Earnings Call: Q1 2020

May 15, 2020

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the DraftKings First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, May 15, 2020. At this time, I would like to turn it over to DraftKings' Chief Legal Officer, Stanton Dodge. Good morning, everyone, and thanks for joining us. Statements we make during this call that are not statements of historical fact constitute forward looking statements that are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from historical results and or from our forecast. We assume no responsibility for updating forward looking statements. For more information, please refer to the risks, uncertainties and other factors discussed in our SEC filings. During the call, management will also discuss certain non GAAP and non IFRS measures, which we believe can be useful in evaluating Draup Kings and SB Tech's operating performance. These measures should not be considered in isolation or as a substitute for DraftKings financial results prepared in accordance with GAAP or SB Tech's financial results prepared in accordance with IFRS. A reconciliation of these measures to the most directly comparable GAAP or IFRS measures is available in our current report on Form 8 ksA filed today with the SEC and in our earnings presentation available on our website at investors. Draftkings.com. Hosting the call today, we have Jason Robbins, Chief Executive Officer and Jason Park, Chief Financial Officer at DraftKings. They will provide opening remarks and review of financials, and then we will open up the call to questions. I will now turn the call over to DraftKings' CEO, Jason Robbins. Thank you, Stanton, and good morning, everyone. Welcome to our first earnings call as a publicly traded company. Before we start, I'd like to thank all the essential workers from healthcare professionals to grocery store employees who have been on the front lines fighting this global pandemic. Our thoughts are with everyone who has been impacted by COVID-nineteen. I'd also like to express my appreciation to our shareholders for their support. We are thankful for the belief that our investors have demonstrated in DraftKings through their participation in our business combination, and we also greatly value and welcome those who have become new DraftKings shareholders. The success of our transaction is a testament to the conviction and confidence our owners have in our ability to continue to build the only U. S.-based pure play sports betting and iGaming company. The DraftKings vision is unchanged. Our goal is to build the best, most trusted and most customer centric destination for skin in the game fans, offering the most entertaining real money gaming products that will forever transform the way people experience sports. I'd like to cover 3 main topics today. First, I will provide a brief summary of the business, the large and growing market opportunity, our strong competitive positioning and our ability to generate differentiated economics. 2nd, I'll review how we are managing through the current crisis to best position our business as sporting events resume. And I will also provide an update on where things stand on the legislative front. 3rd, I'll outline our major priorities going forward. With that, let me start with a summary of our business. DraftKings is uniquely positioned at the intersection of digital sports entertainment and gaming in a rapidly growing industry. This opportunity represents an estimated addressable market of over $30,000,000,000 in the U. S. Alone when considering a combination of online sports betting, fantasy sports and iGaming. There may also be less developed fantasy and betting markets that could grow significantly in the coming years such as esports. We believe the combination of a large currently underserved market along with strong momentum on the legislative front provides the potential to create an environment of continuous category expansion for many years to come. We see ourselves as the premier brand in digital sports entertainment. We are currently one of the leading U. S. Digital sportsbooks and have the number 1 rated daily fantasy sports and sportsbook apps in the country. Through the acquisition of SB Tech, we have created the only vertically integrated sports betting company in the U. S, enabling us to be the product innovation leader for American sports with a clear focus on the American sports fan. Finally, we have differentiated economics in online gaming due to our strong CAC and LTV metrics, driven by our large and growing fantasy sports database, a strong and well known brand, significant expertise and infrastructure around marketing and robust cross sell metrics powered by years of investment in data science and analytics. Additionally, we have a clear state entry playbook to drive long term profitability. Turning to current events, I want to provide an overview of how we are responding to COVID-nineteen. Certainly, the current environment of major sports leagues and major sporting events has created short term revenue headwinds for the business. However, we are now in a strong position with nearly $500,000,000 of cash on our balance sheet. Additionally, our long term growth expectations remain unchanged and under certain scenarios may even accelerate. While no one can predict exactly how COVID-nineteen will