What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-02 · 189 added, 167 removed, 618 unchanged (37% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

June 30, 2024

September 30, 2024

(Unaudited) December 31, 2023

30 unchanged sentences

Class A common stock, $ 0.0001 par value;

900,000 shares authorized as of June 30, 2024 and December 31, 2023;

498,740 and 484,598 shares issued and 485,426 and 472,697 outstanding as of June 30, 2024 and December 31, 2023, respectively

900,000 shares authorized as of September 30, 2024 and December 31, 2023;

501,081 and 484,598 shares issued and 487,169 and 472,697 outstanding as of September 30, 2024 and December 31, 2023, respectively

Class B common stock, $ 0.0001 par value;

900,000 shares authorized as of June 30, 2024 and December 31, 2023;

393,014 shares issued and outstanding as of June 30, 2024 and December 31, 2023

900,000 shares authorized as of September 30, 2024 and December 31, 2023;

393,014 shares issued and outstanding as of September 30, 2024 and December 31, 2023

Treasury stock, at cost;

13,314 and 11,901 shares as of June 30, 2024 and December 31, 2023, respectively

13,912 and 11,901 shares as of September 30, 2024 and December 31, 2023, respectively

( 490,352 ) ( 412,182 )

8 unchanged sentences

(Amounts in thousands, except per share data)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

10 unchanged sentences

Other (loss) gain, net ( 4,620 ) ( 1,217 ) ( 5,801 ) ( 1,153 )

Loss before income tax (benefit) provision and loss (income) from equity method investment ( 9,509 ) ( 76,296 ) ( 152,758 ) ( 471,957 )

Loss before income tax (benefit) provision and loss from equity method investment ( 294,865 ) ( 281,804 ) ( 447,623 ) ( 753,761 )

Income tax (benefit) provision ( 1,287 ) 1,291 ( 75,208 ) 3,310

Loss (income) from equity method investment 239 323 ( 91 ) 442

Net income (loss) attributable to common stockholders $ 63,822 $ ( 77,270 ) $ ( 78,746 ) $ ( 474,418 )

Earnings (loss) per share attributable to common stockholders:

Basic $ 0.13 $ ( 0.17 ) $ ( 0.17 ) $ ( 1.03 )

Diluted $ 0.10 $ ( 0.17 ) $ ( 0.17 ) $ ( 1.03 )

Loss from equity method investment 110 8 19 450

Net loss attributable to common stockholders $ ( 293,688 ) $ ( 283,103 ) $ ( 372,434 ) $ ( 757,521 )

Loss per share attributable to common stockholders:

Basic and diluted $ ( 0.60 ) $ ( 0.61 ) $ ( 0.78 ) $ ( 1.64 )

See accompanying notes to unaudited condensed consolidated financial statements.

10 unchanged sentences

Exercise of stock options 630 — — — 2,857 — — — 2,857

Stock-based compensation expense — — — — 117,702 — — — 117,702

Stock-based compensation — — — — 117,702 — — — 117,702

Exercise of warrants 1,002 — — — 46,181 — — — 46,181

4 unchanged sentences

Exercise of stock options 257 — — — 2,586 — — — 2,586

Stock-based compensation expense — — — — 93,681 — — — 93,681

Stock-based compensation — — — — 93,681 — — — 93,681

Exercise of warrants 6 — — — 217 — — — 217

4 unchanged sentences

Balances at June 30, 2024 485,426 $ 47 393,014 $ 39 $ 7,744,638 $ ( 6,012,689 ) $ 36,488 $ ( 470,094 ) $ 1,298,429

Exercise of stock options 529 — — — 1,355 — — — 1,355

Stock-based compensation — — — — 90,260 — — — 90,260

Exercise of warrants 1 — — — 18 — — — 18

Purchase of treasury stock ( 598 ) — — — — — — ( 20,258 ) ( 20,258 )

Restricted stock unit vesting 1,811 — — — — — — — —

Shares issued in connection with business combinations — — — — — — — — —

Net income (loss) — — — — — ( 293,688 ) — — ( 293,688 )

Balances at September 30, 2024 487,169 $ 47 393,014 $ 39 $ 7,836,271 $ ( 6,306,377 ) $ 36,488 $ ( 490,352 ) $ 1,076,116

