DraftKings Inc. (DKNG) Earnings Call Transcript & Summary

Okay. And we're back for our next fireside chat. Thanks, everyone, for joining today. As I've said in other sessions, this one's going to be audio only as opposed to the video, we continue to have a few technical difficulties with that. So we're going to shoulder on with the audio. And I'm going to have an interview here with Jason Robins, the CEO and Co-Founder of DraftKings. Jason, hope you're well. Thanks for agreeing to do it and joining the UBS Global TMT Conference this year.

Yes. Thank you for having me. I'm sorry. Last year, it was more fun in person, but we'll make this work, too.

Exactly. Jason, I think there are so many moving pieces inside this business. When you take a step back, maybe just as a way to sort of set the table for investors, talk about the 3 big opportunities you're participating in right now, maybe what you think the addressable market is that you're going after and all these opportunities and how the products sort of interplay with each other.

Sure. So we've been operating our Daily Fantasy Sports product for almost a decade now. And that continues to be a product that's growing. Its growth has slowed a bit. So it's more in the sort of low double digits, high single digits now, but it's also continued to be a great source of customers for us to migrate and cross-sell onto the new products we're launching, which are online sports betting and iGaming. IGaming, meaning things -- online casino, like only blackjack and things like that. Those 2 products are really the rapid growth sources for us right now. And the degree to which they will continue to be so really is mostly, first and foremost, dependent on how much and how quickly the U.S., across the different states, adopt legal frameworks to allow for these products. So right now, we're operating our online sportsbook in 10 states. We have our iGaming products in 3 states. There are more that we hope are on the way. The way the process works is typically -- it's about roughly anywhere from 8 or 9 months to 1.5 years between legislation passing and a new state launching operators. So the 2 that are probably closest to launching operators are Virginia and Michigan. Virginia and Michigan both have online sports betting. Michigan also will allow legal Internet gaming, iGaming. And then there's a host of other states that we think will consider legislation early next year, including 3 that passed ballot initiatives in November. Those states being Maryland, Louisiana and South Dakota. So that's the big driver. Even within states, though, we're still seeing strong growth. New Jersey is growing still triple digits year-over-year for us, even though it just entered its third NFL season. So it should be many great years of growth to come as long as the pace of state legalization continues to be strong. And our hope is that will be the case.

Great. And in terms of -- obviously, it's been a bizarre year to say the least with what's been going on with the global pandemic. Can you talk a little bit about how COVID-19 has impacted your business? What you, as a leader of the business, had to do in order to take on some of the challenges that COVID-19 presented? And do you think it did anything in terms of accelerating or amplifying some of the business goals you were going after over the medium to long term?