affect the world and for how long, we are confident that when sports return, DraftKings will be ready. As we have taken steps to navigate the short term impacts of the crisis, we have also been planning for what the post COVID-nineteen world might look like, ensuring that the actions we are taking today are putting us in the strongest possible position. Our number one priority as a company is our employees' health and safety and our organization continues to work productively in this work from home environment. Our teams are making great progress on our key priorities such as launching new states, continuously upgrading our data automation and marketing technology capabilities and building great products for our customers. Our product and technology teams have also created new content that is keeping our customers engaged during this unique period. I would like to thank all of our tremendously talented employees who have stepped up and adapted to new working conditions without missing a beat. It has been truly remarkable to witness. On that note, I am very proud of the content that we have developed over the last 2 months. For example, we have built a product that allows DraftKings customers to engage in esports events such as simulated e NASCAR, Counter Strike and Rocket League. We developed content for lesser known competitive sports such as table tennis. We launched a plethora of pop culture free to play pools contest that covered everything from the Democratic debate to TV shows like Survivor: The Last Dance and Top Chef. We also launched simulated Madden games and most recently we partnered with MLB on their new MLB bracket game. In parallel, we have continued to deliver on our state expansion roadmap, successfully launching both iGaming in Pennsylvania and sports betting in Colorado in early May. The engagement numbers that we are seeing across all of these products are a great validation that our customers are loving the content and it also shows their passion for our products and loyalty to our brand. As we continue to monitor developments from sports leagues and teams, we are proactively planning for the variations of what the sports calendar could look like the rest of the year. With the expectation that the sports calendar will overlap like never before, our focus is on ensuring that we are prepared for the potential increased traffic and activity. There are still a lot of unknowns about how COVID-nineteen will ultimately impact major sporting events, but we are confident in our ability to perform as we prepare for what we hope will be a busy global sports calendar in the second half of the year. Currently, we do not anticipate any impact to our FY 2021 or long term plans as a result of COVID-nineteen, assuming the sporting events calendar resumes to a normal state by 2021. There appears to be momentum with sports betting and iGaming legislation in the U. S. We are continuing to work with regulators to get our products live in states where we do not currently operate. In Q1, we launched sports betting in Iowa and more recently, we launched iGaming in Pennsylvania and online sports betting in Colorado. Additionally, an online sports betting bill became law in Virginia on April 22. Other states have passed legislation over the past year or so and in the process of working towards launching operators. These states include Michigan, which passed a sports betting and iGaming law in December 2019 and Tennessee and Illinois, which legalized online sports betting about a year ago. At this time, approximately 14 states are actively considering sports betting legislation. We are hopeful that we will continue to see the momentum as many states are expected to confront budget deficits. Finally, before I turn it over to our CFO, Jason Park, to detail our Q1 performance and results, I wanted to provide an overview of our priorities for the business. As always, we are focused on entering new states at the earliest opportunity. In addition to the recent news in Pennsylvania and Colorado, we are working towards launching online sports betting in other states that have passed laws such as Illinois, Michigan, Tennessee and Virginia. We are also in the process of working with regulators in West Virginia to hopefully launch iGaming. We will continue to invest in our product and technology capabilities as we look to stay ahead of the competition and truly differentiate our products in the market. Our ability to create new content quickly during this period was enabled by the technology and product investments we had previously made. These new products have allowed us to continue to acquire and retain users and we will be monitoring activity on these alternate offerings once traditional sports return. Continued traction and engagement with products centered around eSports and pools based on pop culture could positively affect TAC and LTV over time. Lastly, we will continue to work towards migrating to our own proprietary software and investing in live betting and other unique offerings for American sports. Strategically, we believe this will create a key differentiator for DraftKings, helping us win with consumers and partners and also improving our long term margin profile. With that, I will now turn it over to DraftKings' CFO, Jason Parker. Thank you, Jason. As many of you are aware, we completed our