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DraftKings CEO on sports betting: ‘We’re seeing huge numbers across the board'

DraftKings CEO Jason Robins joins The Final Round panel discuss the return of professional sports during the COVID-19 pandemic and what it means for the sports betting industry.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round." The NFL season kicking off last night with the Kansas City Chiefs taking on the Houston Texans. So as we gear up for the rest of week one this weekend, let's talk a little bit more about sports betting. And for that, we have Jason Robins, the CEO of DraftKings. We also have Dan Roberts joining in on the conversation.

And Jason, the last-- I know you were last on Yahoo Finance a couple weeks ago. You were talking about the excitement, the buildup of the NFL season. When you take a look at some of the numbers this year, obviously, sports betting has been very strong. There's been lots of demand. So what has activity been like on DraftKings this week, and what does interest look like as we head into the weekend?

JASON ROBINS: Right now, we're just seeing, you know, huge numbers across the board. Virtually every metric is way up year over year. We had a big promotion to kick off last night where we gave the Chiefs 101 points. So you know, it was pretty much a no-brainer.

And then we have a great promotion going into Sunday, very different. It's a free survivor pool that you can enter. And if you just simply enter-- you don't even have to win anything-- you get entered into a drawing for $1 million. And everybody who enters gets a free gift, ranging from $5 to $25,000. So lots of reasons just to enter and then whoever wins will also get $1 million. And it's totally free to enter. All you gotta do is go sign up and jump in the contest.

So we think that'll be really big for us this Sunday. And you know, so far, what we're seeing across all sports-- the NFL kickoff was no different-- is this extraordinary amount of pent-up demand. And just, you know, really everything kind of across the board, you know, is growing right now.

DAN ROBERTS: Jason, Dan Roberts here. Your deal with the NFL is strictly as the official DFS partner, as I understand. It does not cover the legal betting part of your business. Of course, that business is growing quickly. You're also advertising that business.

And I just wrote about this this week, but the NFL has made a number of partnerships casinos now. It's letting individual teams make partnerships with casinos. But it's been careful to say, well, they're just marketing deals for now. They don't involve betting. Tell us a little bit more about that, and when do you see that changing? Because of course, I imagine you would love to be partnered up with the league on an official league level for the betting part of the business, too.

JASON ROBINS: Well, I can't really speak for the league on what their thoughts around timing and, you know, how they would approach it. But certainly if and when the league decided that they would like to have a partner in the sports betting category, we'd be thrilled to do that with them. And you know, hopefully that's something that will happen in the not-too-distant future, but I can't really speak for them as to what timing or thinking around that might be.

DAN ROBERTS: And then to play off that, you know, there was interesting data from the AGA out-- American Gaming Association-- and it was suggesting about a week ago that a smaller number of overall Americans plan to bet on the NFL this year, just interesting. You know, it might suggest that maybe the pandemic has muted the excitement a little bit. As you guys look to grow the legal sports book business in all the states that have legalized, what are you seeing with trends there, in terms of how bettors are watching the season?

JASON ROBINS: I mean, the numbers we're seeing are not consistent with that kind of thing. I mean, we're seeing everything go up, and we're seeing record engagement levels. Yesterday was a historic night for us. So you know, it's really-- a lot of it is just underlying growth of the market, so hard to know when they're surveying. I'm sure there's a lot of illegal betting that was captured in there, and it's hard to know if, overall, that's up or down since we don't, obviously, have any access to that sort of data.

But you know, just from our standpoint, everything is way up, and it's not just because we've entered new states. Even in the existing states we were in at the start of last NFL season, like New Jersey and West Virginia, we've seen enormous year-over-year growth in those markets as well. So certainly, from our perspective, it seems like more people are betting on the NFL than ever this year.

BRIAN CHEUNG: Hey, Jason, it's Brian Cheung here. I was betting on sports for the first time as I went back to New Jersey recently, on the NBA. And it seems like there's been a lot of promos going on.

Speak to me a little bit about the competitive environment right now when we talk about PointsBet versus Bovada. All these apps are offering very similar types of deals, especially with all these sports coming back. How do you use that marketing scheme to make sure you can not only get new clients and build your TAM up, but also retain those new interests?

JASON ROBINS: Well, you know, promotion is like any form of marketing. A lot of what they're designed to do is drive trial or activation. But really, in the end, our belief is that the strength and quality of the product and user experience is what keeps people. So you know, I think that, to a certain extent, there will be a lot of this going on because people will be trying to drive trial.

But I think what will ultimately win over the long run, at least the bet we're making and where we're placing a lot of resources, is on having the best technology, the best product, and the best user experience. And I think if you can nail those things in a way that's truly differentiated, then you know, people maybe will try multiple things, but they'll ultimately come back to where they're getting that superior experience.

RICK NEWMAN: Hey, Jason, Rick Newman here. You know, we've seen this big surge in basically day trading on apps like Robinhood. I mean, that's a form of betting, and it's probably contributed, at least a little, to the stock market run-up we saw over the summer. Are you seeing any evidence that when sport-- when there really weren't much sports to play around with, people shifting over to that kind of thing and then maybe they'll go back to sports betting once sports are fully back?

JASON ROBINS: You know, I haven't really-- you know, similar to what I was saying in the last question, I don't have any access to Robinhood's data or anything like that. I've certainly been rereading a lot of the same things you have. So I would imagine that some people-- or maybe not just people that were previously betting on sports, but anybody that was kind of bored at home, saw a big decline in March in the stock market, thought there might be a buying opportunity, and, you know, got into it.

From our-- you know, in terms of how it interacts with us, you know, as I was saying a moment ago, our numbers have never looked better. So if it is having an impact, then you know, we're not seeing it. And I also would say that, you know, a lot of what we see, in terms of our products, are when we get customers to adopt a new sport or a new product, it doesn't necessarily reduce their activity on the other things that they were doing.

So you know, one possible theory could be this is similar, that people are spending more time day trading. Maybe there's some overlap. But it's not necessarily a substitute for this, much in the same way we haven't found fantasy sports or sports betting or iGaming to really cannibalize too much of each other either.

SEANA SMITH: All right, Jason Robins, we have to leave it there, but thanks so much for joining us once again, CEO of DraftKings. We'll check in-- check back in with you in a couple of weeks.

JASON ROBINS: Thank you.