00:00People look at the revenue forecast being lowered by about $200 million, right?
00:05Bear with me, Jason.
00:06Is that exactly how much DraftKings lost on March Madness, the $200 million figure?
00:14No, we actually put out the numbers.
00:16We have a bridge in our earnings materials.
00:18It was a little bit less, but overall, it's not too far off.
00:23Okay, talk to us a little bit about what's too far off as well.
00:26What else is driving perhaps an expected downgrade in full-year guidance?
00:31Analysts seem to be taking this well on the chin as our investors, but the regulatory environment as well.
00:36How much are you having to nuance for that?
00:39Well, we put this out there.
00:41We had about $170 million from sport outcomes, and then $30 million came from Jack Pocket being caused to not be operating anymore in Texas.
00:52But then the overall fundamentals of the business were actually very strong.
00:56We saw increase to structural hold rate, our promotional efficiency increase.
01:01So some of those things offset as well.
01:03So really, the fundamentals of the business are about as healthy as can be.
01:07And I think the real question is, when will these sport outcomes turn around?
01:11It's been two quarters in a row now, but obviously that happens.
01:14And that's part of the greatness of the product is that customers can win, and they can go on winning streaks like this.
01:19And it makes it a lot of fun, obviously.
01:21And, you know, we'll see.
01:22It was the first time, and I think second time ever, there were all four number one seeds in the final four.
01:27Only the first time ever that that happened with also all twos and one three seed in the Elite Eight.
01:32So you never know.
01:34Maybe there will be another year like that, but probably not.
01:37It was more likely an anomaly.
01:39And, you know, NBA playoffs already have had a bunch of upsets.
01:42So it tends to kind of swing around the other way over time.
01:45Ah, too much consistency.
01:47But what also is consistent, Jason, is a massive jump in your monthly active use is when you talk about the jackpot in particular.
01:54And I'm interested in how jackpocket is transferring to other sports, casino games and the likes.
02:00Or are people sticking to that lottery application?
02:04Well, jackpocket is still very early in its growth.
02:08It's still quite nascent.
02:10And so we believe there's a ton of upside for that business, and we're excited about it.
02:13We haven't fully integrated it into the DraftKings app yet.
02:17We haven't put it on our platform yet, which should dramatically increase both the conversion metrics and also the cross-sellability and marketing ability.
02:24And the cross-sell is already well above our expectations.
02:27So we think there's even more upside there.
02:29So we're pretty excited about it.
02:30We think there's a lot of growth potential, but it's still small.
02:33So the overall impact on the business isn't great yet.
02:35But hopefully that changes as jackpocket continues to grow.
02:40Jason, in your industry, there are big, almost legacy names, Las Vegas Sands, for example, that are pulling out of bids for land-based casinos.
02:49And I wonder how much you can assess their nervousness that online gambling just cannibalizes demand for land-based and how that impacts you.
03:00Well, it's certainly a perception that we have to fight because it's out there.
03:06I do think that the facts are very mixed on that, while there's certainly some examples you can point to where there's been diminishing markets, where they've had online gaming.
03:15It's also often where there have been declines going into that.
03:18And then you see the complete opposite story in states like New Jersey, where they grew and really reversed a declining trend for years after legalizing online gaming.
03:27And it's also different property to property.
03:30I do understand, though, why if you're a company that has no iGaming play right now, doesn't have an app, doesn't have a way to make money off of it, that this wouldn't be seen as any upside for you.
03:40And so naturally, you know, if there's no upside, there can only be downside.
03:45And I do understand that.
03:46But I think the amount of cannibalization and the downside has been greatly exaggerated.
03:51And we need to do a good job or a better job, I should say, educating on that because the numbers don't necessarily support that story.
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