DraftKings' Record Q2 Earnings Boost Sports Betting Sector

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Transcript

00:00Sam is with us here on this Friday ahead of a big weekend of course a lot of betting going to go on

00:05this weekend on the preseason crazy people are out there Sam they're going to bet on the preseason

00:09they're going to do it we know that so here we are let's start off with DraftKings you have some

00:14numbers here in terms of total revenue which may not tell the entire story but does sort of give us

00:20an idea as to how much this company is worth yeah DraftKings had a really really good quarter in the

00:28second quarter it actually broke a couple records sports betting wise it had the highest

00:32hold margin it ever had in a quarter and it said it got really lucky so lucky in fact that it made

00:38about 75 million dollars more than it expected to from sports from you know what we call these lucky

00:44game outcomes which is really important because as we've talked about these companies in the past

00:49you know Q4 was one of the worst quarters ever from a sports betting standpoint I think NFL favorites won

00:55it almost a 75 percent rate which literally never happens that was the first time it ever happened

01:00and that really caused a big impact to these companies I think DraftKings said it lost you know

01:06about 200 million in revenue just unexpected from that and of course that's stuff that can happen in

01:11sports betting things swing they go this way or that way but then you know Q1 it was similar with

01:15March Madness where you know pretty much all the favorites won there as well there was no big upsets and

01:20the sports books really just got hammered so this quarter it finally swung DraftKings way and other

01:25sports books that we'll talk about in a bit and it had a really really impressive uh quarter you know

01:30there was a ton of game sevens in the NBA uh the finals as well as in hockey with the Stanley Cup

01:36finals went to a game seven and I think in both sports combined for about seven game sevens total so

01:41in this period uh you know the summer months where there's usually a lot less sports going on of

01:46course you know there's the U.S. Open there's uh you know horse racing but um there was more games

01:51quite frankly than usual um in the important sports like NHL and NBA which really helped a company like

01:57DraftKings uh expand their margins and um have quite a turnaround after a really bad uh couple of last

02:03two quarters at least from a sports betting standpoint so uh they're going to continue to lean

02:07more into the things that kind of helped them that quarter which no surprise more same game parlays

02:12actually live betting was a really big bright spot as well it now makes up about 50 percent of all

02:17the money that DraftKings takes so uh you know if you're a sports better and you're on the app you'll

02:21probably notice them pushing you or gearing you more towards live betting options you know of course

02:26they purchased a live betting operator called Simple Bet about a year ago and I think we're finally

02:31seeing some of those integrations come to life within the app and this is going to be really important

02:36ahead of football season right it's you know Q3 you just mentioned uh there's got preseason going on

02:41but football season you know it's just it cannot be understated how much more significant that is

02:47to the sports books bottom line uh than an NBA or an NHL so while investors were pretty stoked about

02:54or pretty happy about you know the results um you know they've put the caveat out there that this

02:59isn't really going to matter until football season of course last football season was terrible

03:03DraftKings is going to hope they can roll this momentum into the you know the upcoming one