DraftKings CEO Jason Robins Talks World Cup Customer Retention

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Ed Ludlow** (0:08)
Okay, ending the week with more tech earnings. DraftKings reported disappointing second quarter earnings amidst growing competition from new prediction market players like Caoshi. But there's some post-momentum, post-World Cup, which is setting up a pretty strong back half. Stock up 7.5% on track for its best day since June 26 DraftKings CEO and co-founder Jason Robins joins us. It's interesting, right? Initially, that was the reaction. Disappointment, second quarter earnings. There were favorable sports outcomes. There was promotional spending. And then this morning, everyone was like, actually, you know what? The World Cup seems to have some tailwind with it.

**Jason Robins** (0:45)
Well, I think that really what you're seeing is that after having a little time to digest and hear some of the context, people understand how strong a position DraftKings is in from a business perspective right now. Our core business is on track to do about a billion dollars in adjusted EBITDA this year. You know, just a few years ago, we were losing money in that business. Now it's a very strong cash flow generator for us.
And we see really strong traction on predictions, enormous growth over the last month or two. And the best time of year is about to come with, you know, The fall season and NFL and everything that that brings.

**Ed Ludlow** (1:20)
Okay, bear with me, but apparently people were betting on whether you would say Cauchy on the earnings call, prediction markets are a factor. Just react to that, Jason, please.

**Jason Robins** (1:32)
Well, I, you know, making trades on whether someone is gonna say Jason Manor Earnings Call probably isn't something that I think should be out there in my opinion, but nevertheless, I understand it is. I didn't know that though, I didn't read it. I don't remember, I don't think I said that, so.
No, hopefully not too many people took the positive side of that one.

**Ed Ludlow** (1:56)
Jason, can you just explain the World Cup, How it manifested for DraftKings, the behavior of people that went to DraftKings during it, and whether there is some momentum carried out of it for the second half of this year.

**Jason Robins** (2:12)
I mean, World Cup on pretty much every metric that we look at exceeded our expectations. We acquired more customers. That was both true of predictions, So, we had a really strong increase in Mupps, as we published in our report. Also saw a really strong post-World Cup engagement, probably the most exciting thing to me, because a lot of people are probably thinking, us included, this World Cup audience, are they going to stick around, or is it sort of come better?
And we're also excited about the fact that we have a lot of people that are interested in us, and we're also excited about the fact that World Cup audience, are they gonna stick around, or is it sort of come, you know, bet on the World Cup, trade on the World Cup and done? Not at all the case. July, we actually saw a 20% handle increase after the World Cup ended, which is an enormous number compared to where we were going into it. So you're absolutely right, I think a lot of momentum coming out of the World Cup, right going into our most important time of year, so it couldn't have been time better.

**Ed Ludlow** (3:10)
And Jason, very quickly, those were people that went to DraftKings maybe for the first time In the World Cup and then stayed?

**Jason Robins** (3:17)
A lot of them were, a lot of them were people that had played previously and activated and continued to play afterwards. Remember, after NFL ends, sometimes a lot of customers go dormant, so these big moments are really great opportunities to get people to engage with the product again. And you never know if they're gonna drop off or not. We see that sometimes, or if they're gonna continue. And at least for the World Cup audience, it seems like both the new customers and the ones who reactivated are all continuing to play through July. And I think coming into August and September, when we have our most busy time of year, it's going to only continue.

**Ed Ludlow** (3:50)
Jason, in prediction markets, the field of players seem very focused on how they communicate with the under 21 category. What is DraftKings' policy and approach, basically to marketing, to that demographic quickly?

**Jason Robins** (4:06)
Well, I think this is an important distinction between DraftKings and some of these other companies out there. We are not, as you see some of them doing, marketing that you can pay your rent money in marketing to college campuses on fraternities and things like that. We are focusing on marketing to adults and positioning this as an entertainment product, which I think is the right way to do it.