What changed in this filing

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Item 1. Business

2024-02-16 compared with 2023-02-17 · 49 added, 87 removed, 200 unchanged (40% of the section changed)

We are a digital sports entertainment and gaming company.

We provide users with online sports betting (“Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as DraftKings Marketplace (“Marketplace”), retail sportsbook, media and other consumer product offerings.

We provide users with online sports betting (“Sportsbook”), online casino (“iGaming”) and daily fantasy sports (“DFS”) product offerings, as well as retail sportsbook, media and other consumer product offerings.

We are also involved in the design and development of sports betting and casino gaming software for online and retail sportsbooks and iGaming operators.

On May 5, 2022, we acquired GNOG in an all-stock transaction to enable us to leverage Golden Nugget’s established brand to broaden our reach into new customer segments and enhance the combined company’s iGaming product offering through our vertically-integrated technology stack and GNOG’s unique capabilities, including live dealer.

Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences.

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Together, these investments have enabled us to create a leading product built on scalable technology, while attracting a user base that has resulted in the rapid growth of our business.

Our priorities are to (a) continue to invest in our product offerings, (b) launch our product offerings in new jurisdictions, (c) create replicable and predictable state-level unit economics in sports betting and iGaming and (d) expand our other online consumer product offerings.

When we launch Sportsbook and iGaming product offerings in a new jurisdiction, we invest heavily in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.

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We also expect to improve our profitability over time as our revenue and gross profit expand as states mature, and our variable marketing expenses and fixed costs stabilize or grow at a slower rate.

Our path to profitability is based on the acceleration of positive contribution profit growth driven by increased revenue and gross profit generation from ongoing efficient customer acquisition enabled by the transition from local to regional to national advertising, strong customer retention, improved monetization from frequency and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions.

On a consolidated Adjusted EBITDA basis, we expect to achieve profitability when total contribution profit exceeds the fixed costs of our

business, which depends, in part, on the percentage of the U.S.

Our path to profitability on an annual basis is based on the acceleration of positive contribution profit growth driven by increased revenue and gross profit generation from ongoing efficient customer acquisition enabled by the transition from local to regional to national advertising, strong customer retention, improved monetization from frequency and higher hold percentage, as well as scale benefits from investments in our product offerings and technology and general and administrative functions.

On a consolidated Adjusted EBITDA basis, we expect to achieve profitability on an annual basis when total contribution profit exceeds the fixed costs of our business, which depends, in part, on the percentage of the U.S.

adult population that has access to our product offerings and the other factors summarized in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.

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Refer to the section entitled “Key Performance Indicators” within Management’s Discussion and Analysis of Financial Condition and Results of Operations included herein for additional information regarding our MUPs and ARPMUP.

Business Combinations

Merger with Diamond Eagle Acquisition Corp.

and Acquisition of SBTech (Global) Limited

We were incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of our legal predecessor, Diamond Eagle Acquisition Corp.

(“DEAC”), a special purpose acquisition company.

On April 23, 2020, DEAC consummated the transactions contemplated by the Business Combination Agreement dated December 22, 2019, as amended on April 7, 2020, (the “DEAC Business Combination”) and, in connection therewith:

DEAC merged with and into Old DraftKings, whereby Old DraftKings survived the merger and became the successor issuer to DEAC;

Old DraftKings changed its name to “DraftKings Inc.”;

Old DraftKings acquired DK Crown Holdings Inc.

(formerly DraftKings Inc.), a Delaware corporation (“DK DE”), by way of a merger;

Old DraftKings acquired all of the issued and outstanding share capital of SBTech (Global) Limited (“SBTech” and, such acquisition, the “SBTech Acquisition”);

DEAC’s publicly traded units (Nasdaq:

DEACU) separated into their components of publicly traded DEAC Class A common stock (Nasdaq:

DEAC) and DEAC public warrants (Nasdaq:

DEACW), and each outstanding share of DEAC Class A common stock was exchanged, on a one-for-one basis, for shares of Old DraftKings’ Class A common stock and all of DEAC’s outstanding warrants became warrants to acquire shares of Old DraftKings’ Class A common stock.

Upon consummation of the DEAC Business Combination and the transactions contemplated thereby:

(i) DK DE and SBTech became wholly owned subsidiaries of Old DraftKings;

(ii) beginning April 24, 2020 (the “SBTech Closing Date”), Old DraftKings’ shares of Class A common stock traded on the Nasdaq Global Select Market (the “Nasdaq”) under the ticker symbol “DKNG”, and Old DraftKings’ warrants traded on the Nasdaq under the ticker symbol “DKNGW”.