Sure. So in the short term, the biggest impact was really both internal and our customer and product. The biggest impacts were just everything -- resulted everything being shut down. And that meant that we had to move very quickly to remote work, a work-from-home environment, which we had pressure tested about a week or 2 before the shutdown. We thought [ this can ] happen, so we actually did a trial run of work from home. It went well, so we felt good going in. And this has been an area -- I think you probably heard this from a lot of companies that have -- surprised a lot of executives out there, how well it's gone. I think particularly given how many engineers we have, we have over 1,000 engineers. And a lot of our engineers are actually saying they're finding it easier and the data and sort of code check-ins and such would suggest that we've been more productive, if any difference at all during the work-from-home period. So I think over the long term, there are certainly important aspects to having an office space and having people there, the culture and other sorts of things are easier to maintain if you have people interacting in person. But I think in the short term, it's certainly been more productive and better than we thought. And it's also caused us to think over the long term, what's the right setup and part of that will be driven by the labor market and where things go. But certainly, it's given us confidence that we can sort of evolve wherever things go given how well it's gone. The second short-term impact, which is more the customer and product side where sports getting shut down for several months. And there was a time when the most bet-upon product on our platform was ping-pong. And the most popular Daily Fantasy product was eSports or Korean baseball. So very interesting time with everybody at home and all this pent-up demand, but no sports. And what we did during that period was just try to as much as we could engage our customers and keep them active, keep them focused on our platform, our brand. So we did a bunch of free-to-play pools, as an example, on things ranging from politics to Tiger King? And it's hard almost -- people probably going to remember Tiger King at this point anymore, feels like a different memory, but that at one point in the beginning of the shutdown was a big pop culture thing. So what we were trying to do is just kind of take things that were relevant and sort of -- in the sort of mainstream mindset of people and create content around them that even if we couldn't have betting products or at least sort of free-to-play and price-based products that we could engage customers with. And then as sports started to come back on, we really heavily leaned in there. So it started with UFC, NASCAR and then PGA. The PGA TOUR returning in early June. And all of those were really great activation points and a lot of the customers we kept active and engaged through these pools pivoted to there. And then the momentum continued with basketball and hockey restarting in, I think, either late July in basketball's case and maybe August 1 for hockey. And then finally, sort of all of that created a really strong wave of momentum going into NFL season. And I think that, that's definitely been a real positive for us. We've seen record response rates on our marketing. Customer acquisition has never been at this kind of level with this sort of efficiency, and we've seen incredible activation numbers amongst dormant customers and things like that. So I think the combination of people being stuck at home with maybe a little bit extra entertainment income in their pockets since they're not taking vacations and going out to dinners as much, plus some real pent-up demand for sports with the hiatus for a few months of major sports, has created a lot of good, short-term benefit now. Focusing a little bit more on long term. I touched a bit on the sort of internal side, and I think we're still kind of seeing how things play out, but we're very cognizant that the way people work is changing and that the labor market may -- at least where we compete for talent amongst tech companies. If Google and Facebook, they're going to adopt certain policies, we have to pay attention to that, and that's the talent pool that we're all competing for. So I think that's something that we're very aware of and continue to evolve our thinking as things play out. And on the external side, I think probably the biggest thing -- and this one we'll see over the long term, how it plays out. But the biggest thing we hope happens is that -- well, certainly, none of us are happy about the pandemic. I do think a consequence of it being that state budgets are in such tough shape after the economic impacts of the virus could be that more states might consider legislation around things like online sports betting or iGaming, and they might do it faster than they otherwise would have because the primary driver for states is the tax revenue. So that being a bigger need than ever right now. And I think potentially, with the ability for what we do to solve some of the major issues states are facing around education programs and other things that they don't want to cut, my hope is that you see a real increased appetite from states to adopt legislation. And it may not be all this year, it may take a year or 2 to totally play out. But I think the more that the sort of ready-day funds start to dry up, the more the federal stimulus packages start to dry out, the more urgent that [ needs to come ]?

Maybe just -- there was a couple of things in there that I want to come back to. But right there at the end, you made a point on sportsbook versus iGaming. So I want to use the opportunity to follow-up on that. How should we think about the separate pathways for both products for legalization down the state route? Is one a view you have where there might be more favorable landscape to getting wider adoption faster where iGaming might take longer periods of time? How do you think about the potential puts and takes across both products from a legalization road map?

So for states that are going to eventually do some form of online, I think that there will be a few different types of situations that emerge. Some will be states that decide we're just going to do all of it, and we're going to do it all at the same time. And that historically, would include states like Pennsylvania or Michigan. And I think New Jersey probably would have been that if they had done iGaming years before [ past but that overturned ]. So there are some states that, I think, will do it all at once. There will be states that -- second kind of category, states that do sports betting now and maybe they don't have any plans. I think over the long term, you'll see iGaming and sports betting in most states. So I think it depends always on what time frame you're talking over. But at least in the year or 2 or 3 following sports betting, they won't do iGaming. And then I think you'll see states that first do sports betting and then within a year or 2, SaaS follow-up with iGaming. And I think some of the states that we saw do sports betting last year, particularly some of the ones in the Midwest, might be good candidates for a fast volume with iGaming. An example of a state that already did that is West Virginia. They passed sports betting 2 years ago and then iGaming last year. So that's another -- that's an example of a state that did this. So I think those will kind of be the 3 that emerge. And the overarching impact, I think, of the virus is going to be all of it accelerates. So whatever the kind of base level of just total states that would do something, whether it's just sports betting or both or anything will increase. And then I think the propensity of states to either fast follow or include iGaming legislation with sports betting will increase. And of course, we'll never know because there's no A/B test here, so we're not going to be able to tell if that was actually true. But logically, it makes sense. If the primary reason states are doing either of these things is for the tax revenue that it generates and the need for the tax revenue has increased, then logic would suggest that they'll be more open to doing either of them and whatever the base line pace would have been is going to increase.