business combination with SVTECH and Diamond Eagle on April 23. Accordingly, our results for the Q1 ending March 31st reflect those of legacy DraftKings and legacy SVTECH, each on a standalone basis. Starting with old DraftKings, despite COVID, we generated $89,000,000 of net revenue in the quarter, which is an increase of 30% versus prior year. Notably, pre COVID prior to March 11th, our revenue was up 60% versus prior year. These results are due to our strategy of launching new states as well as growing revenue in existing states. In this quarter, we were live in 5 new states for online sports betting versus the Q1 of 2019, Indiana, Iowa, New Hampshire, Pennsylvania and West Virginia. Due to COVID, we missed several sizable revenue opportunities attached to Q1 sporting events such as March Madness as well as several weeks of the NBA and NHL seasons. Nevertheless, we are pleased to have generated 30% revenue growth compared to the prior year. Our iGaming business such as online blackjack and roulette was not impacted by COVID-nineteen and exhibited strong results. Additionally, we saw acceleration in iGaming activity after major sporting events stopped and people began looking for alternate forms of entertainment. Despite COVID-nineteen, we experienced strong MUP and ARP MUP growth for the quarter. We grew our MUPs to 720,000 up from 619,000 over Q1 2019, an increase of 16%. And our ArtMUC increased to $41 up from $37 last year, an increase of 12%. We are pleased with our unique payer growth and with the success we have achieved cross selling our customers into new product offerings. Adjusted EBITDA for the quarter was negative $49,500,000 year versus negative $20,400,000 last year. As we expected, our loss widened primarily due to our planned investment in connection with launching our product offerings in 5 new states. These investments in the form of promotions and external marketing are consistent with our new state playbook and are expected to drive long term profitable growth. As we began to see the impact of COVID-nineteen, we reacted quickly and scaled back external marketing spend in the March period. In addition to this investment into new states, we also invested into our organization. More than half of our new headcount was in our product and technology teams to support our continued innovation and focus on the diversification of our products. Our compensation expenses are already beginning to level off as we begin reaching scale throughout different parts of the organization. Our net income of negative $68,700,000 was in line with our own expectations. Now turning to SB Tech. Old SB Tech revenue generated €22,600,000 an increase of 3% versus Q1 2019. Notably, pre COVID prior to March 11th, our revenue was up 19% versus prior year. Adjusted EBITDA was negative €851,000 versus prior year of positive €4,300,000 SB Tech was well on track to achieve positive EBITDA for the quarter until COVID hit and we anticipate a return to profitability once major sports resume. As all of you can appreciate, providing guidance in this environment is difficult for many companies and we are no exception. Given the significant certainty around how COVID-nineteen will impact the sports calendar, we are not providing 2020 revenue guidance. We are preparing internally for all possible scenarios and as we learn more from the leads, we will incorporate our learnings into our forecasting. I want to reiterate something Jason Robins said earlier, which is that based on what we know today, we do not anticipate any reductions to our fiscal year 2021 revenue projections and we continue to believe that the long term growth prospects of the business are strong. Finally, I would like to highlight our strong balance sheet. Coming off of the successful business combination and public listing on April 24, we are well capitalized with nearly $500,000,000 of cash on our balance sheet at close. Where major sports to be on hold for a protracted period of time, we expect to be able to manage our company cash burn to $15,000,000 to $20,000,000 per month. We are able to achieve these low levels of cash burn due to our highly variable cost structure. The majority of our COGS are tied to revenue and external marketing is at our discretion. There is even opportunity to improve that burn rate as we continue to diversify our offerings and grow our iGaming activity. We are concluding our remarks in this period and we will open the line for questions. Our first question is from Thomas Allen with Morgan Stanley. Hey, good morning guys. So Jason Robbins, in your prepared remarks, you talked a little bit about how this year it's likely we're going to have a lot of overlap in the sports calendar. Can you just talk a little bit about how you think that's going to affect your MUP and your ARPU and your and kind of how you acquire typical year? Thanks. Yes. I think thanks, Thomas. So obviously a lot is still moving around. Currently, as an example, the Masters is scheduled for November. So very different overlap in terms of sport calendar, than it would have been had it been played as planned in April. And there will be other examples like that, but hard to know exactly what they will be without all the sports calendars fully developed yet for the year. That said, I think to answer your question assuming there is overlap, usually what