September 30, 2020 Sports Betting, Online, Interview

DraftKings CEO Special: Jason Robins – Building an environment for success

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From a home office in a spare bedroom to the multi-billion-dollar public corporation it is today, CEO Jason Robins tells Tim Poole the DraftKings story.

You don’t have to look much further than Jason Robins’ love of sport for his inspiration from a young age. “I was a big sports fan from as early as I can remember,” the DraftKings CEO tells Gaming America, “I can’t remember watching TV without sport.” Combining that love with his passion for mathematics and business, Robins and his two fellow co-founders, Matt Kalish and Paul Liberman, are today synonymous with the daily fantasy sports and sports betting verticals.

It’s a career path that shouldn’t have surprised anyone, considering Robins was part of over “a hundred fantasy leagues” in college. “I just loved the combination of sports and statistics – and it was social, which I liked.” During his childhood, Robins recalls his “fun way of connecting with statistics,” encouraged by his parents, both teachers. Before fantasy sports, Robins would read the box scores in the newspaper and memorize stats from the night before, getting his mother and father to test his memory the next morning.

The exercise was indicative of “somebody who’s always keeping busy and likes to do stuff” – even today. When Robins isn’t working, he’s trying to experience different things, playing tennis and spending this summer out on the water being two examples. “It’s part of my personality; I get bored sitting still,” he remarks. “It sounds like a cliché but the most important thing is to do what you love. When you do something you love it doesn’t feel so much like work.”

I remember hearing in the mid-90s about this guy selling books on the internet and it was going to be a big deal. I just loved the idea of disrupting the way people would consume and I knew the internet was going to be such a vehicle for that.

This perhaps explains why, in a previous interview with Gaming America, Robins spoke of working 70-100 hours a week throughout his career. And yet it could have been very different for him were it not for his love of business. Holding an interest during high school in how lawyers framed arguments, the DraftKings CEO considered studying law. He soon realized it wouldn’t be the right fit. “The biggest reason being I don’t think I could sit and read several hundreds of pages and legal briefs without my head falling off,” he admits. Pursuing something more strategic, Robins set off on the road towards a life in business and something which was new to many at the time: the internet.

Recounting the period when the online realm started to take off, Robins says he watched the Amazons of the world closely as they grew. In fact, Amazon CEO Jeff Bezos attended Miami Palmetto High School, the rival high school of Robins’ own Miami Killian. “I remember hearing in the mid-90s about this guy from Palmetto selling books on the internet and it was going to be a big deal,” he says. “I just loved the idea of the internet, being an entrepreneur, disrupting the way people would consume, and I knew the internet was going to be such a vehicle for that.”

Robins’ interest in the practical side of business even led him to consider dropping out of college – before a timely intervention from his father. “My father gave me a lecture… It might have been a little more than advice from my dad,” he admits. “He might have said you’re going to have to find someone else to pay for everything if you drop out. He was an academic and his belief was always go to school and then do more school. He always thought I would go to college, get a professional degree and that’s how you create a good life for yourself.”

While Robins temporarily questioned the benefits of a classroom education, his father’s advice kept him in college, for which he’s thankful. “About a year or two after this whole discussion, the bubble burst and a lot of these internet start-ups that were wall-to-wall at my career fair in college, they were all gone and replaced by banks and consulting firms,” he says. “So thankfully I didn’t go at the wrong time, chose to finish school and went on to work for a company called Capital One. Everything I learned over the next decade working in corporate America was incredibly important, especially the contacts I made: my two co-founders and many of the people we have at DraftKings today.”

Looking back, he is appreciative of having “extremely supportive” parents who “also knew when to wave the stick.” With his dad a college professor and mom an elementary school teacher, a lot of how and where Robins grew up influenced him. He did not, for instance, come from a life of luxury and himself enjoys teaching, having taught classes at various stages of his career.

“A lot of my family values are a big part of how I was brought up,” Robins explains. “I was brought up with this mentality that you’ve got to earn and work for everything you get. When I wanted a car, my parents said you’re going to get a job, earn some money and buy it yourself. One thing I always had ingrained in me from an early age is nothing’s handed to you – sometimes it’s not the smartest or who’s got the most talent but actually who works the hardest.”

I had great advice years ago – well before DraftKings – from one of my business mentors. Everyone talks about changing the world but more important is to figure out where the world is going and getting there first. Figuring out where things are going and positioning the company to be successful in those environments is important.

Considering the sports buff he is, it’s unsurprising to see Robins contextualize his parents’ advice by comparing athletes like Michael Jordan, Tom Brady and Jerry Rice; Jordan is now an advisor to the board and investor in DraftKings. “What separates these people from being a very good player to all-time greats was the fact they not only had talent but they were willing to outwork anyone around them. That’s a rare combination. I never had anywhere near as much talent as those guys or anyone in my field, so I had to work even harder.”

Heeding the lessons of his upbringing and education, Robins spent five years in marketing and analysis at Capital One after graduation. He then spent a further four years at Vistaprint, specializing in marketing and analytics. In 2012, though, he, Kalish and Liberman made the most significant step of their careers, founding the daily fantasy sports site DraftKings. As it says on their company bio, the trio “thought season-long fantasy was great. But daily fantasy could be better.” Eight years later, it’s safe to say America agreed.