On July 7, 2020, Old DraftKings redeemed all of its outstanding public warrants that had not been exercised as of July 2, 2020, and, on July 20, 2020, Old DraftKings delisted its publicly traded warrants (the “Warrant Redemption”).

Following the Warrant Redemption, only Old DraftKings’ Class A common stock continued to be traded on the Nasdaq.

Acquisition of Golden Nugget Online Gaming, Inc.

As further discussed in this Annual Report, on the GNOG Closing Date, Old DraftKings consummated the acquisition of GNOG, pursuant to the GNOG Merger Agreement.

In connection with the GNOG Transaction, Old DraftKings undertook a holding company reorganization whereby a new holding company, New Duke Holdco, Inc., a Nevada corporation (“New DraftKings”), became the going-forward public company and the direct parent company of both Old DraftKings and GNOG.

New DraftKings was renamed “DraftKings Inc.” on the GNOG Closing Date.

Our Product Offerings

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For Sportsbook and iGaming, we operate under both our DraftKings brand and our GNOG brand.

We consider these three product offerings to be of a similar product class, and together they accounted for 94.0%, 88.4%, and 84.2% of DraftKings’

revenues for the fiscal years ended December 31, 2022, 2021 and 2020, respectively.

We consider these three product offerings to be of a similar product class, and together they accounted for 96%, 94%, and 88% of DraftKings’ revenues for the fiscal years ended December 31, 2023, 2022 and 2021, respectively.

DFS, which was our sole product offering until 2018, historically drove our results;

however, since we launched Sportsbook and iGaming in 2018, states where Sportsbook and iGaming are operating have accounted for a rapidly growing proportion of our users, which has contributed, in part, to our revenue growth.

In addition to our three online gaming product offerings, we also offer non-fungible tokens (“NFTs”) on Marketplace, NFT-based DFS-style contests, gaming software services, and advertising and sponsorship packages to targeted advertisers across our DFS product offering, free games, and media content.

In addition to our three online gaming product offerings, we also offer non fungible tokens (“NFTs”) on DraftKings Marketplace (“Marketplace”), NFT-based DFS-style contests, gaming software services, and advertising and sponsorship packages to targeted advertisers across our DFS product offering, free games, and media content.

Below is a description of each of our primary product offerings and services:

Online Gaming Product Offerings

Sportsbook - Sports betting involves a user placing a bet by wagering money on an event at some fixed odds (“proposition”) determined by DraftKings.

Sportsbook - Sportsbook engages consumers in their sports viewing experience.

Sports betting involves a user placing a bet by wagering money on an event at fixed odds (“proposition”) determined by DraftKings.

In the event the user wins, DraftKings pays out the bet.

Sportsbook engages consumers in their sports viewing experience.

Our Sportsbook revenue is generated by setting odds that are intended to provide a built-in theoretical margin in each proposition offered to our users.

While the actual betting patterns of our users and outcomes of individual events may cause volatility in our revenue, we believe we can deliver a stable betting win margin over the long term.

Revenue is realized by taking the settled handle for betting markets that have been resolved and subtracting the payouts for these betting markets such that the difference is the gross revenue, or “hold.”

Our Sportsbook revenue is generated by setting odds that are intended to provide a built-in theoretical margin for each proposition offered to our users.

While the actual betting patterns of our users and outcomes of individual events may cause short-term volatility in our revenue and profitability, we believe we can deliver a stable and attractive betting win margin over the long term.

Revenue is realized by taking the settled handle for betting markets that have been resolved and subtracting the payouts for these betting markets such that the difference is our gross revenue, or “hold.”

iGaming - iGaming, or online casino, product offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat and slot machines.

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Our iGaming product offering consists of a combination of games that we have built in-house and licensed content from suppliers such as International Gaming Technology, iForium, Light & Wonder Inc., Spin, and Evolution for live dealer services.

The latter are subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the net gaming revenue generated from their respective casino games played utilizing our technology.

The latter are subject to standard revenue-sharing agreements specific to each supplier, whereby the supplier receives a percentage of the gaming revenue generated from their respective casino games played utilizing our technology.

In exchange, DraftKings receives a limited license to offer the games to users in jurisdictions where use is approved by regulatory authorities.

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Our revenue from DFS consists of the difference between the entry fees collected and the amounts paid out to contestants as prizes in a period.