we've seen is when there are more popular sports going on overall activity overall revenue goes up. That is something that we see typically for example in Q4 when we have a lot of sporting activity going on each year. So I would expect there'll be similar impacts, but it's very hard to know because the combinations are just totally different than they've ever been in prior years. But generally speaking, I would expect that to create more activity. From a customer acquisition standpoint, I think the team is going to take the same approach they always do, which is every single creative, every single piece of media, everything that we put out there has a target in mind and is tied to the creative and offering that we are going after with that target. And I think that what we'll try to do is just test into everything. Hard to know if it will make sense to build on the example that I mentioned earlier to acquire heavily on Masters when it's overlapping with football, it may be different than when it's overlapping with other sports. So we're going to test everything and we'll learn a lot and who knows how applicable, probably not so much, hopefully not so much those learnings will be for future years. But we're able to actually pretty quickly iterate in year. So a lot of the testing we do is really being optimized moment by moment. So that's the approach we're going to take. Okay. And then in terms of the business that is going on right now, so the strong online gaming business, as well as the more unique businesses like Korean Baseball and the esports. I mean, what are you seeing in those customers? Like how different are they than your legacy customers? And on the iGaming piece, how much of that business is legacy customers versus new customers? Thanks. So across the board, it's mostly our existing customer base. We've had some new customers come in that are kind of just typically we acquire customers throughout the year. And I think probably more due than anything to people being home. We've seen pockets where that's gone up, but hard to know that if there's like a particular new segment or anything that's being attracted to some of these offerings. My guess is it's mostly existing customers and mostly the same profile of customers we had typically been acquiring. Okay. And then just final question on SP Tech, transaction closed a little less than a month ago. But any surprises so far? Anything positive or negative that you've seen in the past month? Thanks. Yes. I wouldn't say that there's anything surprising. But overall, it's been really especially given the challenges of not being able to see face to face, it's been really going about as well as we possibly could have hoped. Very good chemistry between the teams. I think in the world of Zoom, it's almost as good as being in person. So we've gotten spend a lot of video based face to face time together. And I also think there's certain element of just unification that happens when there's a crisis externally and a lot of people feel fortunate that they're part of a business that has, I think really got a strong outlook in terms of the future. And I think a lot of people are looking around at some of their friends and colleagues in other industries that are getting hit pretty hard. And I actually think in some ways that's helped bring the teams together. But overall, it's been a really positive early experience and, I'm very excited and very pleased with the progress we're making. Great. Thank you. Thanks, Tom. Thank you. Our next question comes from Ryan Sigel with Craig Hallum Capital. Please go ahead. Great. Thanks guys for taking my questions and congrats on completing the merger. First off, just on iGaming. So you mentioned an acceleration there. Any way you can break that down kind of between new users playing versus the legacy users that are playing more? And then secondly, what are you seeing in April and thus far in May? So we aren't disclosing any specific IGV metrics. But what I will say is, if you look at the publicly available reports from and Resorts Digital, which is DraftKings' skin partner grew about 100 and and Resorts Digital, which is DraftKings skin partner grew about 126%. So we're very pleased with the growth we're seeing in that product relative to the market. And I think that not surprising, but certainly something that we're continuing to focus on. And I apologize, what was the second question? Just what trends so we've seen New Jersey data for April, but what trends are you seeing thus far in May? Have those continued, accelerated just directionally? Are you talking about in terms of iGaming or just overall for the business? IGaming specifically. Yes. So I think, really it's been a continuation of what we've been seeing in April. I think that there are some things that vary based on seasonality in sports, but iGaming is actually remarkably consistent throughout the year. So I think that really it's kind of been similar to what we've been seeing in April. And then switching over to marketing, so lack of major sports right now, but also we've seen CPMs, Google, Facebook costs temporarily reduced here. So anything you can say about user acquisition in terms of number of new users as well as any metrics realized early, but on CAC to LTV or payback periods or however you want to think about it? So I think right now what we