Bloomberg Audio Studios, podcasts, radio news.
Jason Robbins is CEO of Draft Kings and he joins us now. Jason, always a pleasure to speak with you, and there's a lot to discuss when it comes to prediction markets. We'll dig into that shortly because I'm sure it's taking up a lot of your and your company's mind space right now. What part of your business is not affected by prediction markets and how's that going?
Well, the bulk of our business isn't prediction markets. Still, that's still a very new business for us. Our core business is sportsbook and iGaming, and both of those are doing very well. We had seventeen percent revenue growth, really great quarter from a profitability perspective, and April has been a great month. Q two is off to a great star. We mentioned on our call. April revenue is up twenty
two percent, so really strong growth. And I think the most exciting piece that is in the future prediction markets. That's not even in the numbers yet, so hopefully that'll provide even more upside.
Absolutely, what have you observed about how your customers use and interact with these sports events contracts?
Well, it's very early, but it's very similar to what we're seeing on our Sportsbook product. Very similar type of customers, similar engagement in terms of the sports that they like, a little bit more on March Madness relatively speaking than we saw in some of the other sports, which is interesting, but overall looks very much like the same type of customer that we got in Sportsbook.
When do you think this app will be ready and will it be positioned to challenge rivals? Like?
Hell, she Well, it's ready already. We've been in market since December, but it's really improved a ton and we just launched the super app version, which is the combination of it into the main app, a few like about a month or so ago, and already we're seeing customer acquisition costs plummet. We had about a ninety percent decline and customer acquisition costs over the last month or two.
And you said, it's still not a big part of your business, but how big of a game changer could this be down the line?
Well, what this does is it allows us to offer a product to customers in the nearly half of the country that we don't have online sports betting. That includes the three largest states, California, Texas and Florida by population, that is now an addressable audience for US, So it will take time for them to ramp, but I think it's going to happen pretty quickly starting this NFL season and beyond, and we're planning on investing as long as
the numbers are good. But so far, we really like what we're seeing and we're excited about the potential for this to be a huge growth lever for us for several years to come.
The fact that you're offering a prediction market product and that you are getting ready for this super app, this unified APP would suggest that you and the rest of management expects a legal status of those markets to be ultimately affirmed by the Supreme Court. Is that a fair statement.
Well, I don't want to predict what the Supreme Court's going to do. It's always tricky on something like that. We just need to make sure we're prepared regardless of the outcome. And I do think that we'll be in a great position no matter what ruling is. If it ends up that, you know, the Supreme Court strikes us all down, then you know, we go back to having less competitors like the Calchies of the world out there.
But if they end up affirming this, then it represents a huge new market opportunity that we're just beginning to tackle. So we're pretty happy either way, and we'll see what happens.
I mean, your business is sports, whether it's through the traditional sports books or through these sports events contracts. Do you plan to offer events contracts on non sports events like politics, for instance, economic data, cultural events.
We do offer those. We have a number of those. I think, particularly the politics ones get decent amounts of decent amounts of volume obviously the bulk of the industry and a matter which prediction platform you look at. As sports, it's true, you know almost ninety percent, it'll be north of ninety percent once the NFL season hits. But those that are, even though they don't get as much volume,
are very important from a customer engagement standpoint. I think a lot of people just like looking at them, and it's almost like a substitute for looking at polls to see how people are doing and elections and things like that. And I think it's almost a novelty, just in an eyeball kind of catching things. So even though not a lot of volume goes there, we view them as a very important part of customer engagement.
And you've now posted two straight carter so of positive net income and brought backstock. Does that a new phase for capital allocation at your company?
Well, we started generating meaningful cash flow last year, it's ramping into this year, and we've always said that, you know, we're going to use at least some of that capital the buy back stock. I think, depending on how things go, we may buy back more or less in any given period of time, but our overall commitment is that we are aiming to try to offset any dilution so that our share acount stays neutral and maybe even declines a little bit over time.