We also offer NFT-based DFS-style contests through our Reignmakers franchise.

Other Consumer Product Offerings

DraftKings Marketplace - We launched DraftKings Marketplace during the third quarter of 2021.

Marketplace is a NFT ecosystem designed for mainstream accessibility that offers curated initial NFT drops (“Primary Sales”) and allows owners of NFTs on Marketplace to list their NFTs for sale to other Marketplace customers (“Secondary Sales”).

Once marked for sale with a chosen selling price, the NFT will appear on the Marketplace secondary market.

Customers can browse all available NFTs within the secondary market and can opt to purchase based on the selling price.

The revenue we earn on Primary Sales and Secondary Sales is based on a specific percentage of the gross value of each such sale.

Retail Sportsbook - In addition to our online Sportsbook, we also maintain limited retail distribution in twelve states , in which our retail revenue is subject to individual agreements with a land-based casino partner (a “skin”) that provide for a revenue share.

Retail distribution leverages the foot traffic for existing casino properties to convert their customers to engage with our retail sportsbook while on the premises.

Similar to our online Sportsbook, retail sportsbook revenue is realized by taking the settled handle for betting markets that have been resolved and subtracting the payouts for these betting markets such that the difference is the gross revenue, or “hold.”

Retail Sportsbook - In addition to our online Sportsbook, we also maintain retail distribution in thirteen states , in which our retail revenue is subject to individual agreements with third parties that provide for a revenue share.

Retail distribution leverages the foot traffic for existing casino and other properties to convert their customers to engage with our retail sportsbook while on the premises.

Media, Advertising and Sponsorship - Our advertising packages range from standard ad placements and background ad placements to more high-touch integrations, such as sponsored DFS contest series or custom site takeovers.

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Each time a consumer sees an advertisement while playing, watching, reading or listening to a piece of content or playing a game, an impression is counted.

DraftKings Marketplace - We launched DraftKings Marketplace during the third quarter of 2021.

Once marked for sale with a chosen selling price, the NFT will appear on the Marketplace secondary market.

Customers can browse all available NFTs within the secondary market and can opt to purchase based on the selling price.

The revenue we earn on Primary Sales and Secondary Sales is based on a specific percentage of the gross value of each such sale.

We also offer NFT-based DFS-style contests through our Reignmakers franchise.

Gaming Software Services

We supply business-to-business sports betting and iGaming services globally, primarily in Europe and the United States, for various gaming operators and government-run lotteries.

Our gaming software services are primarily comprised of the operations of SBTech, which we acquired on April 23, 2020, with principal activities involving the design and development of sports betting and casino gaming software.

Our gaming software services are primarily comprised of the operations of SBTech (Global) Limited (“SBTech”), which we acquired on April 23, 2020, with principal activities involving the design and development of sports betting and casino gaming software.

Our services are delivered through our proprietary software, and our complementary service offerings include trading and risk management and support for reporting, customer management and regulatory reporting requirements.

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We leverage our return-on-investment models that are based on gross profit paybacks, lifetime value, player segmentation and customer and revenue retention to determine appropriate promotional levels.

Our business experiences seasonality based on the relative popularity of certain sports.

Our business experiences seasonality primarily based on the relative popularity of certain sports.

Although sporting events occur throughout the year, our users are typically most active in the fourth quarter due to the overlapping calendars of the NFL and NBA seasons, which are the most popular sports on our Sportsbook product offering.

Our Technology and Product Development

In order to build the best real-money games and product offerings, we have invested in core disciplines across our technology, analytics and marketing, which have allowed us to rapidly bring innovative new experiences to market while gaining a unique understanding of our users.

In order to build the best real-money games and product offerings, we have invested in core disciplines across our technology, analytics and marketing, which have allowed us to rapidly innovate and bring new experiences to market while gaining a unique understanding of our users.

The result has been leadership in our industry, fueled by a brand reputation and a depth of user trust that we believe has set us apart from our competitors.

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Our DraftKings-branded product offerings are bound together with a common account management and regulatory compliance service and can be accessed with the same account and wallet.

Across our product offerings, we have endeavored to own the technology in-house for any critical component and to utilize a combination of new technologies, including data science and machine learning, to optimize conversion and efficiency.

Across our product offerings, we have endeavored to own the technology in-house for any critical component and to utilize a combination of technologies, including data science and machine learning, to optimize conversion and efficiency.

DraftKings’ core product offerings are built on top of integrated, proprietary account management technology.

