middle line:84% Baseball, NBA, NHL, to continue to, you know, 00:01:22.400 --> 00:01:24.860 align:middle line:84% promote the golf tournaments that the PGA 00:01:24.860 --> 00:01:25.913 align:middle line:90% TOUR and others are putting on. 00:01:25.913 --> 00:01:27.080 align:middle line:84% We're very excited that we're going 00:01:27.080 --> 00:01:28.880 align:middle line:90% to have the Masters this fall. 00:01:28.880 --> 00:01:30.530 align:middle line:84% And then, of course, most importantly, 00:01:30.530 --> 00:01:32.420 align:middle line:90% the start of the NFL season. 00:01:32.420 --> 00:01:34.700 align:middle line:84% We have $100 million that we are giving 00:01:34.700 --> 00:01:37.010 align:middle line:90% away to start the NFL season. 00:01:37.010 --> 00:01:39.800 align:middle line:84% All you have to do is go enter a free to play, completely 00:01:39.800 --> 00:01:42.110 align:middle line:84% free to play, survivor contest for week 1, 00:01:42.110 --> 00:01:44.330 align:middle line:84% and you will unlock your gift, which is 00:01:44.330 --> 00:01:46.130 align:middle line:90% anywhere from 5,000 to 25,000. 00:01:46.130 --> 00:01:49.100 align:middle line:84% And then we will have one lucky customer who wins a million 00:01:49.100 --> 00:01:50.960 align:middle line:84% simply by entering that free contest. 00:01:50.960 --> 00:01:53.180 align:middle line:84% So very excited to be doing that, 00:01:53.180 --> 00:01:56.870 align:middle line:84% and looking forward to giving away that $100 million. 00:01:56.870 --> 00:01:58.230 align:middle line:84% DAN ROBERTS: Jason, Dan Roberts here. 00:01:58.230 --> 00:01:59.097 align:middle line:90% Thanks for coming back on. 00:01:59.097 --> 00:01:59.897 align:middle line:90% JASON ROBINS: Hey, Dan. 00:01:59.897 --> 00:02:01.397 align:middle line:84% DAN ROBERTS: You talked about how excited you 00:02:01.397 --> 00:02:02.460 align:middle line:90% guys are for the NFL season. 00:02:02.460 --> 00:02:04.420 align:middle line:84% That's always so important for you. 00:02:04.420 --> 00:02:07.180 align:middle line:84% But we are following closely the mess in college football. 00:02:07.180 --> 00:02:09.990 align:middle line:84% And obviously, a little bit of a different scenario there. 00:02:09.990 --> 00:02:12.630 align:middle line:84% But what if there isn't an NFL season? 00:02:12.630 --> 00:02:14.850 align:middle line:84% How bad would that be for you guys? 00:02:14.850 --> 00:02:16.570 align:middle line:84% How would you go about weathering that? 00:02:16.570 --> 00:02:17.670 align:middle line:84% JASON ROBINS: Well, certainly, it 00:02:17.670 --> 00:02:20.010 align:middle line:84% would have a short-term impact to our revenues, 00:02:20.010 --> 00:02:23.550 align:middle line:84% but, you know, we have over $1.2 billion of cash 00:02:23.550 --> 00:02:24.810 align:middle line:90% on the balance sheet. 00:02:24.810 --> 00:02:28.020 align:middle line:84% In some ways, it's actually, you know, helpful to us 00:02:28.020 --> 00:02:31.140 align:middle line:84% if maybe some of the lesser capitalized competition that 00:02:31.140 --> 00:02:32.880 align:middle line:84% won't be able to weather it as well have 00:02:32.880 --> 00:02:35.040 align:middle line:84% to go through something like that while we are. 00:02:35.040 --> 00:02:36.570 align:middle line:84% Obviously, we don't hope for that. 00:02:36.570 --> 00:02:39.390 align:middle line:84% We-- we want to see the NFL season occur and get 00:02:39.390 --> 00:02:40.350 align:middle line:90% played as planned. 00:02:40.350 --> 00:02:43.680 align:middle line:84% And actually, I think given, you know, how much effort I know 00:02:43.680 --> 00:02:46.290 align:middle line:84% has been put in by so many smart people at the NFL, 00:02:46.290 --> 00:02:48.210 align:middle line:84% and they've had their whole offseason really to plan 00:02:48.210 --> 00:02:50.040 align:middle line:84% for this, that, you know, we feel pretty 00:02:50.040 --> 00:02:51.990 align:middle line:84% good that the-- the right plans and safety 00:02:51.990 --> 00:02:54.207 align:middle line:90% measures are in place. 