CEO Jason Robins on DraftKings’ next big bets | Masters of Scale

Well, I don't know if I am the right person to answer anything about what should. I mean, I know, but that's up to the regulators in a broad sense. I think things that could very easily be manipulated we should be cautious with, or things that are just negative. Like, will this player get injured or something like that? I just don't view it as the right thing for the industry. You know, the rules are about to be written. And I think the right answer though is probably some sort of restrictions, but in a reasonable way.

Thank you for having me.

Well, it's a lot of work leading up to it. We have a ton of things that we want to get ready. Everything from new product features to marketing campaigns. So, you know, it's a big event that we're all getting ready for. The week of, I'm here for most of the week doing stuff like this. Lots of meetings. Watching the numbers every day. Tracking things against how we expected, all that. And then by the time you get to the game day, everyone's pretty exhausted, but we grind through. We actually give the company the day off after the Super Bowl because it's such a big lead up and so many people work on Sunday and Saturday.

Well, it's the biggest day of the year for us. It's a single game. So, you know, relative to like weeks where there's lots of games, obviously, it's got to be much bigger on a per game basis. So it just dwarfs any single event that we have. And it's not just big in terms of volume. It's big for us to activate customers, to get new customers. It's just everything is sort of about the Super Bowl. And then the goal for us after that is to hopefully give them a good experience. They want to stick around for things like March Madness and NBA and NHL and PGA and all the other things coming up.

We can't, I can't give you a number exactly. Directional, hundreds of millions being bet. Sorry, that's, yeah, hundreds of millions.

Well, that's pretty new for us so I don't actually know how that's going to look. We've never, I mean we've literally been doing that for like a month. So it's still pretty new. It won't be a big number in terms of our overall this year but I do expect to see a big jump in growth on the Super Bowl for that. We're hoping to get a lot of new stuff in the product for them. We'll see if we get it in on time. I think we will. But, you know, like I said, it's just a big day where you get a lot of new customers and things like that. So, hopefully it can be a catalyst for DraftKings predictions to keep growing throughout the year.

Well, the good thing for us is our content is endemic. It's basically, you know, so related to the game that it's already something people are paying attention to. People already associate the Super Bowl with betting. They already are thinking about all the novelty bets like which color the Gatorade will be and things like that. So, we're already starting from a place where the mindset of people is already there. You know, it's tough because you never know with creative what's going to resonate. What we try to do is experiment a lot throughout the year and figure out what types of messages, what types of offers, what types of creative will resonate. But, we haven't done a Super Bowl ad in 2 years now. So, this will be a nice one to come back to. I'm really excited. We have a partnership with NBC, so it's a big part of that.

You know, the biggest thing is we had just done one for a few years and we decided that looking at the data, it made sense to take a year off. And I think this year with the NBC partnership, we also have more creative things that we're able to do in terms of integrations with the overall broadcast and I think that will make the creative in the Super Bowl perform better.

You know, it's funny because I never really know which campaigns, like even when I'm watching it, the ones that are like the biggest aren't the ones that I would have thought. Every once in a while there's a year where you have one that just everybody's like, 'Yeah, that's the ad.' But it just teaches me a lesson and I always tell people this: creative, everyone has an opinion on. It's not something that you can be that straightforward with. And I've seen things where I and others are like that's terrible and it kills it on performance. And so over the years learned just not to be too, you know, let the marketing team do their thing. I'm trying to be the one person who's not, unless I really think we're doing something bad, I'm not out there saying I think we should do something different. Because they're already hearing that from a hundred different people and the reality is they know how to do their job. Some things are going to hit, some things are going to miss, but no one really knows until you actually do it.

Yeah. And the Super Bowl ad is so different, right? Because it's one thing. I mean, it's one piece of creative. You're spending probably a good bit of money to produce it. You're spending a fortune to put it on TV.

It is. You got to use the science to figure out which of the art forms are working. But 100% and everything. I've just too many times had situations where what I thought happened was not what happened. I'll tell you the other thing about the ad that we're doing a little differently this year and one of the reasons we took last year off: a lot of our customer activity and getting people engaged comes before the game. So we did a lot of advertising going into the game and then during the game people are more focused on watching. This year though we have made so many great upgrades to our live betting product that we're really going to try to take the, and you know that's the perfect opportunity for it in the game to try to really take a shot at getting some live betting activation. So that's really what the campaign will be about this year. So, that's a new experiment for us. We've actually never really tried something like this before where we're really pushing live betting in the middle of a game. We'll see how it goes and we'll learn from there.

