Rovell: Q&A With DraftKings CEO Amid 2-Year High Stock Price

Rovell: Q&A With DraftKings CEO Amid 2-Year High Stock Price article feature image

Icon Sportswire/Getty. Pictured: DraftKings logo on towel.

DraftKings has had a hell of a year so far. It's now the No. 1 sports betting company in the U.S., according to Eilers, beating out FanDuel.

And the company's stock is on fire. Following another big earnings report Thursday night, the stock, which is up nearly 200% this year, is set to hit a two-year high on Friday — with shares up more than 15% on the day.

We sat down with longtime DraftKings CEO Jason Robins to discuss the present and the future..

Darren Rovell: So, you are now No. 1 in US market share in sports betting. Is that what your internal data shows?

Jason Robins: We think Eilers has proven to be pretty accurate over time. We feel good, but it's not like we are over here spending time celebrating.

Darren: You've definitely tightened your spending over time and investors seem to be happy…

Jason: I think we've consistently demonstrated results to shareholders. In two years time, we turned around our bottom line quickly and we haven't even seen what iGaming can do yet. We've de-risked a lot of prior concerns and demonstrated we can execute in any environment and if more states come on line, this market can get two to three times bigger.

Darren: You have cash on hand now, are you going to spend?

Jason: We have more than $1.2 billion in cash. If there are opportunities, we will look at them, but we plan on staying disciplined. What's interesting is our acquisition of Golden Nugget really hasn't taken hold yet. We haven't migrated over and we've only got into one more state (Pennsylvania) in iGaming. But when you have cash, you are in a strong position and we're hoping to do what will get the most return for shareholders, whether it's buy backs or dividends or acquiring as there is more consolidation.

Darren: There are always predictions about a downturn. How much are you worried about the overall macroeconomy?

Jason: Gaming has held up well in downturns, but we feel like consumer sentiment is strong right now. The truth is that we probably wouldn't know if we were down. If you look at a mature market like Western Europe, sure, they would know if they were down 5 to 10%. But it would be hard to know for us because the industry is going so fast.

Darren: ESPN and Fanatics are currently fighting over fifth place in the online sports betting space. How concerned are you about those players?

Jason: Well, I do think ESPN can bring people into the market that weren't here before. At the same time, I do think it's going to be hard for anyone who comes in that late to take people away from the sites they use which they are so loyal to. Can they grow the market? Yes, but I also think those with the best product over time will win.

Darren: Will you still advertise with ESPN?

Jason: As long as they take our ads, we will buy them. But it's not a huge part of our marketing budget. Our spend with them is in the low- to mid-single digits of what we spend on customer acquisition so it wouldn't have a major impact if we moved away.

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