00:02:54.207 --> 00:02:56.040 align:middle line:84% But we'll kind of roll with whatever is thrown our way. 00:02:56.040 --> 00:02:58.020 align:middle line:84% Obviously, we, you know, are hoping for NFL 00:02:58.020 --> 00:03:00.580 align:middle line:84% and think it could lead to really huge numbers for us. 00:03:00.580 --> 00:03:02.700 align:middle line:84% But if it doesn't happen, then doesn't change 00:03:02.700 --> 00:03:05.160 align:middle line:84% anything about our long-term perspective 00:03:05.160 --> 00:03:07.540 align:middle line:84% and confidence and conviction in this market 00:03:07.540 --> 00:03:10.170 align:middle line:84% and what we're going to see over the next several years, not 00:03:10.170 --> 00:03:11.625 align:middle line:90% the next several months. 00:03:11.625 --> 00:03:13.410 align:middle line:84% DAN ROBERTS: And-- and then while we have you, 00:03:13.410 --> 00:03:16.530 align:middle line:84% got to get your-- your take on this story about the IRS 00:03:16.530 --> 00:03:19.770 align:middle line:84% wanting to tax fantasy fees that you guys rake. 00:03:19.770 --> 00:03:23.090 align:middle line:84% And interestingly, it sounds like the IRS wants to brand 00:03:23.090 --> 00:03:25.040 align:middle line:90% those or label those as wagers. 00:03:25.040 --> 00:03:26.640 align:middle line:84% I saw somewhere that-- that you said you believe 00:03:26.640 --> 00:03:27.893 align:middle line:90% their analysis is flawed. 00:03:27.893 --> 00:03:29.160 align:middle line:84% What-- what's the story there, and how 00:03:29.160 --> 00:03:30.247 align:middle line:90% are you guys going to respond? 00:03:30.247 --> 00:03:31.480 align:middle line:84% JASON ROBINS: Well, you know, listen, 00:03:31.480 --> 00:03:33.630 align:middle line:84% this isn't the first time that, you know, 00:03:33.630 --> 00:03:35.250 align:middle line:84% there's been in education process 00:03:35.250 --> 00:03:38.040 align:middle line:84% to help sort of explain, you know, 00:03:38.040 --> 00:03:39.420 align:middle line:84% the skill-based nature of the game 00:03:39.420 --> 00:03:43.020 align:middle line:84% and why DFS entry fees are distinct from wagers. 00:03:43.020 --> 00:03:45.540 align:middle line:84% And we do believe that, you know, 00:03:45.540 --> 00:03:48.480 align:middle line:84% upon sort of embarking on that education process, 00:03:48.480 --> 00:03:50.100 align:middle line:90% that it will become clear. 00:03:50.100 --> 00:03:51.750 align:middle line:84% And, you know, this is an issue, as you know, 00:03:51.750 --> 00:03:55.440 align:middle line:84% Dan, that's been, you know, for dozens and dozens of state 00:03:55.440 --> 00:03:57.360 align:middle line:84% legislatures and courts around the country, 00:03:57.360 --> 00:03:59.610 align:middle line:84% already considered over the past several years, 00:03:59.610 --> 00:04:01.500 align:middle line:84% and, you know, almost unanimously 00:04:01.500 --> 00:04:04.350 align:middle line:84% have come out on the side that DFS is clearly not wagering. 00:04:04.350 --> 00:04:05.610 align:middle line:90% It is clearly skill-based. 00:04:05.610 --> 00:04:09.000 align:middle line:84% So we feel pretty good in that position. 00:04:09.000 --> 00:04:11.280 align:middle line:84% And we think that given the time and opportunity 00:04:11.280 --> 00:04:13.200 align:middle line:84% to explain and educate, that, you know, 00:04:13.200 --> 00:04:14.580 align:middle line:90% others will see it the same way. 00:04:14.580 --> 00:04:17.410 align:middle line:84% And, you know, it's really all part of the process. 00:04:17.410 --> 00:04:19.589 align:middle line:84% So we're looking forward to having an opportunity 00:04:19.589 --> 00:04:22.590 align:middle line:84% to-- to make that argument, and we believe the facts and data 00:04:22.590 --> 00:04:25.120 align:middle line:90% are pretty strongly supported. 