This technology provides our users with access to their account history across all DraftKings-branded product offerings and a uniform identity verification system, which is critical to enabling seamless navigation from our national DFS audience to our DraftKings-branded Sportsbook and iGaming product offerings, as existing DFS contestants need not manage a separate set of account credentials and payment methods for each product offering.

This technology provides our users with access to their account history across all DraftKings-branded product offerings and a uniform identity verification system, which is critical to enabling seamless navigation from our national DFS audience to our DraftKings-branded Sportsbook and iGaming product offerings and vice versa, as existing users need not manage a separate set of account credentials and payment methods for each product offering.

Our users also enjoy a highly functional wallet which, in many cases, permits user funds to flow freely from product offering to product offering.

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Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the performance of different marketing channels, predicted lifetime value and behavior of users across various product offerings, the location of our users and our estimate of when enabling legislation and regulations for sports betting and iGaming may come to fruition.

Where paid marketing is concerned, we leverage a broad array of advertising channels, including television, radio, social media platforms such as Facebook, Instagram, Twitter and Snapchat, affiliates and paid and organic search, and other digital channels such as mobile display.

Where paid marketing is concerned, we leverage a broad array of advertising channels, including television, radio, social media platforms such as Facebook, Instagram, X and Snapchat, affiliates and paid and organic search, and other digital channels such as mobile display.

For Sportsbook and iGaming, these efforts are concentrated within the specific jurisdictions that have passed enabling legislation and regulations, and in which we operate or intend to operate (which vary on a per-offering basis).

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League, Team, and Media Relationships - We engage in relationships with sports leagues, including the NFL, NBA, MLB, NHL, and UFC, and professional sports teams to improve our brand awareness, improve user retention and create unique collaborative integrations for our users.

We also engage in relationships with media partners.

In September 2020, we entered into a multi-year agreement with ESPN to become a co-exclusive sportsbook link-out provider and exclusive daily fantasy sports link-out provider across a selection of ESPN’s digital properties.

Under the agreement, we are able to advertise our product offerings across ESPN’s digital platforms and through integrations into ESPN programming.

In September 2022, Amazon selected DraftKings as a sponsor and official pre-game odds provider for Thursday Night Football (“TNF”) on Prime Video.

Under the multi-year agreement, TNF on Prime Video will feature DraftKings integrations in its live pregame, including odds and additional sports betting insights, as well as other TNF-themed offerings.

We also engage in relationships with media partners including Amazon, which selected DraftKings as a sponsor and official pre-game odds provider for Thursday Night Football (“TNF”) on Prime Video in September 2022.

Under the multi-year agreement, TNF on Prime Video will feature DraftKings integrations in its live pregame, including odds and

additional sports betting insights, as well as other TNF-themed offerings.

We also have established partnerships with media entities like Meadowlark Media and iHeartMedia as we seek to grow our audience of U.S.

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The specific industries in which we operate are characterized by dynamic customer demand and technological advances, and there is significant competition among online gaming and entertainment providers.

A number of established, well-financed companies producing online gaming and/or interactive entertainment products and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

There has also been consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could result in the formation of

larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand product offerings and broaden their geographic scope of operations.

A number of established, well-financed

companies producing online gaming and/or interactive entertainment products and services compete with our product offerings, and other well-capitalized companies may introduce competitive services.

There has also been consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain larger market share, expand their product offerings and broaden their geographic scope of operations.

Human Capital Resources

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Our paid time off programs enable our workforce to enjoy personal time away from their job responsibilities.

We continue to take action to protect our employees’ health in response to the COVID-19 pandemic.

Since the second quarter of 2022, our primary offices, including our corporate headquarters in Boston, Massachusetts, have been re-opened with many of our employees returning to work onsite in various capacities.

We will continue to monitor developments relating to disruptions and uncertainties caused by COVID-19 and the emergence of additional variants or strains thereof.

Government Regulation

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In order to operate in certain jurisdictions, we must obtain either a temporary or permanent license or determination of suitability from the responsible authorities.

We seek to ensure that we obtain all necessary licenses to develop and put forth our product offerings in the jurisdictions in which we operate and where our users are located.

We seek to ensure that we obtain all necessary licenses and approvals to develop and put forth our product offerings in the jurisdictions in which we operate and where our users are located.

Gaming laws in certain jurisdictions require DraftKings Inc., and each of its subsidiaries engaged in gaming operations, certain of our directors, officers and employees, and in some cases, certain of our stockholders, to obtain licenses from gaming authorities.