are trying to do is just test everything. And I think that you are right given the reduction in some of the price of media that you're seeing, particularly in some of the big online, some of the big digital channels, There are opportunities that perhaps weren't there before to get more scale and reach. And at the same time, there's less sporting events to advertise. So those two things definitely counterbalance each other. So what we're trying to do is just test into everything, figure out faster than competition, what works and what doesn't and get those learnings into action in the marketplace. And then last one for me and then I'll turn it over to someone else. So in the nontraditional categories you talked about, I mean, esports, pop culture, virtual sports, etcetera. Are there any one that jumps out that people are really enthused about and you're seeing more volume from? And then also how do you think about those categories, the nontraditional sports categories over the next several years? Thanks. I think esports is a notable standout. We launched CS:GO and several others and it's been really strong volume compared to what eSports traditionally had seen. And the other thing I had mentioned are the simulated sports, particularly the simulated games that are using Madden EA's Madden that people are playing fantasy and such with. And to me that's it kind of makes sense, right? There's a lot of football fans that want football year round and it's probably even enhanced by the fact that there's not a lot of other sports on TV and there's a lot of people that are at home with looking to watch things. So I think that that's something that we're keeping an eye on and there could be some potential to extend the NFL season really throughout the year through simulated sports. And think it will also work for other sports. But in particular, I'm excited about the NFL because part of what the NFL's product, it's a scarce product. It's a lot there are a lot fewer NFL games and it's a shorter season than most of the other major sports. So I think there's a lot of potential there. And we do see a lot of people deactivate towards the end of the or after the Super Bowl. And many of them activate sporadically throughout the year on sporting events that are popular like the Masters, for example, start a baseball season brings new activation, March Madness, of course. But there is a group that just loves the NFL and can't get enough of the NFL. So I think if you can find a way to give them that NFL experience more year round, there's something there. Great. Thanks guys and good luck. Thank you. Our next question is from Michael Graham with Canaccord. Please go ahead. Good morning and thank you. My first question is just on the product road map. And can you talk about, as you start to leverage SB Tech's technology into sort of the live or in play bedding, like when does that start to happen? And can you talk about the order of magnitude opportunity in terms of increasing pricing or sort of the effective revenue yield on those bets? So I think right now we're still in the early stages of planning around integration and migration. Really the goal for us is to make sure we have a high quality migration and putting that above really speed is the approach that we're taking. At the same time, we have made good progress. So I think we're probably looking at least mid to late 2021 before you're going to start to see some of the types of things that you mentioned really in action. But it could be longer, but I think that the progress we're making has been very solid so far. So I feel good about that timeline. As far as to say, but our belief economics might be that live betting due to the frequency of it and due to how rapid fire it is that there's sort of less kind of norm market norms around where pricing ends up. If you look at, for example, pregame NFL lines across all the sportsbooks, they're typically not too different. Sometimes you see a 0.5 point difference here or there, slightly different odds. But the market is kind of the market whereas live betting is so rapid fire that there's not time for people to price shop. And so it's not as efficient or perfectly priced of a market. So those types of situations, I think, create opportunity if you have the best algorithms, the best pricing models to differentiate for sure. Okay. Thanks. And then on your relationships for OSB with the in state licensed casino operators, can you just comment on how long those agreements typically last? And do you think as you gain scale, is there opportunity to achieve some leverage there over time? So already I think that from the first deal that we did to now, it's certainly become more clear that we are a preferred partner and I think we've gotten a lot of really positive tailwind from that. All the deals are a little bit different and we don't comment on the specific ones. But really the approach that we take is we want to find the right partners and we want to make sure that we have the best combination of flexibility on our end and security for the long term. So that's the approach that we take when we strike these deals. Okay. Thanks. And then last one for me. Just in thinking about the opportunity to acquire new players, one of the clear areas is sort of the illegal shadow market offshore sites and that sort of thing and the