Class A Common Stock Class B Common Stock Additional

6 unchanged sentences

Exercise of stock options 701 — — — 2,192 — — — 2,192

Stock-based compensation expense — — — — 117,400 — — — 117,400

Stock-based compensation — — — — 117,400 — — — 117,400

Purchase of treasury stock ( 1,399 ) — — — — — — ( 27,358 ) ( 27,358 )

3 unchanged sentences

Exercise of stock options 284 — — — 1,144 — — — 1,144

Stock-based compensation expense — — — — 89,193 — — — 89,193

Stock-based compensation — — — — 89,193 — — — 89,193

Shares issued for exercise of warrants 62 — — — 1,470 — — — 1,470

3 unchanged sentences

Balances at June 30, 2023 463,257 $ 46 393,014 $ 39 $ 6,961,454 $ ( 5,606,219 ) $ 36,488 $ ( 373,317 ) $ 1,018,491

Exercise of stock options 1,359 — — — 5,506 — — — 5,506

Stock-based compensation — — — — 78,353 — — — 78,353

Shares issued for exercise of warrants 11 — — — 342 — — — 342

Purchase of treasury stock ( 617 ) — — — — — — ( 18,167 ) ( 18,167 )

Restricted stock unit vesting 1,896 — — — — — — — —

Net income (loss) — — — — — ( 283,103 ) — — ( 283,103 )

Balances at September 30, 2023 465,906 $ 46 393,014 $ 39 $ 7,045,655 $ ( 5,889,322 ) $ 36,488 $ ( 391,484 ) $ 801,422

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 204,755 146,722

Non-cash interest income, net ( 1,471 ) ( 378 )

Stock-based compensation expense 183,755 206,593

Non-cash interest (income) expense, net 27 ( 554 )

Stock-based compensation 271,307 284,946

Loss on remeasurement of warrant liabilities 8,282 44,827

1 unchanged sentence

Loss on marketable equity securities and other financial assets, net — 75

Loss on sale of Vegas Sports Information Network, LLC 5,817 —

Deferred income taxes ( 80,604 ) 4,527

10 unchanged sentences

Other long-term liabilities 8,138 5,112

Net cash flows used in operating activities $ ( 41,006 ) $ ( 219,213 )

Net cash flows provided by (used in) operating activities $ 92,578 $ ( 73,818 )

Cash Flows from Investing Activities:

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except loss per share data, unless otherwise noted)

(Amounts in thousands, except per share data, unless otherwise noted)

Description of Business

3 unchanged sentences

In May 2018, the Supreme Court (the “Court”) struck down on constitutional grounds the Professional and Amateur Sports Protection Act of 1992, a law that prohibited most states from authorizing and regulating sports betting.

As of June 30, 2024, 35 U.S.

states, the District of Columbia and Puerto Rico have legalized some form of sports betting.

Of those 37 legal jurisdictions, 32 have legalized online sports betting.

As of September 30, 2024, 38 U.S.

states, the District of Columbia and Puerto Rico have some form of authorized sports betting.

Of those 40 jurisdictions, 32 have legalized online sports betting.

All 32 of those jurisdictions are live, and DraftKings operates in 26 of them.

As of June 30, 2024, the U.S.

As of September 30, 2024, the U.S.

jurisdictions with statutes legalizing iGaming are Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.

As of June 30, 2024, we operate our Sportsbook product offering in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, West Virginia, Wyoming and Ontario, Canada, and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey and Washington.

As of June 30, 2024, we operate our iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

The Company also has arrangements in place with land-based casinos to expand operations into additional states upon the passing of relevant legislation, the issuance of related regulations and the receipt of required licenses.

As of September 30, 2024, we operate our Sportsbook product offering in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, D.C., West Virginia, Wyoming and Ontario, Canada, and we operate retail sportsbooks in Arizona, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, New Hampshire, New Jersey, Washington and Wisconsin.

As of September 30, 2024, we operate our iGaming product offering in Connecticut, Michigan, New Jersey, Pennsylvania, West Virginia and Ontario, Canada.