00:04:25.120 --> 00:04:27.180 align:middle line:84% JULIE HYMAN: Hey, Jason, it's Julie here. 00:04:27.180 --> 00:04:29.810 align:middle line:84% I want to go back to the issue of what sports are being played 00:04:29.810 --> 00:04:33.950 align:middle line:84% and what sports are not and what might happen in the fall. 00:04:33.950 --> 00:04:36.080 align:middle line:84% Let's say the NFL season starts as normal. 00:04:36.080 --> 00:04:37.250 align:middle line:90% Everything's fine. 00:04:37.250 --> 00:04:38.850 align:middle line:84% And then people start getting sick, 00:04:38.850 --> 00:04:41.300 align:middle line:84% and they have to start canceling games. 00:04:41.300 --> 00:04:45.770 align:middle line:84% What happens to tournaments when all of a sudden you're in it, 00:04:45.770 --> 00:04:48.020 align:middle line:84% and then games start getting canceled, 00:04:48.020 --> 00:04:51.290 align:middle line:84% or maybe the whole season gets canceled? 00:04:51.290 --> 00:04:53.750 align:middle line:84% JASON ROBINS: Well, one of the nice things about daily fantasy 00:04:53.750 --> 00:04:56.480 align:middle line:84% sports is that, you know, the games last a day, 00:04:56.480 --> 00:04:58.850 align:middle line:84% or in the case of NFL, sometimes a weekend. 00:04:58.850 --> 00:05:02.810 align:middle line:84% But that allows us to be very fluid in the contests 00:05:02.810 --> 00:05:05.570 align:middle line:84% we post, and we can react to those things, you know, 00:05:05.570 --> 00:05:07.400 align:middle line:90% as more news would come out. 00:05:07.400 --> 00:05:09.470 align:middle line:84% Obviously, we all hope that that doesn't happen 00:05:09.470 --> 00:05:12.470 align:middle line:84% and that there, you know, are no cancellations or postponements. 00:05:12.470 --> 00:05:16.340 align:middle line:84% And as I mentioned, I do believe that a lot of very smart people 00:05:16.340 --> 00:05:18.860 align:middle line:84% at the NFL have put a lot of time and effort 00:05:18.860 --> 00:05:20.510 align:middle line:84% into making sure that there are safe 00:05:20.510 --> 00:05:23.060 align:middle line:84% and secure ways to play this season, 00:05:23.060 --> 00:05:24.140 align:middle line:90% but we're prepared either way. 00:05:24.140 --> 00:05:26.660 align:middle line:84% And the nature of our product being daily fantasy sports 00:05:26.660 --> 00:05:29.390 align:middle line:84% and betting, you know, really allows us 00:05:29.390 --> 00:05:32.660 align:middle line:84% to, unlike a season-long fantasy sports product, 00:05:32.660 --> 00:05:35.150 align:middle line:84% really allows us to sort of react game to game, week 00:05:35.150 --> 00:05:37.460 align:middle line:90% to week, to what's happening. 00:05:37.460 --> 00:05:39.970 align:middle line:84% DAN ROBERTS: Jason, let's end by talking about competition. 00:05:39.970 --> 00:05:42.125 align:middle line:84% You know, the whole gaming space has really, really grown 00:05:42.125 --> 00:05:43.190 align:middle line:90% in-- in the last few months. 00:05:43.190 --> 00:05:45.410 align:middle line:84% Interestingly, a lot of those gaming stocks, 00:05:45.410 --> 00:05:48.200 align:middle line:84% including you guys after you became public, Penn Gaming, 00:05:48.200 --> 00:05:50.930 align:middle line:84% which now owns a majority of Barstool Sports, you know, 00:05:50.930 --> 00:05:52.970 align:middle line:84% Flutter, the company that owns Fanduel, a lot of those gaming 00:05:52.970 --> 00:05:57.010 align:middle line:84% stocks did very well even while there were not sports going on. 00:05:57.010 --> 00:05:58.310 align:middle line:84% And just yesterday on one of our shows, 00:05:58.310 --> 00:06:01.970 align:middle line:84% we were discussing an upgrade to Penn Gaming on the basis-- 00:06:01.970 --> 00:06:04.640 align:middle line:84% this is, of course, just based on one bank's analysis-- 00:06:04.640 --> 00:06:07.430 align:middle line:84% that Barstool Sports could start offering betting products. 