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Of those 32 jurisdictions, 31 are live, and DraftKings operates in 24 of them.

As of February 15, 2023, we operate our online sports betting product offering via the DraftKings Sportsbook app in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Arizona Department of Gaming, Colorado Limited Gaming Control Commission, Connecticut State Department of Consumer Protection, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Kansas Racing and Gaming Commission, the Louisiana Gaming Control Board, the Maryland Lottery and Gaming Control Agency, the Michigan Gaming Control Board, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the Ohio Casino Control Commission, the Oregon State Lottery, the Pennsylvania Gaming Control Board, the Tennessee Sports Wagering Advisory Council, the Virginia Lottery, the West Virginia Lottery, and the Wyoming Pari-Mutuel Commission.

Additionally, DraftKings operates its online sports betting product offering in the Canadian province of Ontario pursuant to a license granted by the Alcohol and Gaming Commission of Ontario.

In addition to our DraftKings-branded sports betting product offering, we operate our GNOG-branded online sports betting product offering via the GNOG Sportsbook app in Arizona, Michigan, New Jersey, and West Virginia, pursuant to our licenses granted by the respective state’s gaming or lottery commission as described above.

We also operate retail sportsbooks in Colorado, Connecticut, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, New York and Washington pursuant to state and/or tribal regulatory regimes.

As of February 13, 2024, we operate our online sports betting product offering via the DraftKings Sportsbook app in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, West Virginia, Wyoming and Ontario, Canada pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Arizona Department of Gaming, State of Colorado Department of Revenue Division of Gaming, State of Connecticut Department of Consumer Protection, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Kansas Racing and Gaming Commission, the Louisiana Gaming Control Board, the Maine Gambling Control Unit, the Maryland Lottery and Gaming Control Agency, the Massachusetts Gaming Commission, the Michigan Gaming Control Board, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the New York State Gaming Commission, the Ohio Casino Control Commission, the Oregon State Lottery, the Pennsylvania Gaming Control Board, the Tennessee Sports Wagering Council, the Vermont Department of Liquor and Lottery, the Virginia Lottery, the West Virginia Lottery Commission, and the Wyoming Gaming Commission.

Additionally, DraftKings operates its online sports betting product offering in the Canadian province of Ontario pursuant to a registration approved by the Alcohol and Gaming Commission of Ontario.

In addition to our DraftKings-branded sports betting product offering, we operate our GNOG-branded online sports betting product offering via the GNOG Sportsbook app in Arizona and New Jersey pursuant to our licenses granted by the respective state’s gaming or lottery commission as described above.

We also operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey and Washington pursuant to state and/or tribal regulatory regimes.

On May 14, 2018, the U.S.

Supreme Court issued an opinion determining that the Professional and Amateur Sports Protection Act (“PASPA”) was unconstitutional.

PASPA prohibited certain states from “authorizing by law” any form of sports betting.

PASPA prohibited certain states from “authorizing by law” any form of

sports betting.

In striking down PASPA, the U.S.

Supreme Court opened the potential for state-by-state authorization of sports betting.

Several states and territories, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Illinois,

Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Virginia, Washington, Washington, D.C., West Virginia, and Wyoming already have laws authorizing and regulating some form of sports betting online or in brick-and-mortar establishments.

Several states and territories, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, Washington, D.C., West Virginia, and Wyoming already have laws authorizing and regulating some form of sports betting online or in brick-and-mortar establishments.

Sports betting in the United States is subject to additional laws, rules and regulations at the state level.

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Any change in existing regulations or their interpretation, or the regulatory climate applicable to our products and services, or changes in tax rules and regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.”

As of February 15, 2023, we operate our DraftKings-branded iGaming product offering in New Jersey pursuant to a transactional waiver granted by the New Jersey Division of Gaming Enforcement, in Connecticut pursuant to a license granted by the Connecticut State Department of Consumer Protection, in Michigan pursuant to a license granted by the Michigan Gaming Control Board, in the Canadian Province of Ontario pursuant to a license granted by the Alcohol and Gaming Commission of Ontario, in Pennsylvania pursuant to a license granted by the Pennsylvania Gaming Control Board, and in West Virginia pursuant to an interim license granted by the West Virginia Lottery.

In addition, we operate our GNOG-branded iGaming product offering in Michigan, New Jersey, and West Virginia, subject to licenses or temporary licenses granted by the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement and the West Virginia Lottery, respectively.

