Draftkings Inc at Craig-Hallum Online Gaming Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : So similar to the past years, these are topics specific. This year, we will be talking the current state of OSB in the US. So a lot going on with weekly volatility in sports outcomes to mix of parlays to taxes to competition, et cetera, et cetera, that we will get into here. But maybe to start, Jason, you detailed on your Q3 call and as we saw kind of in the state data and the outcomes, but rough start from a sports friendly October. But anything surprising any -- how did November turn out?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Yeah. And we all stare at or many of us stare at New York Weekly, just because it's a very important state, and they get weekly data. And it looks quite a bit smoother and normal as you get over the past five weeks. From those October winnings, anything changed from a player standpoint, better engagement? Are they returning those winnings back in a bigger, better way, but anything notable from that standpoint?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Maybe taking a step back, US market, the evolution here. We love to compare to the UK just because it was the biggest market prior to the US, and it's the oldest one that we can compare to. But we've seen technology, parlays, Bet Builder, a lot of those things, features just coming to those markets. How do you think the UK versus expectations, kind of how that evolved versus what you're seeing in the US?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : If you think about your biggest peers in the US have international thinking Flutter Entertain, but they have international business that have been around a long time that they've evolved those products to the US market. You guys are US born or US native and you've built this product for the US market. But can you compare and contrast kind if you think that's an advantage or potentially starting at a disadvantage given what they have?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Yeah. It's a good segue into the product side because you guys have made a lot of progress in the past couple of years, I think closing that gap, mainly with FanDuel and the kind of head start Flutter had. We've seen hold improved. You've narrowed that gap. They still have a lead there. One thing that comes up a lot is pricing. FanDuel has kind of best pricing and trading. I guess, how much of that delta between you and them, do you think really is the trading capabilities versus VIP mix is something that might be a little bit structurally different. But can you talk through kind of how your acquisitions, the SBTech the evolution there? And then what close is that gap between you and them?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : NBA, the highest hold. Good to hear that you say it's up to a fantastic start. And I agree the flywheel is just starting to accelerate here. One of the things that over the past couple of years the evolution is couple of years ago, maybe three, four years ago, when we did the first one of these Jason Robbins, it was you guys were talking about that flywheel and what was working for you. And then we had several dozen other sports books that all had, they were going to get 10% market share, that was seemingly the bogey that everybody thought they could get to. That's fizzled pretty quickly. How do you see the market evolving from here? It's very top heavy right now between the top two, there are several kind of competitors in that Tier 2 that have big ambitions. But how do you see kind of next several years? And maybe taking a step back three years ago to today, did it evolve as you thought it would from a market share standpoint -- competitive standpoint? And then how do you see the next couple of years?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : I agree. It's long been our thesis. There is a place for the Tier 2 if they run it and operate it appropriately and rationally. It can be strategic and (multiple speakers) --

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Sign-up bonuses acquire customers, and it's fantastic for doing that, but product to user experience, retain them, and you guys certainly are proving that out. Shifting over a little bit to Indian mix. Seems like a bigger focus now parlays, the past couple of years really getting the Same Game Parlay, the progressive parlays, a lot of innovation and feature enhancement there, which makes a lot of sense from the hold standpoint that it brings. But can you talk about in-game betting. How much of an important or I guess, focus at is now maybe versus where it was in the pipeline a couple of years ago? And then what are some of the future enhancements that can potentially be an accelerant to that.

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : It's a good point. As we all stare at hold and want to see that structurally keep moving higher as in game is slightly lower, but the velocity somewhat higher diversification of --

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Taxes, much more of a focus area. I think six, nine months ago than maybe it is today. You had Illinois that raised taxes. You've had several other states that have talked about it, but I haven't really come close to doing anything. Missouri, most recent state to legalize should come kind of mid to late next year live, but very reasonable low average 10% tax rate there. So I guess point I'm trying to make is that all states are pushing for the New York type 50%, 51% plus type tax rates. But what did you see from Missouri? And maybe where do you think the market goes? We know your thoughts generally on taxes and maintaining a reasonable balance taxes overall for all parties. But just any thoughts on Missouri and kind of breaking that trend?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : And to be clear, that is gaming taxes and cost of sales. So your EBITDA conversion to free cash flow is extremely good?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Media. So a bigger focus kind of these integrated media strategies. You guys acquired a few companies and started to push more towards that. But how do you think about media and the importance for online sports betting for a strategy and for a brand today maybe versus what you thought a couple of years ago and where you want to go with that?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Correct. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Last question, Jason, but what are you excited about as we head into 2025?

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : Sounds like Minnesota might even get over the finish line this year (multiple speakers) --

Question: Ryan Sigdahl - Craig-Hallum Capital Group LLC - Analyst : It's close. It sounds like we got there last minute last year, just a minute or two late. With that, we are on time. Jason, very much appreciate the time today. Thank you, everyone, for joining.