Welcome back to Opening Bell. It's time for our CEO spotlight. So exciting to have DraftKings with us. We did see the company's stock moving lower after the fourth quarter results, but a lot of this is because some of the new changes that are coming. So to hear more about this, Jason Robbins, co-founder and CEO of DraftKings, joins me now. I'm so glad that you are with us. We just got over the Super Bowl. We know that you've added prediction markets into the company's offerings. I want to hear a little bit about, I know the guidance is affected because you have some high costs that go with trying to do this new plan. Good morning to you and tell us a little bit about the quarter and the outlook.
Well, I don't know that it was really any costs. I think it was more just we were fairly conservative with our guide and I think people were probably not expecting us to be that cautious, but you know, we tend to go out there and do our best to beat it. As far as predictions, we saw a huge increase in the Super Bowl. It was a big jump from what we had seen in previous weeks. I think a lot of that was obviously Super Bowl, but also we made a major upgrade to our product adding Crypto.com and that added a ton of content for customers that they couldn't access before. Over the next several months, we're going to develop this into the best predictions product in the world. And we intend to be number one and we're going to go out and get it. And the nice thing is we already have a lot of marketing that we're investing. We already have a lot of investment in technology and infrastructure around pricing markets and trading and things like that. So there is some incremental investment, but it's not that significant. We think we can go out and be really aggressive and win without having to spend that much. But we do have some that we will need to invest in order to win.
All right. Because I had read, I think it was Bank of America, I had written the sentence down that some were balking at the high costs to push into the prediction market. So you're negating that and saying it won't quite cost you as much as some of the people on Wall Street think. So I'm glad we made a clarification there. That's why we have this conversation. I'm glad you're here. So you know, you said you're going to try and make this, and you will make this the best experience in predictions. How so? Yeah. What's up?
Well, first of all, we have always had the best products in everything that we do. Our products are consistently rated number one across everything from fantasy to sports betting to iGaming. And you know, we've shown a consistent track record of being able to really rapidly develop and add new features, innovate. That's been our hallmark in everything that we've done. We've always been known as the company with the best products. So, I think we'll be able to do the same thing here. We have an army of engineers. We have a ton of data scientists. We have AI investments that we're making across the business which should speed up code delivery and improve our products. Lots of really good tailwinds behind us.
Yeah. And of course, I mean, you're in the top five always in the Apple App Store along with a couple of the others with betting, sports books, and prediction markets are extremely popular. Do you think that you could acquire millions of new customers by now having this offering in addition to your sports book?
How many? Because I think if you look at it now, we're in sports betting in approximately 50% of the US population, states that have approximately 50%. So that leaves about half the country, including the largest states like California, Texas, Florida, that we are not currently in for online sports betting. So we have not had a vehicle to acquire customers anything like what we will see with prediction markets. Now obviously there's some time to get the product into place and make sure we get there, but that should happen rapidly. Our goal is by next NFL season, if not sooner, that we can start to really dial up the aggression in terms of marketing. And I think at that point, you'll see those types of numbers or at least line of sight to those types of numbers materialize.
What would be a fair, when you say acquiring new customers, because this really will give you the opportunity upwards of how many millions do you think?
Well, it's hard to put an exact number on it. I mean, we are acquiring several million a year on our online sports betting app. So, you know, I think if you even are conservative, you're looking at least something in the seven-digit range. And if you assume that it's similar or even bigger than what we're getting in our online sports book app, then who knows? It could be many, many millions.
Oh, wow. That's actually good news there. I mean, from what I understand, there's a willingness of folks now to be betting and get into these prediction markets there. They have a risk appetite that's been growing. Interest has been spiking in betting overall. To what do you attribute that and what are the predictions going forward? Because from what I understand, we saw one and a half billion traded in volume on the Super Bowl. Was that a record? So what do you attribute these moves for?
Well, betting's been around for a long time and you know, a lot of it has existed in the illegal markets, whether it's your local bookie or someone who's offshore operating a website or app. There are a lot of people betting already in states that we have not previously been able to offer a competitive product. And I think this really presents the opportunity to do that. So, first there's a lot of those folks and then I think there's also just a trend happening as you look at, you know, the last several generations. And really that trend is towards people wanting to have more interactivity with sports, wanting more gamified experiences. These are things that are not going away. They are trends that should continue to accelerate. If you talk about, you know, 10, 20 years from now, I think you'll have way more people betting and using things like prediction markets than you have today. And it's just going to keep going up from here.