Yes. Makes a lot of sense. I want to come back on player engagement. You talked about some of the things that when we were looking at the company from a distance, Korean baseball, table tennis, all these things have played out in the early stages of the pandemic. If you go back to pre-COVID, maybe talk a little bit about who your users were and how those cohorts have evolved and how you're viewing the ability to grow users now and sort of how their new users' behavior today might contrast with what you assumed pre-COVID-19 about user behavior across your products?

So first off, with the things we were doing during the sports hiatus like the free-to-play pools and all that for TV shows and politics, those were all really mostly the goal. Anyway, it was oriented around keeping our existing player base engaged. We did get some customer acquisition impact, but it was not really the goal. It was more about keeping the database and the current player base engaged. The secondary goal that we had was to see if we could find interesting data that would allow us to better prioritize in the future where we focused. So looking at -- we experimented with, I think, 40, 50, maybe even close to 100 different types of content on pools from different TV shows to politics to eSports and things like that. And we got a really valuable insight on what actually was the most popular. And it gave us a good picture, one that we probably wouldn't have otherwise had, of what the sort of next big area is we think once we feel like it's time to focus more product effort on expanding beyond the exploding sports betting and iGaming market. What are the next areas? And one that really stood out was eSports. ESports went from pretty much a tiny, almost negligible product to a very large product for us close to overnight. And then the cool thing about eSports is that a lot of it's stuck, whereas certain things like ping-pong, a lot of the volume went from there back into other traditional sports. ESports has actually had a lot of really good stickiness. And that hasn't been at the expense of the same players going back and playing the other sports. So it really seems like that one here to kind of stay or at least a big chunk of it is. And we're pretty excited about the future for that, although obviously, there's still a lot of room to grow in traditional sports and iGaming, eSports, I think, is still a few years off for a variety of reasons from being a massive category for us. So I think that was something that really was interesting, just kind of being able to tell what worked, what didn't and use that to help feed a multiyear product road map. And then the last thing, I would say, back to your other question around the acquisition and everything since it came back, since sports came back, we have never seen this type of response in our history. It's been unbelievable. And it makes sense. You have the combination of -- so last year, to start NFL season, for example, we were live with online sportsbook in 2 states. We now have our mobile sportsbook in 10 states. So between the big chunk of new states and therefore, eligible customers that have opened up over the past year and the pent-up demand and the sort of stay-at-home nature of COVID, we've seen just unbelievable response to all of our marketing and customer acquisition efforts. And we're hopeful that, that continues, but it's hard to imagine it's ever going to be this good once people are sort of back to normal life. So that's given us great confidence that now -- the phrase we said around the office is fish -- when the fish are biting. We're very data-driven. When the numbers say do this, we do it. And when they say pull back, we pull back. And right now, we're finding that we can invest deeper than ever and still do better than what our target tax are.

Along the same lines, we did it ourselves as a team. You look at the New Jersey market and you look at sort of behavior of customers and evolution of products. How should people be looking at like illustrative examples of the space? Is there one that sort of provides you with the true north to think through some of the user acquisition strategies and product rollout that you envision for the platform over the next sort of 5-plus years? Or is it just down to, as you said, the data science on the acquisition and understanding your marketing ROIs, when you think about growing the platform either faster or slower in a given period.