The Company also has arrangements in place with land-based casinos, and other partners, to expand operations into additional states upon the passing of relevant legislation, the issuance of related regulations and the receipt of required licenses.

Summary of Significant Accounting Policies and Practices

11 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , designed to improve reportable segment disclosures.

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lottery vertical with expected ancillary benefits to its Sportsbook and iGaming product offerings by enhancing customer lifetime value and customer acquisition capabilities.

Operating results for Jackpocket on and after the Jackpocket Closing Date are included in the Company’s unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2024.

Because the Company is integrating Jackpocket's operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through June 30, 2024, which is included within revenue and net income (loss) attributable to common stockholders in the Company’s unaudited condensed consolidated statements of operations, is impracticable to determine.

Because the Company is integrating Jackpocket ’ s operations into its consolidated operating activities, the amount of revenue and earnings attributable to the Jackpocket business from the Jackpocket Closing Date through September 30, 2024, which is included within revenue and net income (loss) attributable to common stockholders in the Company’s unaudited condensed consolidated statements of operations, is impracticable to determine.

Preliminary Purchase Price Accounting for the Jackpocket Transaction

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Total consideration $ 771,707

(1) Includes the issuance of approximately 7.5 million shares of DraftKings Inc.’s Class A common stock issued at $ 41.90 per share and $ 6.2 million of options exercisable for shares of DraftKings Inc.'s Class A common stock, which were issued to certain Jackpocket employee optionholders in exchange for their vested Jackpocket options.

’ s Class A common stock, which were issued to certain Jackpocket employee option holders in exchange for their Jackpocket options.

The purchase price allocation for Jackpocket set forth herein is preliminary and subject to change within the measurement period, which will not extend beyond one year from the Jackpocket Closing Date.

35 unchanged sentences

Transaction Costs

For the three and six months ended June 30, 2024, the Company incurred $ 10.4 million and $ 15.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which are included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

For the three and nine months ended September 30, 2024, the Company incurred nil and $ 15.3 million in advisory, legal, accounting and management fees in connection with the Jackpocket Transaction, respectively, which are included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.

Acquisition of Sports IQ Analytics Inc.

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Goodwill associated with the SIQ Transaction is assigned as of the acquisition date to the Company’s consolidated reporting unit.

The purchase price allocation for the SIQ Transaction is preliminary as of June 30, 2024.

The purchase price allocation for the SIQ Transaction is preliminary as of September 30, 2024.

Goodwill recognized is not deductible for tax purposes and transaction costs were not significant.

2 unchanged sentences

Intangible Assets

As of June 30, 2024, intangible assets, net consists of the following:

As of September 30, 2024, intangible assets, net consists of the following:

Weighted-Average Remaining Amortization Period Gross Carrying Amount Accumulated Amortization Net

16 unchanged sentences

Customer relationships 4.1 years 269,728 ( 127,862 ) 141,866

Trademarks and tradenames 3.3 years 37,674 ( 20,751 ) 16,923

Trademarks, tradenames and other 3.3 years 37,674 ( 20,751 ) 16,923

$ 1,185,706 $ ( 497,970 ) $ 687,736

Indefinite-lived intangible assets:

Digital assets Indefinite-lived 2,884 N/A 2,884

Digital assets, net of impairment Indefinite-lived 2,884 N/A 2,884

Total $ 1,188,590 $ ( 497,970 ) $ 690,620

Amortization expense was $ 56.3 million and $ 103.6 million for the three and six months ended June 30, 2024, respectively, and $ 43.0 million and $ 86.2 million for the three and six months ended June 30, 2023, respectively.

The table below reflects expected amortization expense for the next five years of intangible assets recorded as of June 30, 2024:

Amortization expense was $ 84.6 million and $ 188.2 million for the three and nine months ended September 30, 2024, respectively, and $ 45.1 million and $ 131.2 million for the three and nine months ended September 30, 2023, respectively.

