Welcome back to cheddar news, everyone.
Sports bettors in New york will no longer need to take the bridge tunnel or ferry
to New Jersey or drive up I 95
to Connecticut to place their wagers starting tomorrow.
That's because for sports books,
including draftkings will be going live in the
state and allow sports fans to place bets directly
from their mobile devices.
Well, joining me now is Matt Kalish, president of Draftkings,
Matt huge day for your company tomorrow. How are you preparing for this?
Yeah, it's a giant day.
It's our 18th state that we're launching,
but it will be the biggest state that we've ever launched.
Our sports book.
And
you know, it is a big moment. Our team is very ready though.
You know, we've been through this many times at this point and you know,
come nine a.m. saturday morning, you know, we'll be ready to turn the lights on,
Start taking customers first wagers.
Um,
we've anticipated this for a while for years.
We knew that new york was looking at potentially passing a
sports betting bill and it was a matter of time.
And we're really excited that that moment is finally here.
What's the influx of orders math that you anticipate
when the books open at nine a.m. Tomorrow?
Well, we have an idea for it from some past states.
You know, we've launched in large states like michigan Illinois Tennessee, um,
pennsylvania, New Jersey.
So,
you know, we have some context, but every state's different.
So we'll have to see how it goes.
Uh, there's some great events coming though over the weekend.
You know, we have Celtics knicks the first night we launch,
we're running a promotion where if you bet $25 on there being one point scored,
you double your money on the first day,
I think there'll be one point scored in the game.
So it's a nice way to get started then, you know, with NFL on Sunday coming up,
you know, that's our most popular sport.
So I think we'll see tremendous engagement during NFL for week 18.
Uh, and then going into the playoffs, the Super Bowl, March Madness, you know,
tremendous sports schedule coming up.
So I would anticipate that this first fiscal quarter
for your business will be a huge one,
namely because the Super Bowl does fall in
the first quarter and of course now people in
new york and actually betting the state of new
york on their mobile devices seems pretty convenient.
How is this expected to benefit your business?
How much money are you expecting to bring in
in the state of new york?
Well, we'll have to see how it goes.
I mean, I hope that we,
like in many other states establish a leadership position in the market.
Our goal is always to launch first and to have the
number one market share in every market that we enter.
You know, we have a really ambitious set of plans.
We're gonna run aggressive promotions,
we're gonna have a good marketing mix.
Um and we feel really confident in our existing user base.
You know, we have tons and tons of customers playing fantasy playing on our N. F. T.
Marketplace today in new york. And so that cross sell that comes in on day one as well.
We feel like we'll be tremendous. So we'll have to see how we do.
But I feel really confident that will establish a
leadership position and that will result in success.
NFL huge for your company, the Super Bowl of the year, that league.
What about college football? Big game on monday between Georgia and Alabama.
Will that be big for you?
Yeah, that's always one of the biggest moments of the year.
You know, Georgia laying three points to Alabama,
The Alabama is not often the underdog.
So that'll be maybe really seen as attractive to the
betters in new york to take a shot on.
Hey, I get points with Alabama. That's great.
Um, but that'll be huge.
The national championship game every year is very popular
and then soon thereafter we'll have March Madness,
which is another, you know, enormously popular event.
So operating of course a sports book in new york not coming cheap,
especially in the wake of the coronavirus.
These states need to make money and new york is no exception.
So I'm seeing here, the state is going to be taxing operators at a 51% rate on profits
That's huge as well as a $25 million dollar one time licensing
fee. What impact is that expected to have?
You know, we're just gonna run our playbook, which is,
we want to provide the best customer experience in the market.
We have a lot of ways to look at that.
But you know, across the board,
when we ask customers and where's the best place to play?
We want draftkings to be the answer and we want to be
the first sports book that's thought of when you ask a consumer,
you know, where do you go to win money on sports?
So
if we're doing well there, the rest tends to follow
a lot of our expense.
You know, we control a lot of what our marketing is and what a lot of our expenses are.
So we can really gear that and customize it to each market.
Okay, so we had known many in New York.
Oftentimes would take the ferry or train or they drive over
to New Jersey or they would drive up I-95 to Connecticut
to play some of these bets
and now they'll be able to do it in new york. If they, if they live
and are traveling and visiting new york,
how's that expected to cannibalize your business in New Jersey
and Connecticut?
I don't think it will be a giant factor.
I mean we had thousands and thousands of customers
who would literally go and cross the border to
bet in New Jersey or up to Connecticut just
because the product wasn't available in new york,
but I think really what that did was drove a lot of the
business to the illegal offshore market or it just didn't happen at all.
It's pretty inconvenient, you know,
to go across the border to make a bet and people were doing it,
but I think it really stifled a lot of the opportunity.
So while there's some of that going on, I think really like a tremendous amount,
like a giant percent of new york will be very incremental.
How does this position you met? The fact that you've got access to this in new york
versus your competitors,
we know that penn national Gaming for instance could not get its barstool
sports book here approved for mobile betting in the state of new york,
does this give you more of an edge around the country?
Yeah, I mean, the first step in any state is getting licensed, you know,
licensing is, you know, a top priority for us.
We want market access in every state
and you know, when states open up sports betting for business,
we want to be the first to launch whenever possible.
So those are our goals and you know, in a case like new york especially,
so like it's critical to get market access.
Um, so we're excited that our bid was accepted and we look forward to working with,
you know, the regulators in new york and bringing,
you know, a top rated up into the market.
All right, Matt Kalish, president of Draftkings,
the stock rising today in anticipation of the launch tomorrow morning.
We still appreciate your time,
congratulations and good luck.