So I think the way we look at it is more data is power. So with each new state we launch, with each year 2, with each year 3, we get more data on what the customer cohort behavior looks like, what types of offers work, how differences state to state might affect certain things, what it means when you have these products in this state and a different product set in another. So more and more data we get, the better we think our advantage becomes because we believe the core advantage is that we are the best at using the data. So in a market, in the early days, where the data has been and a lot of people are sort of using very basic modeling to make decisions or no modeling at all, we think we have some advantage. But our advantage grows and grows, the more data becomes available and the more precise our modeling and application of that data can be. So I wouldn't say there's one thing I'd point to that this is the example, it's more the collection of all of the different data points we get with each passing day and with each new state that we find very helpful. And then we really look at kind of external stuff to validate because we will always have way more access to our own data than we will to say, "Hey, what does U.K. look like where we don't currently have a live online sportsbook?" We will use things like what does that market overall look like? What are companies sort of saying when they're talking about CAC or LTV, and we'll use that to say, "Do we think that jives with what we're seeing in our data? Does it help validate that we're on the right track?" But it's really much more of a validation mechanism, and we really are trained as a company to be much more reliant on our own data to make decisions to build that model.

Got it. Great. I wanted to turn briefly to Fantasy Sports. You touched upon it a little bit in the answer to the first question. Maybe just coming back to what you see as the growth opportunity in Daily Fantasy Sports, but more importantly, how you see the channel of your Fantasy Sports players continue to evolve as an effective acquisition channel for you in the coming years.

So Daily Fantasy Sports is definitely a continued sort of steady grower. It's not the mega growth product that sports betting or iGaming are right now. It's really kind of a low double digit, high single-digit growth product. But it continues to be a grower. And the nice thing is even though the revenue -- the top line, when I'm saying that, may be growing at that level, the contribution profit is actually growing faster because more and more is dropping to the bottom line as we continue to sort of scale that product. I think that, really, from -- you alluded to this, from the cross-sell side, that's really where we see the biggest growth opportunity from Daily Fantasy by cross-selling those customers onto new products. We've already proven with both sports betting and iGaming that we can generate significant revenue growth. And what we think is that, that's evidence that there's continued opportunity in doing that. If you kind of take the database and the customer and then apply our cross-sell models to other types of products, we think that continuing to expand into new verticals and continuing to sharpen our data science models will lead to more and more growth off of that core user base. So I think that's been something we've been really excited to see continue and believe it will obviously continue to be a lever for us with each new state we launch, but it's also opened our eyes that there's this viable strategy. And we actually compare it, as weird as this might sound, to Amazon. Amazon started off selling books and now sells pretty much everything. And I think a lot of the value they will get -- they've gotten over the years is just as their database builds, they can plug. And as they have kind of core infrastructure and data science models that recommend certain products to people, they can plug new products into their ecosystem and generate very strong growth off of their existing database. And so obviously, a very different category, but we believe, in general, we can do the same sort of thing.

Got it. Okay. That's super clear. The acquisition of SBTech. I wanted to get your perspective on the acquisition yourself that you did, how you thought through the vertical integration and the technology migration piece as one element versus the long-term B2B revenue opportunity. How to frame it for investors, what you thought that acquisition did, why it was the right thing to do and how you should be thinking about the way it presents opportunities for the company going forward.

Definitely, the predominant driver was the first thing you talked about, the opportunity to vertically integrate, to differentiate on consumer product, to create better unit economics, those are all key drivers, more so than anything on the B2B side. The B2B side is a nice business. It's a business that is generating about $100 million plus of revenue for us. So it's a nice business. But the goal for us was not to acquire them for the objective of getting into the B2B business. The objective is really to vertically integrate so that we can provide a product to consumers that we have full control over and can continue to enhance and differentiate over time. And then secondly, to create a unit economics advantage by bringing all of that technology and trading in-house. Right now, we actually pay a third party, and it's roughly 10% of revenue that we pay for those services. Most of the market is set up that way. Even the largest operators, very few of them actually have a completely in-house technology and trading platform. And the vast majority of those that are out there fully outsourced everything, 2 companies like Kambi or SBTech. So we thought this was a pretty big differentiator, both in terms of the type of product that we'd be able to offer, but also in having superior margins and unit economics for us versus our competition.