As of February 13, 2024, we operate our DraftKings-branded iGaming product offering in New Jersey pursuant to a transactional waiver granted by the New Jersey Division of Gaming Enforcement, in Connecticut pursuant to a license granted by the State of Connecticut Department of Consumer Protection, in Michigan pursuant to a license granted by the Michigan Gaming Control Board, in the Canadian Province of Ontario pursuant to a license granted by the Alcohol and Gaming Commission of Ontario, in Pennsylvania pursuant to a license granted by the Pennsylvania Gaming Control Board, and in West Virginia pursuant to a license granted by the West Virginia Lottery.

In addition, we operate our GNOG-branded iGaming product offering in Michigan, New Jersey, Pennsylvania and West Virginia, subject to licenses or transactional waiver issued by the Michigan Gaming Control Board, the New Jersey Division of Gaming Enforcement, Pennsylvania Gaming Control Board and the West Virginia Lottery, respectively.

Generally, online gambling in the United States is only lawful when specifically permitted under applicable state law.

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However, the Wire Act notes that it shall not be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country in which such betting is legal.

Although there was previous litigation in the First Circuit as to whether the Wire Act applied beyond sports betting, on January 20, 2021, the United States Court of Appeals for the First Circuit held, among other things, that the Wire Act’s prohibitions are limited to bets or wager on sporting events or contests.

Daily Fantasy Sports

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In those states that currently require a license or registration for DFS operations, DraftKings has either obtained the appropriate license or registration or a provisional license from the relevant regulatory authority or is operating pursuant to a grandfathering clause that allows operation pending the availability of licensing applications and subsequent grant of a license.

DraftKings also has two foreign DFS licenses, in the United Kingdom and Malta, and operates under its license in the United Kingdom.

DraftKings also has a foreign DFS license in the United Kingdom.

Various state laws and regulations govern our licenses, but generally such state laws and regulations define paid fantasy sports, establish the rules concerning the application and licensure procedures for gaming operators in the fantasy sports business and regulate practices for paid fantasy sports deemed to be detrimental to the public interest.

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In the United States, our DFS licenses are generally granted for a predetermined period of time (typically ranging from one to four years) or require documents to be supplied on a regular basis in order to maintain our licenses.

We also maintain DFS licenses in the United Kingdom and Malta.

In the United Kingdom, online gaming and sports betting is subject to the Gambling Act 2005 (the “GA2005”), as amended by the Gambling (Licensing and Advertising)

Act 2014, and the regulations promulgated thereunder.

Outside the United States, we maintain a DFS license in the United Kingdom.

In the United Kingdom, online gaming and sports betting is subject to the Gambling Act 2005 (the “GA2005”), as amended by the Gambling (Licensing and Advertising) Act 2014, and the regulations promulgated thereunder.

Under the GA2005, entities wishing to offer online sports betting (which for purposes of GA2005 is defined to include DFS) and/or online casino services to persons located in the United Kingdom must first obtain a remote gambling operating license from the Gambling Commission.

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Our British licenses are not limited by a term, subject to the payment of annual fees and compliance with license conditions.

In Malta, online gaming and sports betting is subject to the Gaming Act 2018 and the regulations promulgated thereunder.

Fantasy sports (including DFS) are considered a controlled skill game for the purposes of the Gaming Authorizations Regulations.

Our subsidiary, Crown DFS Malta Limited, holds a gaming services license, issued by the Malta Gaming Authority, which authorizes the holder to conduct controlled skill games.

Our Malta license was originally issued in 2017.

Under the Gaming Act 2018, it has a duration of 10 years.

Gaming Software

Our gaming software services, formerly the operations of SBTech, are licensed in various states in the United States and in the United Kingdom, Gibraltar, Malta, Romania and Belgium.

Our gaming software services, formerly the operations of SBTech, are licensed in various states in the United States and in the United Kingdom, Sweden, and Belgium.

Additionally, our gaming software is certified in multiple regulated jurisdictions in accordance with local licenses held by operators utilizing our gaming software in these jurisdictions.

As of February 15, 2023, we supplied our SBTech gaming software to U.S operators in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Michigan, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia, and Wyoming, and we supplied retail sportsbook gaming software services in Colorado, Connecticut, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, New York and Washington pursuant to state and/or tribal regulatory regimes.

As of February 13, 2024, we supplied our SBTech gaming software to U.S operators in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia, and Wyoming, and we supplied retail sportsbook gaming software services in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey and Washington pursuant to state and/or tribal regulatory regimes.

Data Protection and Privacy

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business