Name: Draft Kings Is on the Verge of Overcoming Huge Legislative Hurdles
Uploaded: 2016-07-14
Duration: 2 min 34 s
Description: Just in time for the NFL season

[ SOUND ] [ BLANK_AUDIO ] Last year at this time, daily fantasy sports seemed to be riding high. Everything going's great. And then there's a lot of negative headlines around your industry. What's the status today? Where do we stand? Originally, a lot of the negative headlines came from the fact that we were not Previously on the radar screen of a lot of regulators and all of a sudden because of the seasonality of our business and advertising that came along with it, we were. And a lot fo them started asking questions very quickly and it was always you know an interesting for the papers and for all the other news outlets, they covered it. And you know, for us it was a process of spending time with them, helping them get comfortable with our business and Working with legislators and regulators to make sure that there's a good framework in place for us to operate in a way that they felt comfortable with. So as we sit here today, New York state legislature has said that fantasy sports is legal but the governor has not signed that yet. Do you expect that he will before the football season, which obviously is prime time for your industry? I know the governor has many, many bills. It was the end of the session. [ UNKNOWN ] Right. There are quite a few, >. Right. so I think this is one that I'm sure he knows about and hopefully he will decide too sign it. You mention the ad campaigns for the last season the draftings and your make it better [ UNKNOWN ]. Do you think in some respect you did bring some of this negativity on yourself, because it was, it seemed like you were flooding the airwaves with ads. Any time you're watching anything sports related. Yeah I mean hindsight's 20 20 always, but I think that it was a time where we had been around for years and we struck a number of major partnerships, investments. We had spent time with some of the regulators, so I think we were going through that process. And had we not maybe done as much advertising that would have been much smoother. Instead it sort of took a huge step forward as far as regulators looking at it. But in a way that was actually a really good thing for the industry. The industry needed ultimately to have a framework for regulation put in place. And I think having it be such a big issue and such a big attention grabber is actually been very helpful with getting legislatures around the country to tackle it. So I think in many ways it actually ended up really benefitting us. In the short- term, yes, you could say we brought a little bit of that attention on ourselves. But I actually think it benefitted us because it was something that everybody knew about and was a high profile issue which You know, gets up the radar screen of the legislators too. It bubbled up to the surface pretty quickly. Yeah. As you look back on all of this, forget things you might have done differently, are you operating any differently today? The New York AG said, there may be some consumer fraud issues involved in how it was marketed an things of that nature. So I think we're operating a little bit differently in the sense that our advertising, certainly we've taken a second look at. And I think from our perspective it was less about, hey we thought we were misleading or anything like that and more about who we felt, maybe it was too much interest on the winning of money and not enough about the other reasons that people play. Things like Socializing with their friends, competing, being able to study the stats and understand the game and engage in the game more deeply. Those are really the real reasons people play and I think we kind of lost that a little bit with some of the advertising. That's something that I think we are moving and have moved towards Other than that, we're always looking at our business practices, always trying to upgrade our compliance measures, continually adding better ways to understand that players of the minimum age, making sure that they're playing from approved locations, and now that you have states with different regulations, making sure if they're in a state that has regulatory framework, that's being followed in that state, and so on and so forth. So this is a bigger operational challenge for you? [ UNKNOWN ] It's a fun one. I think our tech team in particular and our product team have really stepped up and built an incredible system that allows us to integrate all kinds of third party software and different things that allow us to really effectively implement regulatory framework if we need to across 50 different states and Also, we're international now, too, we're in the UK. The UK has its own regulatory framework, as well. So we needed to do this at some point. And I think that the tech and product team did an incredible job of building an amazing piece of software. So you talked earlier about your growth overseas. Is international your biggest growth opportunity, as opposed to other sports, like golf or NASCAR or something like that? Well, our US customer base is still very under- penetrated in the overall fantasy market, so we're gonna continue to try to grow there. But I think international is the next big thing for us. As far as the audience size, there's about four billion sports fans world wide and I think there's somewhere like 100 to 150 million in the US, so You don't need to penetrate that too deeply to have a pretty nice size business. We just launched in the UK earlier this year so far it's been exceeding our expectations, we're very excited about that. And right now we're on the process of exploring which places we're going to launch next while also continuing to try to grow the UK and Canada.