00:06:07.430 --> 00:06:09.560 align:middle line:84% Where do you stand on sort of the competition outlook 00:06:09.560 --> 00:06:10.400 align:middle line:90% right now? 00:06:10.400 --> 00:06:11.420 align:middle line:90% Is that an issue for you guys? 00:06:11.420 --> 00:06:14.040 align:middle line:84% Are they now a competitor for you guys, Barstool, 00:06:14.040 --> 00:06:16.240 align:middle line:84% simply because of the Penn Gaming connection? 00:06:16.240 --> 00:06:18.260 align:middle line:90% And along with all that, is-- 00:06:18.260 --> 00:06:20.480 align:middle line:84% is the betting now a bigger part of your business 00:06:20.480 --> 00:06:24.900 align:middle line:84% revenue-wise than fantasy, or is fantasy still the bulk for now? 00:06:24.900 --> 00:06:26.690 align:middle line:84% JASON ROBINS: So first of all, we're 00:06:26.690 --> 00:06:29.750 align:middle line:84% extremely excited that there's been so much focus 00:06:29.750 --> 00:06:31.160 align:middle line:90% from so many great companies. 00:06:31.160 --> 00:06:33.800 align:middle line:84% Penn and Barstool have very smart management teams. 00:06:33.800 --> 00:06:37.520 align:middle line:84% And the fact that they, along with IAC and others, 00:06:37.520 --> 00:06:39.800 align:middle line:84% have so much faith and conviction that this is 00:06:39.800 --> 00:06:42.650 align:middle line:84% an industry that will develop into a multibillion dollar 00:06:42.650 --> 00:06:44.990 align:middle line:84% opportunity, that excites us, and it helps 00:06:44.990 --> 00:06:47.240 align:middle line:90% validate, you know, the-- 00:06:47.240 --> 00:06:49.950 align:middle line:90% the hypothesis that we had. 00:06:49.950 --> 00:06:52.700 align:middle line:84% We also think that having more and more, you know, 00:06:52.700 --> 00:06:57.320 align:middle line:84% well-capitalized influential partners that 00:06:57.320 --> 00:07:01.100 align:middle line:84% are interested in seeing more states adopt online sports 00:07:01.100 --> 00:07:03.780 align:middle line:84% betting and potentially iGaming is a very good thing for us, 00:07:03.780 --> 00:07:06.170 align:middle line:84% and that, more than anything, is going to drive 00:07:06.170 --> 00:07:07.670 align:middle line:90% our growth opportunity. 00:07:07.670 --> 00:07:10.370 align:middle line:84% As far as right now, we do not disclose revenues 00:07:10.370 --> 00:07:12.830 align:middle line:84% by different products, so, you know, 00:07:12.830 --> 00:07:15.140 align:middle line:84% can't really comment on relative size. 00:07:15.140 --> 00:07:17.990 align:middle line:84% But I think the last time we spoke about it last quarter, 00:07:17.990 --> 00:07:20.960 align:middle line:84% I did mention that daily fantasy sports was still the largest 00:07:20.960 --> 00:07:21.890 align:middle line:90% part of our business. 00:07:21.890 --> 00:07:24.890 align:middle line:84% And as you can imagine with COVID, 00:07:24.890 --> 00:07:28.190 align:middle line:84% it's kind of hard to say whether that has or hasn't changed 00:07:28.190 --> 00:07:30.830 align:middle line:84% since, you know, the whole environment in sports 00:07:30.830 --> 00:07:34.250 align:middle line:84% is kind of getting back to a more steady, stayed position. 00:07:34.250 --> 00:07:37.030 align:middle line:84% But, you know, daily fantasy sports is our core. 00:07:37.030 --> 00:07:39.140 align:middle line:84% It's where most customers around the nation 00:07:39.140 --> 00:07:41.180 align:middle line:84% continue to engage with us, and it's 00:07:41.180 --> 00:07:42.940 align:middle line:84% a product we're going to continue to invest in 00:07:42.940 --> 00:07:46.030 align:middle line:84% and are excited about growing over the years. 00:07:46.030 --> 00:07:50.000 align:middle line:90%