The table below reflects expected amortization expense for the next five years of intangible assets recorded as of September 30, 2024:

Year ending December 31, Estimated Amortization

July 1, 2024 to December 31, 2024 $ 126,133

The changes in the carrying amount of goodwill for the year ended December 31, 2023 and the six months ended June 30, 2024 are:

Balance as of December 31, 2022 $ 886,373

Changes in Goodwill —

October 1, 2024 to December 31, 2024 $ 65,662

The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 are:

Balance as of December 31, 2023 $ 886,373

Goodwill resulting from acquisitions 569,636

Balance as of June 30, 2024 $ 1,456,009

No impairment of goodwill was recorded in the three or six months ended June 30, 2024.

As of June 30, 2024, the Company had no accumulated goodwill impairment losses.

Balance as of September 30, 2024 $ 1,456,009

No impairment of goodwill was recorded in the three or nine months ended September 30, 2024.

As of September 30, 2024, the Company had no accumulated goodwill impairment losses.

Current and Long-term Liabilities

Revolving Line of Credit

On December 20, 2022, the Company entered into a loan and security agreement with Banc of California (formerly Pacific Western Bank) and Citizens Bank, as lenders (as amended, the “Credit Agreement”), which provides the Company with a revolving line of credit of up to $ 125.0 million (the “Revolving Line of Credit”).

The Credit Agreement maturity date was extended from December 20, 2024 to December 20, 2025, effective July 31, 2024.

The Credit Agreement replaced the Company’s amended and restated loan and security agreement entered into with Pacific Western Bank in October 2016, which provided a revolving line of credit of up to $ 60.0 million and was terminated in connection with the Company’s entry into the Credit Agreement.

Borrowings under the Credit Agreement bear interest at a variable annual rate equal to the greater of (i) 1.00 % above the prime rate then in effect and (ii) 5.00 %, and the Credit Agreement requires monthly, interest-only payments on any outstanding borrowings.

In addition, the Company is required to pay quarterly in arrears a commitment fee equal to 0.25 % per annum of the unused portion of the Revolving Line of Credit.

As of June 30, 2024 , the Credit Agreement provided a revolving line of credit of up to $ 125.0 million, and there was no principal outstanding under the Credit Agreement.

Net borrowing capacity available from the Credit Agreement as of June 30, 2024 totaled $ 122.7 million.

The Company is also subject to certain affirmative and negative covenants, including the restriction of dividends, under the Credit Agreement which the Company is in compliance with as of June 30, 2024 .

One such covenant involves maintaining compensating cash balances.

The compensating balances may be withdrawn but the availability of the line of credit is dependent upon maintenance of such compensating balances.

The performance of the Company’s obligations under the Credit Agreement are secured by a first-priority security interest on substantially all of its assets.

Old Revolving Line of Credit and New Revolving Credit Facility

On December 20, 2022, the Company entered into a loan and security agreement with Banc of California (formerly Pacific Western Bank) and Citizens Bank, as lenders (as amended, the “Old Credit Agreement”), which provided the Company with a revolving line of credit of up to $ 125.0 million (the “Old Revolving Line of Credit”).

The Old Credit Agreement maturity date was extended from December 20, 2024 to December 20, 2025, effective July 31, 2024.

Borrowings under the Old Credit Agreement bore interest at a variable annual rate equal to the greater of (i) 1.00 % above the prime rate then in effect and (ii) 5.00 %, and the Old Credit Agreement required monthly, interest-only payments on any outstanding borrowings.

In addition, the Company was required to pay quarterly in arrear a commitment fee equal to 0.25 % per annum of the unused portion of the Old Revolving Line of Credit.

As of September 30, 2024 , the Old Credit Agreement provided the Old Revolving Line of Credit of up to $ 125.0 million, and there was no principal outstanding under the Old Credit Agreement.

Net borrowing capacity available from the Old Revolving Line of Credit as of September 30, 2024 totaled $ 122.7 million.

The Company was also subject to certain affirmative and negative covenants, including the restriction of dividends, under the Old Credit Agreement which the Company was in compliance with as of September 30, 2024 .

One such covenant involved maintaining compensating cash balances.

The compensating balances were able to be withdrawn but the availability of the line of credit was dependent upon maintenance of such compensating balances.

The performance of the Company’s obligations under the Old Credit Agreement were secured by a first-priority security interest on substantially all of its assets.