Well, we have been a big proponent of responsible gaming. We've invested a lot in it. We have a person who reports directly into me, Lori Colani is our chief responsible gaming officer whose sole job is to focus on this. And we made a ton of progress. We actually just released a data sheet which we could share with you showing real data and stats behind what we've been doing because it's one thing to talk about, it's another thing to show in the numbers that we're actually doing it. We've had so much engagement with our responsible gaming tools. And one of the things that we're trying to get for people, you know, change the mindset of people is you're talking about problem gaming when you're saying, 'Oh, those are people that shouldn't be on the platform.' And our goal is either through them self-identifying or us identifying them to not have them have access to the platform. But there's a lot of other people that they can play, but they still should be playing responsibly. It's no different than any activity. If you're spending money on something, you should understand how much you're spending. You should have a budget. We have tools that help people do that. So we have stats that show here's how much you've spent. We have tools that allow you to set limits at all kinds of granular levels, daily, monthly, whatever you want. We have tools that allow you to say how much time you want to spend on the app and set limits on that. And it's really meant to empower the consumer. And what we want long term is a sustainable customer base that is responsibly using our products and enjoying them and getting entertainment out of them. It's not good for anybody if you're not having that. So that's really the goal and I think we made a ton of progress this year and it's going to continue to be a core part of our mission.

Well, we've already integrated AI across many of our customer service touch points. And one of the things that AI can do, and I think this is part of what you're alluding to, it can look at all forms. So, what happens sometimes, you have a customer, they will interact with various people. They'll interact with a piece of marketing. They'll write into customer service. They'll talk to their host if they're a VIP customer, various things. And what AI can do is it could take all the communications, and there's so many of them. So it's really impossible for a human to manually go through all this stuff and comb through very quickly and find any sorts of patterns that we may want to look into. And then we have a dedicated team of people that can review those things and see if there's anything that they think is troubling and follow up with the customer as necessitates. So I think that we're just scratching the surface now. Obviously we got to be very cautious and responsible in how we implement AI too and that's something that's very important to us. But I think this is a perfect example what you're raising of where AI can actually help. You know, so many people come to me like are using AI to get people to bet more. It's like actually they're not thinking about these types of things which is using AI to actually improve responsible gaming.

You know, like any new technology, you have to think about those things. And with anything, there's going to be people that are looking to utilize it to win more. And so, obviously, we want to give people a shot at that. So, we want to make sure that we're using AI, too, to help set our lines and help manage them. And I think it comes down to, you know, just being on top of new technology and making sure that whoever's on the other side of it isn't using a technology that we're not prepared for. And we should be using it, too. And I think that creates an equilibrium in the playing field.

You know, I think first you have to sort of separate prediction markets from traditional betting. It is a different thing obviously. I understand the areas that people see similarities but it's a different regulatory framework, the product experience is different. And so I view it as a space that we can incrementally add more revenue and win in and add more customers especially in the states that don't have our traditional sports betting product. I think it's a fantastic product for places like where we are now, California, Texas, other states like that.

Exactly. And so, you know, we look at it more in that way as an opportunity for us. We've for years had competition. The market structure didn't start this way. And if you look at it, it's not like even by volume the prediction markets are any more market share, if you put everything together, any more share I should say than some of the other competitors that we have that are not number one and number two in the space. And I think that could obviously change over time, there's more people if you want to look at it that way competing but I don't know that that necessarily changes the dynamic. I think we have to make sure that we're developing a great predictions product so that we can compete in that zone and I like to think that having a bigger suite of products and overall bigger ecosystem of marketing and all the various partnerships that we have, a brand that really has been built up with the sports customer over many years. I mean we're ubiquitous all over the airwaves and being able to over time tell a broader story of all the different ways that you can play sports with DraftKings and having people all over the country drive from that singular marketing versus having to spend incrementally I think will be a huge advantage for us.