Great. I want to come back to sort of growth and what you're building from a platform perspective. Can you give us a little bit better sense about how your customer acquisition strategies have evolved as the company has grown and scaled and how you think about maximizing or optimizing for marketing efficiencies as you continue to learn more about where your best growth is coming from, your best retained users? Just help us understand how that strategy continues to sort of evolve based on learnings you've had as a company.

I think it's really rooted in the same way everything else for us is in the data and analysis. So we don't kind of -- there's always insight, and the insight helps you identify new opportunities. But everything we do, we test everything. We look at data and have the burden of proof rest on whether the data justifies the hypothesis or whether the data validates the hypothesis or not. So I think as we've seen more and more about what types of marketing channels work, what types of messages in the market work, there is a building upon that. And there's no like one particular thing I can point to. It's very much optimization across a lot of different things. So there's definitely learning from that. And then there's iteration in using that to identify new hypotheses, test new things, build new models. So there's no really kind of one thing I can point towards, but it's a collection of all of those different types of things that we look at. And I think we're still very much in the early stages, even though we do believe we're more sophisticated and have more data and knowledge here than most others. We think that the advantage we're going to be able to build will get much, much larger over time because the way we look at it is time is our friend here. As time goes on, the more we'll learn, the more data we'll collect, the better our models will get, the more sort of the self-learning models will improve upon themselves. So all of those things will just get better and better over time, and we think we'll increase the gap between these capabilities and those are [ our competition adds ].

So when you -- and this was something we've been talking to investors about recently. How do you think about the efficacy of either acquiring users on a one-to-one user basis from targeting activities versus building broad brand awareness of not only your company, but your products and the platform and what you're trying to build and the availability of such services? How do you get the mix right of sort of optimizing for idiosyncratic user acquisition and retention versus building broader, a larger awareness of what you're trying to build from a platform standpoint?

So we're definitely more biased towards the former. Even if you look at what we do on TV or other sort of channels that some may view as "brand marketing," everything is still very much from a messaging and activation and call to action standpoint oriented towards generating a response. And not to say that we don't look at things differently, we definitely understand there's a brand halo that exists with certain types of channels and certain types of marketing that doesn't exist with certain other types. But we still try to convert as much as possible with most of the media that we put out there right away. And I think the way we kind of look at it broadly is everything is tested, but then you can't really, when you're doing so many things, test everything to the individual level. So we more test mixes of media and mixes of sort of -- we test messaging across channels and things like that. But it's much harder -- with digital, it's easier. But with off-line, it's much harder to say, "Okay, did this TV campaign and it generated exactly that." It's much easier to say, "I mixed this into an existing media mix, and here was the overall impact," because you saw some digital channels' response rates improve and things like that. So we try to understand if there are halo impacts that occur on other channels. We try to understand if there's a pipeline of registrants that will deposit over time [ that we feel ] -- we look at all those things. But while the digital channels are very much, I think, micro optimizable, I think some of the bigger -- sort of the off-line channels, you really have to kind of optimize within the context of the whole portfolio, if that makes sense.

Yes, it totally does. And maybe just following up there, how much -- when you're trying to acquire users but you only have one product or 2 products available in a given jurisdiction at any given point in time, how do you think through the economics of acquiring someone with an eye towards their evolving usage, their evolving monetization opportunity, the fact that they might be able to be offered additional products over time? Does that factor at all into your acquisition strategies? Or do you sort of aim after sort of an LTV to CAC irrespective of what might open up in terms of future user behavior?