major difference from the players' perspective might be taxation. Can you just talk about how you think about that? And do you react to that or address that with incentives? Or just how does that issue shape your strategy? Thanks a lot. Sure. So, are you referring to taxation from the states or taxation on winning? On winnings. Yes. I mean, our hope is that most people want to pay their taxes and it is illegal to not report winnings. I think a lot of people actually report illegal winnings. Believe it or not, there is an area where you can enter gambling winnings on the IRS form, which includes illegal gambling winnings. So I think that it's hard to say that some extent the types of customers we want are the ones that are following the law and includes paying your taxes. So I think most people feel like if they're fortunate enough to win a large enough sum of money that that triggers a tax reporting requirement that they're happy to pay it. But you're right that there will be some segment that maybe are trying to avoid paying taxes and that's just something we simply can't compete within the illegal market. And it's also I know this isn't what you asked, but it's also important and also why we hope and so far have seen that states are being very reasonable at the tax rate they're charging because that also if not done appropriately can have an impact on how much it costs the customer. And so far the states have generally been sensible about that and we've been able to be competitive with the illegal market on pricing. But that's something that's important to maintain because otherwise, it will be very challenging to disrupt the illegal market. And I actually think that's the more important thing. I think most people, would rather pay their taxes than break the law. But I do think people don't want to get a worse deal or worse price. And I think it's important that we're able to maintain competitive pricing, which will be enabled by sensible taxes and regulation. Okay. Thank you. Thank you. Our next question comes from Greg Gibott with Northland Securities. Please go ahead. Thanks for taking my questions. Good morning. First, can you talk about maybe any early success you're seeing cross selling your DFS users to the new products that kind of just went online this past month in Colorado and Pennsylvania, just opening up for iGaming? And maybe how has early betting been in these states? So iGaming is a little bit different than sports betting in that all of our content is available in Igaming whereas of course without a lot of major sports playing sports betting does not have all the traditional content available. That said, I would say that so far what we've seen has been positive and in line with or better than what we expected. So very early, we literally just launched these products in the last few weeks. But so far, we think what we're seeing is in line with or better than what we expected. Okay. That's good to hear. And then can you maybe discuss a little bit of your proactive marketing measures that you've taken maybe to generate some interest on new users in the platform with not many live sporting events going on? Content in our free to play pools. We have simulated NFL, content in our free to play pools. We have simulated NFL Madden games going on, I think on some days up to 10 to 12 a day. On the weekends, I believe it's at that level. So we've been ramping up the things that are working, but it's been test, test, test and double, triple down on the things that work. And that really starts with testing on the existing traffic and user base. But then once we see what's working, we extend that into the external marketing strategy. So kind of step 3 is really to focus our customer acquisition efforts on the things that we know are already working to engage our existing customer base. Got it. That's helpful. And last one for me. And sorry if I missed this too, but did you comment or at least kind of quantify the impact that you're seeing on payer activity in April May as it kind of compares to the second half of March in any ways with respect to unique payers or average spend per player? We aren't. It's kind of much like the rest of the world. It's been very fluid. So literally 1 week story may be different than the prior week story. So right now, we're kind of waiting to for the dust to settle before we start putting any commentary out there about what we're seeing. Okay, sure. Thanks guys. Thank you. Thank you. Our next question is from Joe Stauff with Susquehanna. Thank you very much. Good morning, everyone. I wanted to ask maybe a longer term question just on the existing DFS business. And I guess an expectation of growth, say, over the next couple of years is for that business to grow top revenue low single digits. And I was wondering if you can give us maybe a little bit more perspective in terms of the development of that market. Is it likely to be more user driven? Is it likely to be more frequency of play? What's the how do you guys think about the growth of that market in particular given your 60% market share? So I think right now, there's a very strong interplay between how that market will look and grow and the pace of state legalization. And specifically what I mean is when, for example, in New Jersey, when we introduced, all of these new products around online, retail