On November 7, 2024, the Company entered into a credit agreement (the “New Credit Agreement”) with various financial institutions, as lenders, and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent, providing for a senior secured revolving credit facility of up to $ 500.0 million (the “New Revolving Credit Facility”).

The New Revolving Credit Facility has a maturity date of November 7, 2029.

In conjunction with the New Credit Agreement and New Revolving Credit Facility, the Old Credit Agreement and Old Rev olving Line of Credit were terminated.

Revolving loans under the New Revolving Credit Facility bear interest at the Company’s election at either (i) Term SOFR (as defined in the New Credit Agreement), plus an applicable margin ranging from 1.75 % to 2.25 % depending on the Company’s Net First Lien Leverage Ratio (as defined in the New Credit Agreement) or (ii) a base rate that is equal to the greatest of (a) the federal funds rate plus 0.50 %, (b) the prime rate and (c) Term SOFR for a one month interest period plus 1.00 %, in each case plus an additional applicable margin ranging from 0.75 % to 1.25 % depending on the Company’s Net First Lien Leverage Ratio.

In addition, the Company is required to pay a commitment fee quarterly in arrear ranging from 0.25 % to

0.375 % per annum of the unused portion of the New Revolving Credit Facility depending on the Company’s Net First Lien Leverage Ratio.

The performance of the Company’s obligations under the New Credit Agreement is secured by a first-priority security interest on substantially all of its assets.

The New Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including dividend restrictions and a financial covenant that the Company is required to maintain a Net First Lien Leverage Ratio not to exceed 4.50 :1.00, which is tested only if revolving loans outstanding under the New Revolving Credit Facility are in excess of 40 % of the commitments under the New Revolving Credit Facility.

Convertible Notes and Capped Call Transactions

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Old DraftKings will satisfy any conversion election by paying or delivering, as the case may be, cash, shares of DraftKings Inc.’s Class A common stock or a combination of cash and shares of DraftKings Inc.’s Class A common stock.

As of June 30, 2024, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

As of September 30, 2024, no conditions were met to allow for the conversion of the Convertible Notes by any holder.

In connection with the pricing of the Convertible Notes and the exercise of the over-allotment option to purchase additional notes, Old DraftKings entered into a privately negotiated capped call transaction (“Capped Call Transactions”).

3 unchanged sentences

As the transaction qualifies for equity classification, the net cost of $ 124.0 million incurred in connection with the Capped Call Transactions was recorded as a reduction to additional paid-in capital on the Company ’ s consolidated balance sheet.

As of June 30, 2024, the Company’s convertible debt balance was $ 1,255.1 million, net of unamortized debt issuance costs of $ 9.9 million.

The amortization of debt issuance costs was $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 2024, respectively, and $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 2023, respectively, which are included in the interest expense line-item on the Company's consolidated statements of operations.

Although recorded at amortized cost on the Company’s consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,046.4 million and $ 1,025.6 million as of June 30, 2024 and December 31, 2023, respectively, which was calculated using the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

As of September 30, 2024, the Company’s convertible debt balance was $ 1,255.8 million, net of unamortized debt issuance costs of $ 9.2 million.

The amortization of debt issuance costs was $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2024, respectively, and $ 0.7 million and $ 2.0 million for the three and nine months ended September 30, 2023, respectively, which are included in the interest expense line-item on the Company ’ s consolidated statements of operations.

Although recorded at amortized cost on the Company’s consolidated balance sheets, the estimated fair value of the Convertible Notes was $ 1,104.2 million and $ 1,025.6 million as of September 30, 2024 and December 31, 2023, respectively, which was calculated using the estimated or actual bids and offers of the Convertible Notes in an over-the-counter market on the last business day of the period, which is a Level 1 fair value measurement.

Indirect Taxes

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The Company’s activities by jurisdiction may vary from period to period, which could result in differences in the applicability of indirect taxes from period to period.

As of June 30, 2024 and December 31, 2023, the Company’s estimated contingent liability for indirect taxes was $ 80.3 million and $ 71.2 million, respectively.

As of September 30, 2024 and December 31, 2023, the Company’s estimated contingent liability for indirect taxes was $ 82.8 million and $ 71.2 million, respectively.