We actually -- it's an interesting topic you bring up because we historically have not factored that in, and we've talked about incorporating that a little bit more in the future. So as an example, when we acquire on the Daily Fantasy Sports a product in the market that doesn't have sports betting or iGaming, we look at the CAC based on -- like what the thresholds for CAC should be based on, what we think the Daily Fantasy towards LTV will be. We do not factor in the propensity for other products. What we said is, while that might be a little bit tough to do at an individual state level because then you're getting into kind of predicting, is the state going to do this, this year? And it's very hard to get that right, even with the level of insight we have into the process. I think on a macro level, it makes sense. So for example, there, what we might start to do is say, "Okay, if we're doing national advertising to acquire a Daily Fantasy Sports customer, maybe we assume 5% to 10% of those customers each year up to a certain point, right?" Because at a certain point, it will cap out. But 5% to 10% of those customers each year do end up living in states that have, that year, sports betting and -- rolled out or iGaming. So we've talked about starting to incorporate some very conservative assumptions in -- like that, but just we haven't done that yet. And historically, the reason why has been that we haven't really felt like we have enough insight into that changing decisions that we would make. So it's really almost more of a sort of modeling exercise for the sake of modeling. I'm not sure -- for the sake of like understanding. I'm not sure that we quite yet see that there's a direct application where we think we're underspending or anything like that. So we're digging in there now, and it's actually a very hot topic for us as we look to next year on how we set our marketing cap.

Interesting. Okay. You've announced a lot of partnerships recently. I think what I wanted to do is make a -- maybe take a step back and help you -- how you frame for investors what are the types of partnerships that make a lot of sense for DraftKings as a platform, why are you doing these partnerships and how should we think about these partnerships evolving in the years ahead.

So depending on the partnership, there's different uses. Some partnerships are helpful for improving the products, such as being able to incorporate certain types of data that allow us to launch new sports, being able to offer a retail sports betting product at Wrigley Field, which is contemplated in our deal with The Cubs. But the bulk of, at least today, the partnerships that we do that probably get more attention than the ones that you're probably asking about are more marketing-oriented. And the way we look at those is the same way that we look at any of our marketing, very much a data-driven exercise where we model out. In a lot of cases, there are partners like ESPN or Turner that we've been working with for years and have tested out a lot of different types of things. So we know kind of what works and what doesn't and at what level. So that helps, but everything is very much modeled out. And the kind of internal mantra is, if you think that you can get something through a partnership that will be better than what you could get buying on the open market, then do it. If you think it's going to be equal or potentially worse than what you could get buying on the open market, then don't. There's no reason to make a partner commitment if we don't think it's actually going to improve our ability to acquire efficiently versus just opportunistically spending. So that's kind of been the internal way that we've looked at it. And I think as we've gotten more and more confidence from some of the testing that we've done on some of these partnerships -- with some of these partnerships and some of the channels that they control, that's given us the confidence to do some of these deals. The other thing I should mention is the -- I think last year, you and I, when we talked, we talked about how eventually this will evolve into a national marketing strategy. So to remind everybody, if I were to buy a spot on SportsCenter, but I said, "Just show it in the New Jersey, New York DMA," it would cost me roughly 3x the cost per impression than it would cost to buy nationally. Now when there is less than 1/3 of the U.S. population that has online sports betting, mobile sports betting legal in their state, it makes sense to buy locally because even though you're paying a more expensive premium, the national advertising isn't reaching enough of an eligible audience to really make it worthwhile. Right now, we're up to 10 states with 20% of the U.S. population. Some others, Michigan, Virginia, Maryland, Louisiana that are hopefully in process will get us into the high 20s. And so we're not too far off from that 33% place. So I think a lot of -- also, as we've sort of started to think about these partnerships is we're probably 12 to 18 months away from really being in a position where national presence is the predominant form of marketing that we do. And it doesn't mean we won't do any local, we'll still have some deals with local teams and things like that. But no reason for us to buy on television or on Facebook or in any of these places at a localized level if we're paying that much more per impression. So that's part of also the thinking behind some of the partnerships like ESPN and Turner and UFC that we've done lately. And good news for us is that in the interim on the national stuff as we ease into sports betting, we can always continue to market Daily Fantasy Sports nationwide and have that be an effective means of bringing in more customers into our database.

