Draft Kings' Investor Day Shows Optimistic Growth Forecast
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SportsTranscript
00:00 (upbeat music)
00:02 - Okay, DraftKings Investor Day happening now.
00:05 I'm starting to see some of the quotes coming out
00:07 from Jason Robbins.
00:09 It seems like a ton of optimism.
00:11 And I think if I'm not mistaken,
00:13 I think one of you guys over at Legal Sports Report
00:15 had a direct quote saying from Roberts
00:17 that this is the first time
00:19 that they feel they were genuinely being competitive
00:21 with their main competitor here in the industry.
00:24 I know that the numbers have shown
00:25 that they've actually moved ahead
00:27 in some of the markets as well.
00:29 - Yeah, there's a way to look at the numbers
00:33 and say that both DraftKings and FanDuel are leading,
00:35 depending on if you look at gross gaming revenue
00:38 or net gaming revenue.
00:39 So obviously, whichever one the company is leading,
00:42 they're gonna tell you
00:43 that's the most important statistic, right?
00:45 But the DraftKings Investor Day
00:47 has been very, very interesting.
00:50 And that's simply from me just looking at the slide deck.
00:53 Sam has been covering it.
00:55 Sam will be able to give you more.
00:57 But when I'm looking at the slide deck,
01:00 DraftKings is expecting way more business
01:03 than was expected at the beginning of US sports betting.
01:08 And they're really seeing a lot of growth
01:10 through their older states.
01:13 New Jersey is still growing terrifically.
01:17 I mean, terrifically.
01:19 And that's a state that has been live
01:22 with online gambling for 10 years now.
01:25 But that, you know, the iGaming stuff
01:27 really never started to kick off
01:29 until sports betting jumped on.
01:30 And it's just really amazing to go through
01:34 and see some of these projections.
01:37 DraftKings expects the high end
01:39 of the total addressable market by 2028
01:42 for online gambling to be 33 billion
01:46 for just the states that are live right now.
01:49 So that doesn't include Florida,
01:51 doesn't include Texas, doesn't include California.
01:53 Those are big numbers.
01:55 And it just shows how well DraftKings
02:00 has actually been building this business, Craig.
02:05 I mean, you go back and you look at some
02:09 of these older state launches
02:10 and they're just growing really well
02:13 while marketing and promotions are dropping.
02:16 And DraftKings investors obviously are,
02:21 were waiting today to see what they were going to say.
02:24 And the profit expectations over the next couple of years
02:28 are, they're aggressive, but maybe they're not aggressive
02:33 based on what DraftKings is saying
02:36 because there's just so much that they're still able to do.
02:40 You know, they show how they're growing
02:42 their profit, basically.
02:45 They show how they're growing their hold.
02:47 You know, hold is not something that is just based off
02:51 of who wins and who loses, right?
02:53 Hold is the amount that Sportsbook gets to keep
02:56 when it's all said and done.
02:57 But they can make that higher, right?
03:00 By introducing products that have a higher margin.
03:04 And that's what they've been doing.
03:06 And you see this in the growth.
03:08 So on the back of a great earnings call
03:11 from DraftKings earlier this month,
03:13 this is a really positive investor day.
03:16 One thing that we definitely are looking at here
03:20 is that DraftKings is launching progressive parlays.
03:23 And so basically you could bet up to 12 legs
03:27 and you can get paid out on what wins
03:29 and not be dinged on an entire parlay for something missing.
03:34 They haven't said a whole lot of this.
03:36 They haven't said when it's coming out.
03:39 Notably, this is a product that daily fantasy
03:42 sports operators like Underdog offer.
03:45 And so on the slide deck, it was a shot taken
03:49 by DraftKings that says regulated as sports betting.
03:52 So this is obviously something they're doing
03:54 to try to address what they think is a potential competitor
03:59 coming in and taking business from them.
04:02 So we're looking for more details on that as well.
04:05 What's the pricing difference gonna be like
04:07 for a parlay where all the legs have to win
04:10 compared to a parlay where they don't all have to win?
04:12 That's certainly something we wanna know.
04:15 (upbeat music)
04:17 (upbeat music)