sports betting, iGaming, we did see some cannibalization of daily fantasy sports. So the degree to which it will grow, whether it's low double digits, single digits or flat, will depend on how quickly the other states that are in the process of either rolling out sports betting or considering legislation on sports betting move. From a strategic perspective, certainly, it's an important monetization engine for us. So that is always a focus and we're always testing and looking for ways to optimize there. But perhaps more importantly, it's the number one customer acquisition channel for us when we roll out online sports betting, iGaming and other products in states. So, it's really most important to keep users active, keep building that active base by acquiring efficiently onto the DFS platform, and then having really strong data on those customers, so that once we do see online sports betting or other products legalized in their state, we know exactly how to cross sell them. Okay. And as it relates to some of the states and trying to expect or trying to anticipate exactly some of the larger states in particular that you had mentioned earlier in the call. I guess can you give us an update in general about maybe the interaction between your regulatory team in the states and all the things that need to be done in order to be able to launch and go through the compliance process with the states. Has that largely I would imagine to a certain extent that's been largely disrupted, or what is the status of that? And I'm talking about obviously with Tennessee and Michigan and so forth. Trying to anticipate obviously when they would allow you guys or give you the green light to launch? So I'll say a quick word and then I'm going to turn it over to our Chief Legal Officer, Stanton Dodge, see if he has anything to add. But we're continuing to stay away from predictions on that. I think the current environment has made it even more challenging depending on exact date on it. So we're working hard with everyone to try to move as quickly as possible. But, there's also a recognition that there's a crisis going on and this may not be their number one priority at the moment. So we have to balance that. But I think that the approach we will continue to take is as we get enough information to feel confident in putting the kind of date or date range around it, we will absolutely be transparent with that. And at this time, we don't have enough information to do that. Stanton, is there anything I missed that you wanted to add? Yes. I mean, I guess, I would just say generally, every state is different and unique. So there's no real standard playbook of expectations. But generally speaking to get a state up and running you need to pass a law, which in some states requires you to go to the ballot such as Colorado, then you need to get regulations passed and then get licensed. And with respect to whether we've seen any disruption in that, as you're well aware, most legislatures have been out of session, but are seem to be slowly coming back. But much to our delight, Colorado still launched on May 1 in the midst of this and we're also able to get iGaming regulations finalized and get us licensed in Pennsylvania. Okay. And just finally one clarification. On your OSB category, can you just remind us with respect to how much or how much exposure you have to the European Soccer Leagues in particular, the Premier League, which may or may not start up sometime in June. I was just curious about that. So from the DraftKings perspective, the old DraftKings perspective, it's a meaningful sport, but not a significant portion of our revenue each year. On the old SB Tech side, given that the vast majority of their business is international, it's more important. It's almost 2 thirds for them. So it is very significant over there. So we'll see a meaningful impact on how that all shakes out to the B2B revenues. But I do not expect that significant of an impact to the B2C revenues. Thanks very much. Thank you. Our next question is from Jeff Kelly with Oppenheimer. Please go ahead. Great. Thanks for taking my question. Just back to the live betting, I guess with the lack of sports and less velocity on your systems, I mean, have you been able to accelerate attendance, does this open up opportunities for more partnership opportunities to help them generate more revenue or make up lost revenue from fans not attending? Great question. So on the first topic, we have definitely been doubling down in terms of our product roadmap, our long term product roadmap of which live betting is a clear and important part of it. Perhaps you could argue on the sports book product the most important part. We also have been balancing that with utilizing this opportunity to expand our offerings on new sports and daily fantasy sports, pushing out more esports and other things. So it's been a combination of content expansion due to sort of the lack of traditional sports content out there along with progress against our medium to long term roadmap on things like live betting, which really won't start to in a visible way to the consumer really take shape until probably second half of next year. But I have been very pleased with the progress we've made across all of these things. I think the team has really stepped up. And I think in some ways we're more productive than