Got it. And we're down to the last few minutes, and I sort of wanted to use your answer there. It was really helpful to sort of tie it all together. Because I think the #1 question we've gotten about the company over the last sort of shorter duration is sort of how to think about the competitive landscape evolving. I think you have obviously a fairly extensive, data-driven mindset around acquisition and driving the positive LTV outcomes for the platform. How should investors think, though, about the number of players that's in the U.S. market right now? What might, over the medium to long term, allow some of the competition to eventually abate and maybe a market structure sort of settles in as -- maybe it might take years, but as you get more maturity and more scale, and to your point, Jason, things become more nationwide to some degree? And how does that factor into balancing growth versus profitability when maybe you see someone doing something that isn't as rational as it is competitive in the market?

It's a great question. I mean -- I think we're very much at the stage now -- in the very early stages, where there's a lot of new competition entering, the market is growing, states are opening up. It's an exciting time. And I think very much like in the days when Daily Fantasy Sports -- very different sort of path there, but I remember this in Daily Fantasy Sports, there was a period in time where it was like everyone wanted to launch their own daily fantasies. Like every other week, it seemed like there was a new competitor launching, and most of them didn't make it. So I think this is a much bigger market, so it could be a bit different. There might be room for more. But I also think the localized nature of it, particularly knowing what I said earlier that eventually, this is going to move to a national media play and those that have been able to go all around the different states and get up and running in all these different places and reach as much of the population as possible, have a significant advantage on the customer acquisition side over those that are just playing in a few states here and there. And I think that, that will very much affect the competitive dynamic, but we're not there yet. We're probably 12 months, 18 months away from that really starting to be a real thing. And then as time goes on, that will become more impactful because it's not just about who can reach the threshold of 1/3 of the population, it's also who's reaching the most customers. In other words, if we're buying something media-wise and we're reaching 60% of the U.S. and the competitor is reaching 30% of the U.S., then the same exact dollar we're spending is reaching twice as many eligible customers. I also think a lot of what will happen on the product and technology side is still very much at the infancy stage. So we haven't even migrated onto the proprietary platform that we bought yet, that's slated for second half of next year. And we have a long multiyear road map of all these exciting things we want to do around live betting markets, new types of props, better iGaming products, other sorts of things that we're going to execute over a multiyear period. And so I think as time goes on, you're going to start to see a real difference in the product offerings out there. So I think between those things, I don't know how long it will take or exactly what the path will be, but it's not going to be possible for all the people jumping into the market now to continue to be able to compete on product, to continue to move fast enough, getting up and running state to state to compete on national marketing. And right now, it's more of the excitement around the market and the opportunity that's driving it and your point is valid that, that could lead to some irrational behavior, particularly with more capital coming into the space. Our philosophy on that has been just to continue to do what we do best and stay disciplined. Thankfully, so far, we've been able to do that and really have success on gaining and maintaining large market share. But we're not ever going to be the company that because our competitor does something irrationally, we're going to do it. We believe that over time, irrational behavior will get rooted out. It will not be possible for irrational behavior to continue and persist over a multiyear period. And if hopefully -- we haven't really seen it yet, which is good. There's starting to be a couple of companies here and there, I won't call any out, that are starting to maybe do that a little bit, but we haven't seen it on a mass scale. Certainly not out of our chief competitor, FanDuel, who we think is, especially now, perhaps after the acquisition, even more likely to continue with rational behavior. So far, so good on that front. But if it does happen, we are going to continue to do what we do because we believe that the best way to win over the long-term is to have a well-oiled machine that has the best LTV to CACs, driven by great product, great data science and cross-sell and really smart, data-informed, analytically-informed marketing. And if we do those things better than anybody, we think that's what wins over the long term.

Great. Well, Jason, I want to thank you again for being part of the UBS TMT Conference. I will hope you and your family have a good set of holidays as you round out 2020. And look forward to catching up on all the exciting new things ahead for the company in 2021.

Thanks. Thank you. Happy holidays to everybody out there. Thank you.

Take care, everyone.