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We head back to earnings with DraftKings out with their results, cutting its revenue forecast for the full year. The company also out though, with news that Disney signed a new multi year deal to make the sports betting company the official betting site and odds provider for the ESPN Sports Network. Let's bring in DraftKings CEO Jason robbins, It's an interesting partnership, and I think that's where we should start. How much
does this move the needle for you? You know, we've talked in the past on this program, Jason with you about the integration of the live sports event and the broadcast with the betting activity. Your big picture goal with this deal, Well, first of all.
ESPN is a you know, iconic brand. It's you know, by far the biggest name in sports in the United States, and they have an incredible portfolio, unmatched portfolio of sports content, influencers, talent.
So it's really, you know, for us, just the greatest partner you can have when you're in the space we're in and Jimmy Pataro runs it really understands and I think values the sports betting space and understands that the customer overlap is high and it's important that they engage their customers by being partnered with somebody like Drafting, so really excited to embark on it. We've been partners with them many times in the past, so it's familiar territory.
We know all the people there and we're looking forward to working together. And you add that to our deals with the NBC, Universal on Amazon and you know others, we have an unmatched I think presence across the sports landscape over the next several years.
Prediction markets. Wednesday night, we were with Robin Hood at their in person earning school. That was wacky. Don't know if you consider that, but the month of October massive volumes for them. You're being super thoughtful about predictions. I understand that, and you have a clear strategy. My question has always been how much a growth in a nascent predictions market cannibalizes other offerings that you have.
I think very little. If you look at the UK, for example, exchange based betting is about five percent of the total pie, so you know that's probably about right. And I think a lot of it is largely incremental because they're market makers and others that are not present on traditional sports books that generate a lot of the volume. So I think it's very much an incremental opportunity for us,
and that's why we're so excited about it. We acquire Realbird and we're also looking to you know, enter the market sometime in the next couple months.
What's interesting, Jason, is investors analysts out there called out on the actual earning script talking about how marketing expenses, higher sales expenses did eat into the results, and they call them also some ugly outcomes when it comes to the sports games for that you can't control. But what about the expenses you're going to have to have on the predictions markets.
Well, we do plan to make some investment there. We mentioned this on the call that we're going to be more i think conservative in terms of the paybacks we're looking for, just given how nissent a space it is and the fact that you know, it's unclear kind of how this will all play out, but we are going to make some investment there first, of course, and getting a product developed and making sure that that's you know,
the best in class. You can't win and we've always said this product is the most important thing you can't win if you don't have a great product, and then you know, assuming that the numbers check out, we'll spend marketing accordingly. We're going to be very data driven like we always are, and everything we will test into it. But we did want to make sure as we guided that we were thoughtful about giving the team some space to be able to accelerate spend if the numbers look good.
And therefore the guide did pull back rather than uplift going forward. Jason, but you say it's conservative. You talk about an incremental opportunity from predictions, and I'm really interested as how you make sure this doesn't cannibalize what you
already have out there. You've talked a lot about how this might actually make more states accessible to sports betting, because at the moment you can get fifty states with this predictions market, but what you've got twenty five at the moment for your offering, and you're about to and you also have DC and then you're out of Missouri.
Yeah, I mean, I think you're exactly right that this will hopefully lead more states to decide that they might as well legalize sports betting. It's I think predictions are a powerful talking point for that, because you know, same as the illegal market, same as anything. In this case, it's regulated. But the bottom line is it's activity that's already happening in the state at some level that they
are not directly benefiting from and regulating. So I do think that'll motivate some states, But for us, really the cannibalization thing isn't a huge concern. We haven't seen that happen, not just here, but as I mentioned, overseas where there's long established I mean, it's not a brand new thing
like it is here. There's been predictions and sports exchanges around for decades in the UK, for example, So we feel like there's pretty good data out there to show that head to head, the traditional sports betting product is a much far superior product for customers.
Jason, you said that this is the most bullish you've ever felt about the company's future. What are the underlying trends, data points, behaviors of your customers that give you that conviction and why do you have it now that you didn't have previously?
Well, I think if you take a step back, you know, it really starts with the progress that we've made over the last few years in the position we put ourselves in. Remember two years ago, we weren't even profitable. Three years ago, we had nearly a billion dollar adjusted EBA de loss. At that point, you know, we were getting killed in the market because people thought we were going to run
out of money and go out of business. We really buckled down, we grew revenues, we managed costs, and you know, just a few years later we've had an over billion and a half swing. So I think that shows that we are in a great position. But also more importantly, now we're in a position to play offense. We are profitable, we have scale, we have the best product in the market, we have the absolute best partnerships and presence across the
media landscape. About to launch sports predictions, which I believe represents a huge incremental opportunity for us. So a lot of really exciting things going on, and the only real negative on the quarter was the sport outcomes. I think all the steriover predictions is kind of nonsense, but the really only negative sport outcomes. But that's a temporary thing, that's not something that has anything to do with the fundamentals of the business.
Draft Kings CEO Jason Robbins thank you very much,