The estimated contingent liability for indirect taxes is recorded within other long-term liabilities on the condensed consolidated balance sheets and general and administrative expenses on the condensed consolidated statements of operations.

3 unchanged sentences

Simultaneously with the closing of the IPO, DEAC completed the private sale of 6.3 million warrants to DEAC’s sponsor (the “Private Warrants”), each of which entitles the holder to purchase one share of DraftKings Inc.’s Class A common stock at an exercise price of $ 11.50 per share.

As of June 30, 2024, there were no Public Warrants outstanding and 0.4 million Private Warrants outstanding.

As of September 30, 2024, there were no Public Warrants outstanding and 0.4 million Private Warrants outstanding.

On May 5, 2022 (the “GNOG Closing Date”), DraftKings Inc.

7 unchanged sentences

In addition, on the GNOG Closing Date, in connection with the consummation of the GNOG Transaction, the Company assumed an additional 5.9 million warrants, each of which entitled the holder to purchase one share of GNOG’s Class A common stock at an exercise price of $ 11.50 per share (the “GNOG Private Warrants”).

Effective as of the consummation of the GNOG Transaction, each of the outstanding GNOG Private Warrants became exercisable for 0.365 of a share of DraftKings Inc.'s Class A common stock, or approximately 2.1 million shares of DraftKings Inc.’s Class A common stock in the aggregate, on the existing terms and conditions of such GNOG Private Warrants, except as otherwise described in the assignment and assumption agreement relating to the GNOG Private Warrants entered into on the GNOG Closing Date.

As of June 30, 2024, there were 2.9 million GNOG Private Warrants outstanding, convertible into approximately 1.1 million shares of DraftKings Inc.'s Class A common stock.

Effective as of the consummation of the GNOG Transaction, each of the outstanding GNOG Private Warrants became exercisable for 0.365 of a share of DraftKings Inc.

’ s Class A common stock, or approximately 2.1 million shares of DraftKings Inc.’s Class A common stock in the aggregate, on the existing terms and conditions of such GNOG Private Warrants, except as otherwise described in the assignment and assumption agreement relating to the GNOG Private Warrants entered into on the GNOG Closing Date.

As of September 30, 2024, there were 2.9 million GNOG Private Warrants outstanding, convertible into approximately 1.1 million shares of DraftKings Inc.

’ s Class A common stock.

The Company classifies the Public Warrants, the Private Warrants and the GNOG Private Warrants pursuant to Accounting Standards Codification Topic 815, Derivatives and Hedging , as derivative liabilities with subsequent changes in their respective fair values recognized in its consolidated statement of operations at each reporting date.

As of June 30, 2024, the fair value of the Company’s warrant liability was $ 25.5 million.

Due to fair value changes, the Company recorded a gain on the remeasurement of its warrant liabilities of $ 9.8 million for the three months ended June 30, 2024 and a loss of $ 20.0 million for the three months ended June 30, 2023.

During the six months ended June 30, 2024 and 2023, the Company recorded losses on the remeasurement of its warrant liabilities of $ 8.3 million and $ 37.1 million, respectively.

During the three and six months ended June 30, 2024, 0.1 million and 1.0 million Private Warrants were exercised, respectively.

There were no GNOG Private Warrants exercised during the three months ended June 30, 2024, and 2.9 million GNOG Private Warrants were exercised during the six months ended June 30, 2024.

As of September 30, 2024, the fair value of the Company’s warrant liability was $ 25.4 million.

Due to fair value changes, the Company recorded a nominal gain on the remeasurement of its warrant liabilities for the three months ended September 30, 2024 and a loss of $ 7.8 million for the three months ended September 30, 2023.

During the nine months ended September 30, 2024 and 2023, the Company recorded losses on the remeasurement of its warrant liabilities of $ 8.3 million and $ 44.8 million, respectively.

During the three and nine months ended September 30, 2024, 0.0 million and 1.0 million Private Warrants were exercised, respectively.

There were no GNOG Private Warrants exercised during the three months ended September 30, 2024, and 2.9 million GNOG Private Warrants were exercised during the nine months ended September 30, 2024.

These GNOG Private Warrants exercises resulted in the issuance of approximately 1.1 million shares of DraftKings Inc.