ever right now. So we're making a lot of progress across a lot of different areas. And then I apologize, what was the second question? Working closer with the leagues, just trying to help them generate more revenue in game wagering with lack of attendance? So the leagues are certainly just like the whole sports world evaluating what this all means for them. Certainly a lot of revenue depending on the sports, depending on the team, it varies, but a lot of revenue does come from in stadium and they're contemplating if there were to be some kind of reduction in that revenue, what could that possibly be replaced with or mitigated by. So those are discussions we always have. And I think this particular situation, the pandemic has in some ways accelerated interest in certain areas. As an example, I think there's been more significant interest in the simulated sports products that I was referencing earlier than there had been in the past because the thought in the league's minds are, hey, if we do have to postpone or cancel or shift around the calendar, how do we engage fans? I think there's been more focus on tying the digital experience to the television broadcast because the thought is that more fans than ever could be consuming this content from home. So like everyone, I think there's still a lot of unknowns that I think will kind of affect where things in terms of potential partnership opportunities steer towards. But just like any situation where there's major shock or disruption, a lot of things that maybe were less interesting or not really on the table before are now potentially on the table. So we're trying to be at the center of all those discussions and be helpful wherever we can. And then just one more question for me. I know it's still hard to make predictions what's going to happen, but it does seem that the NBA might permanently push their start of the season to Christmas. Any thoughts on that and how that could impact financial performance? First, and this is just personal opinion. I love the idea of the NBA starting on Christmas just as a fan. I feel like that's the day every year. It's almost like Thanksgiving with football that I think of NBA as the major sport and as excited as I think people are for the start of the season anyway, it's still early in the NFL NFL season when NBA typically starts versus starting in late December might actually, I think create a bit more focus on the NBA versus still being in the thick of the NFL, for example, if your favorite NFL team is may already be out of it by the time Christmas hits. And that's not the case sometimes when it's mid or late October when the NBA traditionally has started. So I personally love the idea. As far as impact on revenues, it's really hard to say. It's unprecedented. We've never had that situation before. And my baseline expectation is I don't know why it would be that different. It's just basically pushing the same calendar out a month or 2. But it's hard to know because it does change where the overlap is. And more specifically, assuming that the calendar is not condensed that the idea of starting on Christmas means you play more deep into the summer, there will be more overlap with baseball. There's also, and I think this could be a positive, there's just a lot less going on in the sports world during the summer than there is in the fall. So, in some ways, there might be more incrementality to having the playoffs for the NBA and the season kind of sorry, the regular season games for NBA in the summer and then the playoffs in the summer as well, could potentially be less competitive with a lot of the other sporting events that are happening during the fall and that could create some positive impacts. But really hard to say, we're all going to have to observe how the data comes in if they do make that change. And once we do, we'll be pretty quick at being able to update our forecasts. And right now, it's just the best educated guess and we don't even really know what the schedule is going to look like. So even on that front, it's still guessing game. Thank you. Thank you. And now I would like to turn the call back to Jason Robins for his final remarks. Thank you again for joining us today for our first earnings call. We appreciate your thoughtful questions and look forward to continuing this dialogue with everyone. As discussed earlier, we are very pleased that our product and technology investments have created avenues to continue to engage our customers while most major sports are on hiatus. And I am very proud of our employees for their customer centric approach to designing and marketing these new offerings. Furthermore, I am very confident that regardless of how long COVID-nineteen disrupts our daily lives, DraftKings is well positioned to continue innovating on product, building market share and working with policymakers to expand the addressable market. We appreciate the support our shareholders have placed in us and we hope all of you are as excited as we are to watch our vision unfold over the coming years. We are also really excited about executing it. Thanks again. I hope everyone is staying safe and well during these challenging times, and we look forward to speaking with you again soon. And ladies and gentlemen, thank you for participating in today's program. This concludes it and you may now disconnect.