We're so excited to have you. I was on a panel with Michael Jordan, but I think I traded up today with you and Harry.
Oh, that's nice. Where were you yesterday?
Amazing. Well, thank you for getting on a plane for us. I appreciate that.
Thanks for having me. So, I feel really fortunate to have a founder and a CEO. Those things are kind of hard to come by. So, you founded DraftKings in 2012 and it is now a $6 billion a year business. So, first of all, amazing and hats off for doing that. That is a steep climb and a very rare space to be in. When you started DraftKings, what did you think it was going to be and why did you think it was going to work?
Well, I really never thought it would be what it is today. I started off, we were a fantasy sports company. We were focused on daily fantasy football, basketball, baseball, you know, all that sort of stuff. And that's what I thought the company was going to be. I loved fantasy sports. It was something I was personally very passionate about. And at the time, sports betting was not legal anywhere outside of Nevada in the US. So, never in my mind did I think that was the business that we were going to be in. But as it evolved and then eventually sports betting became legal, we knew that that was a space that we could be successful in and we decided to jump in.
That's most of your business now, right?
Most of it now. Yeah. Sports betting.
I mean, so what was one of the things that's fascinating is that it wasn't legal and you went ahead with it anyway as sort of an interesting business.
Well, we didn't. So, we didn't do sports betting until it was actually legal. We did daily fantasy sports initially and fantasy sports was something that was around for a long time. I mean, it was not a new thing. What we did, which was a little bit different, although it had been done by some other companies over the years as well, was we boiled it down to like weekly or daily competitions, but fantasy sports have been around for, I don't know, 30, 40 plus years before that.
Right. But then you and so right now you're legal in about half the states. Correct.
For sports betting, yes. We do have predictions here in California and in other states. So, we do have a sports product in almost the entire country now, but actual online sportsbook is in about half of the US.
Right. And so in December of this year, there was a significant decision that you guys made because the Kalshi and Polymarket, these new prediction markets actually came in and started taking a big piece of this new business. I mean, owning this business basically, and you decided that you needed to go into that space. Talk about how you made that decision and kind of how that's going.
Well, I think California is a great example. So California, there is no online sportsbook but sports predictions are live in the state and so, you know, California is obviously a very big state. We saw other companies getting into that space and we knew that this was a space that based on our experience, based on the technology that we had built, that we should be able to serve the customer in the best way and win. So we decided to enter. We've been focused on states that we do not operate online sportsbook in. We don't really view the predictions product as all too competitive.
Let me ask you this question. Did you see Kalshi coming?
Oh yeah. I've known Kalshi for years. I think the big difference with Kalshi is they've been around doing stuff like, you know, they couldn't do elections for a while. There's a whole legal thing, but they were doing like, you know, pop culture stuff like that for a long time. And we had actually talked about partnering with them to do elections back before the 2024 election, but then there was this whole thing where the previous administration didn't want it. Eventually went to court, so it just didn't work out in time. But then, you know, once the new administration came in in 2025, they decided that they were going to launch sports contracts and that's really what's made that go directly into your business.
It's very similar and I think at the same time because it's a new product, it's a good substitute in places that don't have sports betting. It's not really at the same level of quality as the sports betting product where we do offer sports betting, which is why we've chosen to focus on sports betting in the places that we have legal sports betting. But it's, you know, for somewhere like California where there is no legal online sports betting, it's a great product.
Right. Do you feel like, so as we know, Donald Trump Jr. is an investor in Kalshi and Polymarket and has friends, you know, in the highest places. Do you think that there's an unfair advantage there?
You know, I'm used to that. That's my industry. So, you got...
You're used to having the president.
Well, not specifically that, but that's a different kind of competition. I actually don't think there's really an unfair advantage here to be honest. I think that, you know, we are given essentially the same licenses, the same things by the federal government. I think the difference, which, you know, isn't necessarily because of that involvement, is that the states are now in litigation with Kalshi. The states that mostly are the ones doing online sports betting saying we have online sports betting laws on the books. This is in violation of them. That's going to ultimately, I think, end up in the Supreme Court. Right now it's traveling through the federal court systems.
Well, that's going to impact you too. You pulled your phone out. What is it you want to tell us here?
Yeah. Yeah. I wanted to give you a quote. So, Trump himself said, and this has been quoted by the chairman of the Commodities Futures Trading Commission. Trump himself said, 'Other countries are after this new form of financial market, and we want to remain at the top.' He forgot to mention that Don Jr. had investments in... I guess when you're 80 you forget things like that, but at the time...
I mean, does that make you see...
Well, I don't really think that it is something that we need to necessarily, you know, have a view on. That's not up to me. I am not influencing those things. I am here to play by whatever rules are given to us and that's kind of how I look at it.
Isn't the idea of a democracy that we all get the same set of rules? Isn't that how it's supposed to work?
In theory. But as you know, that doesn't work certainly in our industry. I think in most industries it doesn't work that way. And at the same time I think in this country it's pretty good. I mean, we feel like we have all the opportunity we need to compete in the prediction space. We're looking forward obviously to this traveling through the court system because it would be nice to get some clarity. It is hard to invest into something when you don't know if it's going to be around in the next year or two.
Yeah, that seems pretty important.
Pretty important. But you see this all over the world. Brazil just unilaterally, the president just banned all online gaming two years after they regulated it. I mean, so you give all these licenses to companies and you ask them to invest hundreds of millions of dollars in the market and then two years later, by the way, a few weeks before the election, unilaterally ban it for 120 days at least. So like, it's kind of, you know, it's something that just you have to deal with when you're in a regulated industry. And unfortunately for us, there's a lot of negative myths out there about our industry that we have to combat.