“I remember when it was my two co-founders and me in one of their spare bedrooms in Watertown, Massachusetts,” Robins remembers. “Now we have over 2,000 people across multiple continents. From day one, we were very focused on the culture we were looking to build. Our passion is still there; there’s just a tremendous amount of passion for the product and the company – more than anything I’ve ever experienced. I’ve worked at great companies before but never at a company where there was such passion for a product.”

Overall, however, the DraftKings CEO can’t deny how very different both his role and the company have become. That much is inevitable considering where the operator sits today. Following the overturning of PASPA in May 2018, DraftKings pivoted toward sports betting (while maintaining its significant fantasy revenue streams) and launched online wagering in several states. In key states like New Jersey, DraftKings became one of the market leaders, going on to open up retail venues, and expand into online and live casino. The ultimate coup, though, was the operator’s acquisition of supplier SBTech, in a deal that also took DraftKings public in April 2020 with an estimated market capitalization of $3.3bn. By August, the company’s market cap was valued at $12bn.

“The things I spend time on have changed a lot,” Robins explains. “In the early days I was very involved in the product and the marketing. It was really my two co-founders and I who created a lot of the initial things in those categories. I still feel a lot of passion for the product and the marketing but I understand my role has had to evolve. Thankfully, I have really great people who oversee those two areas – my two co-founders: one of them oversees product and technology, Paul; the other oversees marketing, analytics and operations, Matt. So it’s been very fortunate to me to have two people that I trust very much and can lean on.”

Equally, Robins is full of praise for the team underneath the co-founders, which includes former colleagues at Capital One and Vistaprint who have grown to oversee nine-figure budgets in marketing and operations. “It’s been fun to watch these people grow; fun to watch them build their teams out,” he remarks. “While I certainly would like to spend more of my personal time on the product, it’s great to have a faithful team that understands the vision, can execute and come up with great ideas themselves.”

But for Robins, going public hasn’t yet altered his role as significantly as he expected. While there are obvious differences for him, such as being very careful about what he says now that DraftKings’ stock is publicly traded, he expresses a surprised tone when commenting, “It’s not really that different.” Fundamentally, Robins believes this is because, unlike many that go public for the first time, DraftKings was already regulated by several states, meaning the organization had built up suitable communications, legal and compliance functions beforehand.

I think that’s really the biggest thing for me when I think about growing as an executive. How can I continue to create the best place for the best people to work? Not to say it’s that simple but, in some ways, it is. If you have the best people, usually you create the best things.

While going public was not a specific initial aim for Robins, as DraftKings grew, it became clear to him a crossroads was approaching. The company would either have to go public or it would make sense to sell it. Trying to compete as a private company, given the competitive nature of the online gaming space, was “not the best way to set ourselves up for success.” He adds: “To me, selling now felt like: you don’t sell when you’re at the beginning of the curve on the hockey stick. On my end, I try to keep objective all the time and think about what’s best for the company, the shareholders and the employees. After reviewing a lot of different options, we decided going public was best for everybody and so far it’s going pretty well. Hopefully it’ll keep doing so.”

With the COVID-19 pandemic effectively shutting land-based gaming down for a significant period this year, DraftKings conversely saw GAAP Q2 revenue of $70.9m, up 24% year-on-year, (pro forma revenue of $75m). Globally, as well as in the US, online gaming has boomed, with more players at home seeking out entertainment options during national lockdowns. Indeed, less than 1-2% of DraftKings’ overall business is retail-based says Robins.

The “counterbalance” for DraftKings, however, was the halt to the sporting calendar. As sport has returned, the “pent-up demand and natural stay-at-home tendencies” have led to hope of a strong H2 for the operator. “We’re certainly starting to see that in the metrics of the last months or two,” Robinssays. “Obviously, though, keeping people home can disrupt the sports season, so hopefully everybody will figure out a way to continue to play and do it in a safe manner.”

But despite those sporting cancellations, the pandemic has affected DraftKings far less than the Atlantic City Boardwalk or the Las Vegas Strip. As the company looks back on 2020, its IPO and acquisition of SBTech will have left a far more significant mark on its financial statements than COVID-19. As you’ll read in Gaming America’s interview with MGM Resorts International CEO Bill Hornbuckle on page 32, even he has commented on the rise of DraftKings, recognizing the competition it provides in the online and sports wagering sectors. So exactly how far can DraftKings go?

“I had great advice years ago – well before DraftKings – from one of my business mentors,” Robins explains. “Everyone talks about changing the world but more important is to figure out where the world is going and getting there first. Figuring out where things are going and positioning the company to be successful in those environments is important.”

From a strategic perspective, Robins highlights the company’s focus on product. He disagrees with others in the industry he’s heard say product “doesn’t matter.” That school of thought places a huge focus on marketing and, although Robins acknowledges its importance (as well as DraftKings’ own marketing spend), he believes user experience is what ultimately creates loyalty. This is especially true, he says, in an entertainment category where people have choices on how to spend their money. He adds: “It’s crazy to say product doesn’t matter.”

As for Robins himself, he emphasizes the people around him: “I think anyone goes as far as the people around them enable them to go. If the ambitions we have for the company are to be achieved, that means we had a lot of really great people that helped. That’s the number one thing for me. If I’m able to continue to grow in my role as an executive, I’ve got to keep fostering an environment where there’s great talent around that wants to be there and has an environment to be successful in.”

He concludes: “I think that’s really the biggest thing for me when I think about growing as an executive. How can I continue to create the best place for the best people to work? Not to say it’s that simple but, insome ways, it is. If you have the best people, usually you create the best things.”

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