Class A common stock as some were exercised on a cashless basis.

Class A common stock as all were exercised on a cashless basis.

Fair Value Measurements

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• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of June 30, 2024 and December 31, 2023 based on the three-tier fair value hierarchy:

June 30, 2024

The following tables set forth the fair value of the Company’s financial assets and liabilities measured at fair value as of September 30, 2024 and December 31, 2023 based on the three-tier fair value hierarchy:

September 30, 2024

Level 1 Level 2 Level 3 Total

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The Company measures these derivative instruments to fair value using option pricing models and, accordingly, classifies these assets as Level 3.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the six months ended June 30, 2024.

There were no new Level 3 derivative instruments sold, purchased by or issued to the Company during the nine months ended September 30, 2024.

The table below includes a range and an average weighted by relative fair value of the significant unobservable inputs used to measure these Level 3 derivative instruments to fair value.

1 unchanged sentence

Changes to fair value of these instruments are recorded in Other (loss) income, net on the consolidated statements of operations and loss (gain) on marketable equity securities and other financial assets, net in the consolidated statement of cash flows.

June 30, 2024

September 30, 2024

December 31, 2023

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The deferred revenue balances were as follows:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

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Revenue Disaggregation

Disaggregation of revenue for the three and six months ended June 30, 2024 and 2023 is as follows:

Three months ended June 30, Six months ended June 30,

Disaggregation of revenue for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Other revenue primarily includes media, retail sportsbooks and other consumer product offerings.

The opening and closing balances of the Company's accounts receivable from contracts with customers were $ 47.5 million and $ 65.0 million for the six months ended June 30, 2024, respectively, and $ 160.1 million and $ 109.2 million for the six months ended June 30, 2023, respectively.

The opening and closing balances of the Company ’ s accounts receivable from contracts with customers were $ 47.5 million and $ 64.4 million for the nine months ended September 30, 2024, respectively, and $ 51.1 million and $ 27.8 million for the nine months ended September 30, 2023, respectively.

Stock-Based Compensation

6 unchanged sentences

All stock-based compensation awards expire seven to ten years after the grant date thereof.

The following table shows restricted stock unit (“RSU”) and stock option activity for the six months ended June 30, 2024:

The following table shows restricted stock unit (“RSU”) and stock option activity for the nine months ended September 30, 2024:

Time-Based PSP LTIP Total Weighted Average Exercise Price of Options Weighted Average FMV

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Forfeited ( 5 ) ( 1,373 ) — ( 748 ) — ( 134 ) ( 2,260 ) 15.79 22.94

Outstanding at June 30, 2024 10,266 19,072 1,387 14,899 10,276 901 56,801 $ 7.63 $ 27.22

As of June 30, 2024, total unrecognized stock-based compensation expense of $ 750.6 million related to granted and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.7 years.

The following tables shows stock compensation expense for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Outstanding at September 30, 2024 9,732 17,658 1,387 14,510 10,276 860 54,423 $ 7.75 $ 27.81

As of September 30, 2024, total unrecognized stock-based compensation expense of $ 691.2 million related to granted and unvested stock-based compensation arrangements is expected to be recognized over a weighted-average period of 2.5 years.

The following tables shows stock compensation expense for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

Options RSUs Total Options RSUs Total

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Total $ 1,632 $ 85,920 $ 87,552 $ 1,849 $ 76,504 $ 78,353

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Options RSUs Total Options RSUs Total

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(2) PSP and LTIP awards vest based on defined performance criteria and are expensed based on the probability of achieving such criteria.

The Company’s (benefit) provision for income taxes for the three and six months ended June 30, 2024 and 2023 is as follows:

Three months ended June 30, Six months ended June 30,

The Company’s (benefit) provision for income taxes for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Income tax (benefit) provision $ ( 1,287 ) $ 1,291 $ ( 75,208 ) $ 3,310

The effective tax rates for the three months ended June 30, 2024 and 2023 were 773.6 % and ( 0.9 )%, respectively, and the effective tax rates for the six months ended June 30, 2024 and 2023 were 48.4 % and ( 0.4 )%, respectively.

The difference between the Company’s effective tax rates for the three and six month periods in 2024 and 2023 and the U.S.