I want to talk about that one second. You were raising... raising your pinky. Also, we have a slide with some stats. Can we get that one up there? I wanted people to see kind of the...
Which stat are you going to show?
Stats of it was your height, weight, and your general blood pressure.
I don't know, Harry. You're looking pretty slim these days.
He's looking amazing.
Thank you. No, Brazil had a major sports betting business. It was called Betano. It was valued at $10 billion a few weeks ago. Now they've eliminated the whole category. What I want to do is I wanted to put sports betting in the context of valuations in sports. You'd mentioned sports betting is a $6 billion business. That's just for us. That's fine. And there's several of us. But think about it this way. Here in Los Angeles about a decade ago, the Dodgers and the Clippers were sold for about $2 billion. People were shocked at those prices, right? So, around the time sports betting was approved, there was a quote from Mark Cuban that said, 'Sports franchises are instantly going to be worth double.' Mark Walter invested in the Lakers at a $5 billion valuation in 2021.
Last year, he bought the entire Lakers at 10 billion. What's changed?
And sold it for 12 a month ago.
Now, he sold it for 12. What's changed? Was it the TV contract? No. The TV contract was a 20-year contract with Time Warner that has 10 years to go. Everybody knew what that was when he paid.
Time Warner. Sorry, just kidding.
So, what's changed? Surveys tell you that there's really two aspects of the sports world that have growth. One is women's sports, the other is sports betting.
Obviously, the increase in the Lakers had nothing to do with women's sports, right? So sports betting probably is part of that answer. Talk for a minute about this sort of, I'll call it a sort of Damocles in a way, this court question that's hanging over. It's not the biggest part of your business. By far the biggest part of your business is the sports betting side, but all your growth really is in prediction markets, right? And that could just... am I correct that if that's... since December, how much of your revenue has that become?
Oh, it's very tiny in terms of revenue at this point. I hope it's much bigger.
That's the fastest growing.
Well, it's growing from a very small base. Yes. I don't think it will be more than 10% of our revenue even next year probably. But I don't know. We'll see how quickly it grows. But the actual sports betting business is still growing. We started the NFL season. Our volumes, we call it handle, were up over 15% year-over-year through the first couple weeks. That was the highest growth we've seen in two plus years. So I think one of the theories we have is that this whole mania and hype over predictions is actually growing the overall category of people that are interested in getting action on sports even in states where we offer online sports betting and we're seeing that in the growth. But you're absolutely right that a huge part of what I hope our growth in the future is, is predictions. That said, if California legalized online betting, I would take that over predictions. I think it's a better business and I think it's better for the customer.
I don't know. We'll see. Certainly not happening now, but...
And we've got some pretty powerful lobbies in the state that already have... and my hope is eventually, you know, it's hard to imagine California being one of the only states in the country that doesn't have online sports, but I mean, California is usually at the forefront of these types of things. So, sort of hard to imagine that maybe, but I have faith that eventually that'll occur. And maybe this whole predictions thing will be a catalyst to it. Maybe it'll bring everybody to the table. I don't know.
You would like to see the Supreme Court take up the case?
Oh, of course, because... Yeah, I mean again back to what I was saying, we're making a choice to invest money into something and we're obviously keeping in mind that we're looking for shorter term returns than we are say in the dollars we're investing in our sports betting category, but we still would like to know that the money that we're investing is going to pay off for many years to come and it's not going to be just something that in a year or two is gone.
Do you feel that you can be a tough competitor to Kalshi which has so much of a head start in...
We've already gained a ton of share on them just over the last...
You just told me that it's a tiny part of your business.
but Kalshi has a higher market cap right now than... I'm not saying it's fair. I'm not saying it's... it's private, right? It's private. I mean, by the way, think how crazy that is.
I'm sorry. The value, I meant valuation. When we were going through regulatory pressure back in our daily fantasy sports days, no one wanted to touch it. Now everyone just wanted to touch our company. We couldn't raise money like that. Now everyone's like... it's actually almost like they're using us as an example. I hear people say, 'Oh, you guys battled through it all. Kalshi will get through it, too.' I'm like, 'You have no idea how close we were to death. How many times we were like one step away?' He knows.
Because there were just so many, you know, when you have regulatory pressure like that, they're involved in dozens of existential cases around the country that are going to result in the Supreme Court case. And if the Supreme Court case ends up going in their favor, they still have to figure out how to make sure future administrations don't change the rules. There are a lot of regulatory hurdles here.
Isn't the Supreme Court separate from the administration? I'm sorry.
No. No. So, sorry. So, let's say the Supreme Court says, 'Yes, CFTC, you are good to regulate this.' I see. Yeah. The next CFTC can still say...
CFTC is the Commodities Futures Trading Commission, which regulates this particular category. Which is considered a commodity and is different from gambling.
Exactly. It's considered a...
I took a stock legal course on this before I could.
So Sharon, since you're mentioning valuation. Yep. You know, you mentioned where DraftKings stock is up there. The fact that what Jason's talking about, which is waiting for the Supreme Court to make a decision, if the Supreme Court decides to continue the prediction markets, yeah, there's going to be some concerns about what the next administration does and so on, but we're solidly in that business. If it doesn't, we go back to basically being a 35% market share along with FanDuel and being a dominant player in the sports betting market. So I think we're kind of sort of hit bottom with regard to the criticism and that stock price I think actually reflects.
By talking about unfair, do you think that... I mean, your stock has taken like a 50% hit over the last year and the company is not... operationally isn't reflected in the operations of the company. Is that frustrating to you as CEO?
