DraftKings (DKNG) CEO on Football Season, Prediction Markets & Profit Path

SPEAKER_1 (0:00)

Jason Robins, the CEO, co-founder of DraftKings is with me. I'm so glad you're back with us. Last time we spoke about your transition from a sports book into adding the prediction markets. We were talking about the NFL season having had a record. Now Citizen says another record for wagers. We're looking at 35 billion in wagers. So the NFL season is upon us. What does this mean for DraftKings?

Jason Robins (0:28)

Well, this is like our holiday season. It's the time of year where we acquire the most customers, we generate the most revenue over the fall, especially when all four major sports are going at the same time. So really a critical time of year for us, one that we see great numbers usually. And obviously very excited about this NFL season, especially with being able to offer our product, our new predictions product to so many customers in so many places that didn't have access to it before.

SPEAKER_1 (0:55)

So I know you were investing in AI for five years, before anybody was really talking about it on the daily. You've been doing this for some time and now you're investor day, you talk about the super app where you have the predictions and the sports book under one app. The predictions market may be busier or more lucrative or not?

Jason Robins (1:19)

Well, it's very early. It's hard to know. At this point, it's a very early stage of development of this new industry.

Our at least public estimates we put out there have the TAM being a little bit smaller for predictions, but that could change obviously. Our perspective on that, I should say, could change as we get more data and we're certainly excited about what we're seeing in the recent months, especially now with NFL season underway with growth in that area. So who knows? We'll have to see how it all plays out.

SPEAKER_1 (1:48)

Yeah, because I think about how this materializes for you. When we talked in the past, we talked about the millions of users that you had and how you were waiting to get the seven-digit range and many, many millions who may be on DraftKings. I mean, what kind of predictions do you have for yourself and how many millions of folks will be on your platform?

Jason Robins (2:12)

Well, we're hoping that we grow it from last year. Last year, we had, I think, around 12 million, I want to say, total active customers and we've been growing, especially now with all these new states open with predictions. So I expect we'll be able to beat that number, but don't have a public number. We're saying just, yeah, for how many active customers we expect.

SPEAKER_1 (2:34)

All right. So we'll wait and see. I mean, I know that it's big and it's growing.

State by state, some states allow the betting, some don't, but the predictions market at least expands that part of the story. You wanted to, at one point, some time ago, you had said you want to be viewed as not just in sports, but the hub of gambling and be a tech type company, and you want to be the best and offer the best products, and where do we stand in that kind of agenda that you had? Some of that was taken from a long time ago, and some of that was quite recent for what you said.

Jason Robins (3:11)

Well, I think we really established ourselves as the premier, at least in the US company in that regard. We have offerings across sports book predictions, online casino, lottery, fantasy sports, and others as well. So really, just so many different ways for customers to game and to get action on the sports and the things that they love to get action on, and we're always trying to innovate and add more as new things become available. Obviously, there's always a regulatory component to some of the products that we offer, but I think our goal is ultimately that customers view every product we have as the best out there, and they don't feel like they need to play on multiple apps because they can get all the things that they need from DraftKings.

SPEAKER_1 (3:55)

An all-in-one. I also think about how fragmented watching sports has become. You have to go to, and I know it's coming up, actually, for the NFL, how they'll be showing these games with Roger Goodell now still at the helm, and the Sunday games, the Sunday night games, and that kind of repackaging may happen. Are you sort of hoping one way or another on how people can view not only their favorite teams, but also their favorite players because they're doing fantasy? If you had Roger Goodell's ear, would you tell him something or suggest something?