DraftKings CEO, Co-founder, and Chairman, Jason Robins, discusses the the growth boosted by an influx of new customers, and its raising of guidance for the rest of the year with Bloomberg's Sonali Basak.
Bloomberg Audio Studios, podcasts, radio news. It's a winning year so far for DraftKings, the digital sports, entertainment and gaming company, raising its guidance for the rest of the year. The growth boosted by an influx of new customers. Its stock is now up nearly ten percent so far this year, and joining us now is Jason Robbins, Drafting CEO, chairman and co founder. You know, you have this report out the guidance being raised here, and I hate to do this to you, but you know, can you raise it even more given the new customers you're getting in. I mean, how much upside do you really see throughout the year and what could raise the bar for you?
Well, I think there's a lot of upside maining throughout the year. We have a number of different initiatives underway, and also customer acquisition keeps out performing what we expect. So really, I think the trend is good right now, and a lot of the initiatives we have planned for the back half of the year will be rolling out with the start of football season, and so I think we'll know a lot more then, but definitely feel like we have some good stuff planned on the product front and I definitely think there's some upside When you.
Think about the new customers being brought in, where are they coming from? And I guess how new what is the market potential here for you?
They're really coming across the board. Obviously, part of it is we launched two new states, North Carolina and Vermont and Q one. New states, you know, typically have a lot of pent up demand and we get a lot of new customers in the first few months. But even the oldest states we have, like New Jersey, continue to see new customers enter the market. So I think it's just a matter of where the industry's at right now. It's still very early. Even the oldest state, New Jersey, only launched about five and a half years ago, and so still just a lot of room to grow.
We're talking a little about the NFL season. What are your expectations there on how much that's going to draw to the platform.
Well, I think the NFL is like our holiday season. You know, it's the biggest time of year for us to acquire customers. We also make a lot of money then too, but you know NFL doesn't have a high frequency of game, so actually the spread between how much money you make off of NFL and NBA isn't maybe as big as you would think, but definitely from a customer acquisition, customer activation engagement standpoint, NFL is really the most important time of year, and typically the way that we orient our entire product calendar and everything else is around planning for what we want to do for NFL season and then working backwards.
Speaking of the NBA, what do you think about a potential NBA Amazon Media deal giving your work with Amazon already, Well, obviously.
We have a number of great media partners. Amazon's one of them, you know, and really would be exciting to see if they or any of our partners were able to increase their presence in a key sport like NBA. So we'll see what happens, and obviously we'll stay engaged and you know, look forward to partnering with you know, hopefully multiple companies in the space. Sounds like NBA might be thinking about doing at least three deals, maybe four, so could make for a really interesting landscape.
Well, speak about that landscape. Every additional media partner here, what does it translate to in terms of work for you?
Well, for us, really a lot of it is the same playbook. We obviously do a little bit different things with different partners, but we really try to optimize across the entire marketing portfolio. So when we figure out something that's working with one relationship, we'll typically try something similar if it's applicable with another. So we get great economies to scale that way in our marketing.
Are you seeing new types of customers You kind of talked about customers by state here, but are you seeing different demographics starting to come online thinking about betting more on different sports? Given for example, you saw all of the Taylor Swift fans start to watch football at a greater scale. You're seeing more interest in women's sports as well. What does this mean for you?
Well, we definitely see those things impact. I mean, the Taylor Swift impact was certainly a signific to get one during NFL season, and then you know Caitlin Clark and what she was able to do this year for women's college basketball is extraordinary and that drove interest really across all of women's basketball. While we were seeing that drive college basketball interest, we also have now seen people become more interested in the WNBA as well as other women's sports too. Women's sports in general are one of the fastest growing segments we have, and no doubt there's new demographics coming in.
You know, it's interesting for a business week recently, we kind of repurposed a story that had been about your presence over at Wrigley Field. Also curious about what baseball is going to be bringing you this year.
You know, baseball is a great sport because not only does it get a lot of customer engagement, there's a ton of games, and there's a ton of different things you can bet on. There's stoppages between each pitch, so lots of opportunity for people to bet in real time live betting. So I think baseball is a really well built sport for betting, and really looking forward to seeing and continued engagement that we've gotten off to a great start this year. I think baseball is also a sport that's really in the last year or two with you know, some of the things you know that have driven interest in the game. I think really that viewership lift is also translated over nicely to seeing some growth on our side as well.
Jason, when you think about the way Draft Kings is evolving moving forward into different sports and thinking about the way the media landscape is changing around sports. What is bigger for you moving forward, landing new media partnerships or even thinking about something more inquisitive.
In the future. You know, I think for us it's really not one thing. It's really a matter of, like you know, looking at lots of different opportunities and more about the individual opportunity itself than categorically m and as the answer, A big new partnership would be the answer. I think right now, we also feel like we're pretty good with what we have, so not to say we aren't always looking for ways to expand and do new deals, but we don't feel like we have to do anything right now. We feel like if we continue to just execute in the way we've been executing with the existing partnerships, in the geographies, in the product categories that we're in, we're going to do just fine. So you know, that really makes it so that we can have a high bar for any new opportunities we take on, and we don't take lightly the fact that there's an opportunity cost everything you do. It's not just a financial cost as well. Well.
What would be the bar for you then to do anything inquisitive at this point? What would you be looking for.
I think we just have to weigh it against the other ways we can allocate capital and allocate resources. You know, Jackpocket's a great example of that. We looked at what we thought that opportunity would look like, and I think it's stacked up quite favorably against similar metrics that we use to determine whether it's you know, organic investments we make or other forms of capital allocation. But that's really how we look at everything. As we have a return threshold that we would like to get on any capital and any resources that we deploy, and if that threshold is meant, we try to find a way to fund it obviously, you know, being that we can handle it from a resource and capacity standpoint, and then we compare it to constantly refine that threshold against where we think we're at in terms of the value of our equity and other sorts of uses of capital.
Jason, we have to leave it there. We thank you so much for joining us on a very busy earning season for you, that is. Jason Robbins of Draftings