00:00A big shakeup yesterday, I noticed over at Legal Sports Report,
00:05FanDuel is, I guess, ousting Amy Howe.
00:09She's out as their CEO.
00:12And, you know, I guess my question for you, Sam,
00:16is that things were just so lovely with FanDuel and DraftKings and BetMGM
00:21and all these companies five, six years ago, you know,
00:23when sports betting became legal and then state after state became legal.
00:27I mean, wasn't this and isn't this just sort of inevitable
00:30where these companies are looking at their CEOs and their high-priced tickets
00:34and we're just not getting any new states being legalized?
00:38It's kind of hard to justify the advertising and even the people
00:41that are working in the company when they've already, you know,
00:45with all due respect, captured all the people, emails, phones
00:47that they need to capture at this point.
00:49I mean, outside of just saying sign up for $5 and you get a million,
00:52I mean, what's left to get people in?
00:54If they're in, they're going to be in by now.
00:57Yeah, there's a lot to unpack there, but I think definitely starting
01:01with the fact that, yes, you're right.
01:03For the last five, six years, around when Howe took over about five years ago,
01:08FanDuel and DraftKings, it's pretty much just been them dominating everything.
01:12And like you mentioned, spending on advertising and continuing to kind of
01:16the main mission they've had is how do we get more money
01:18out of our sports book customers?
01:20Obviously, there's not a ton of new states turning on.
01:22So how do we make them bet these high margin bets better?
01:25How are we more efficient from a business operating standpoint?
01:28And, you know, we've seen DraftKings turn to different levers to kind of,
01:32you know, save money or make profits when investors want that.
01:36But when you look at the kind of the big picture here is that the stock for FanDuel
01:40is down almost 60% over the past year, which is kind of shocking.
01:44If you, you know, if I dropped you on earth about a year ago,
01:47you would be shocked to hear that because like you mentioned, Craig,
01:50FanDuel has been the number one sports book pretty much for the past half decade.
01:54Really kind of what happened was they were doing really well.
01:58And then they had one kind of hiccup bad quarter at exactly the wrong time.
02:02It was, you know, they spent way too,
02:04way too little on promotions during NFL season.
02:06Their handle dropped down sharply and they missed the last, you know,
02:11earnings that they were going to give to off the Wall Street estimates.
02:15So it kind of just was a perfect storm of things were going really great.
02:18And then all of a sudden one hiccup,
02:19and then you break in all the prediction market pressures there as well.
02:22It's kind of the first time ever when you talk to analysts that people are
02:26sort of worried about the future of FanDuel.
02:28There's cracks in the surface.
02:30So not only are they replacing their CEO,
02:32they also have a new sports book improvement plan to catch up on kind of some
02:36of the ground they've lost.
02:38Flutter CEO, Peter Jackson,
02:40the company that owns FanDuel talked about this week on the call that they entered
02:44the year with, frankly, less customers than they thought they would, which, again,
02:48when a company has been so dominant and so good at what it does,
02:52and then you start to hear, okay, maybe we're not doing as great as we thought we
02:55would, investors start to worry.
02:57They obviously got spooked.
02:58The stock drops.
02:59And when the stock is down that much over the past year, you know,
03:03somebody kind of has to pay the price.
03:04So while it might not be kind of all on how, there are some, you know,
03:08FanDuel TV investments that might not have turned out quite the way she wanted to,
03:12do some sort of external marketing spend and maybe not focusing in the right
03:16areas, but she's obviously going to kind of,
03:18someone's going to have to pay the price at the end of the day.
03:20So it'll be really interesting to see kind of where FanDuel and Flutter go from
03:24here at, again,
03:26tumultuous time when you have prediction markets taking over and we just really
03:29don't know what the next couple of months are going to look like.
03:31But what we do know, Greg,
03:33is that the fourth quarter football season is going to be like the biggest
03:37make or break quarter yet for the company, which again comes after years of
03:41dominance. So it's, it's definitely things are shook up right now in the industry.
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