The effective tax rates for the three months ended September 30, 2024 and 2023 were 0.4 % and ( 0.5 )%, respectively, and the effective tax rates for the nine months ended September 30, 2024 and 2023 were 16.8 % and ( 0.4 )%, respectively.

The difference between the Company’s effective tax rates for the three and nine month periods in 2024 and 2023 and the U.S.

statutory tax rate of 21% was primarily due to a valuation allowance related to the Company’s deferred tax assets, offset partially by current state tax and current foreign tax.

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valuation allowance as a result of the purchase accounting for Jackpocket.

The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company regularly evaluates the realizability of

its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.

Earnings (Loss) Per Share

The table below reconciles basic and diluted earnings per share of the Company's Class A common stock for the periods presented:

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net income (loss) attributable to common stockholders – basic $ 63,822 $ ( 77,270 ) $ ( 78,746 ) $ ( 474,418 )

Gain on remeasurement of warrant liabilities ( 9,791 ) — — —

Net income (loss) attributable to common stockholders – diluted $ 54,031 $ ( 77,270 ) $ ( 78,746 ) $ ( 474,418 )

Weighted-average Class A common stock outstanding – basic 479,307 462,432 476,788 458,910

Weighted-average diluted impact of options and RSUs (1)

Weighted-average diluted impact of convertible notes (2)

Weighted-average diluted impact of warrant liabilities (1)

Weighted-average Class A common stock outstanding – diluted 518,785 462,432 476,788 458,910

Anti-dilutive securities excluded from the calculation of diluted earnings per share 282 N/A N/A N/A

Basic earnings per share attributable to common stockholders:

$ 0.13 $ ( 0.17 ) $ ( 0.17 ) $ ( 1.03 )

Diluted earnings per share attributable to common stockholders:

The computation of loss per share and weighted-average shares of the Company ’ s Class A common stock outstanding for the periods presented are as follows:

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

(1) Calculated using the treasury stock method

(2) Calculated using the if-converted method

There were no preferred or other dividends declared for the three and six months ended June 30, 2024.

The below table includes the total securities potentially dilutive for the six month period ending June 30, 2024 and the three and six month period ending June 30, 2023 which have been excluded from the computation of diluted earnings (loss) per share as their effect is anti-dilutive.

June 30, 2024 June 30, 2023

Net loss attributable to common stockholders $ ( 293,688 ) $ ( 283,103 ) $ ( 372,434 ) $ ( 757,521 )

Basic and diluted weighted-average common shares outstanding 486,219 464,773 479,981 460,762

Loss per share attributable to common stockholders:

Basic and diluted $ ( 0.60 ) $ ( 0.61 ) $ ( 0.78 ) $ ( 1.64 )

There were no preferred or other dividends declared for the three and nine months ended September 30, 2024.

For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding, as they would have been anti-dilutive for the three and nine months ended September 30, 2024 and 2023:

September 30, 2024 September 30, 2023

Class A common stock resulting from exercise of all warrants 1,441 3,630

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The operational support is primarily in the form of general and administrative services.

There were no receivables related to these services as of June 30, 2024 or December 31, 2023.

The Company has also committed to invest up to $ 17.5 million into DBDK Venture Fund I, LP, a Delaware limited partnership and a subsidiary of DKFS, LLC.

As of June 30, 2024, the Company had invested a total of $ 8.4 million of the total commitment.

The Company has also committed to invest up to $ 17.5 million in DBDK Venture Fund I, LP and $ 21.0 million in DBDK Fund II, LP.

Both funds are Delaware limited partnerships and are both subsidiaries of DKFS, LLC.

As of September 30, 2024, the Company had invested a total of $ 10.0 million and none of the total commitment in DBDK Venture Fund I, LP and DBDK Fund II, LP, respectively.

Transactions with a Former Director and their Immediate Family Members

For the three and six months ended June 30, 2024, the Company had no sales to entities owned by an immediate family member of a former director of the Company.

For the three and six months ended June 30, 2023, the Company had $ 0.5 million and $ 1.2 million in sales, respectively, to entities owned by an immediate family member of a former director of the Company.

The Company had no associated accounts receivable balance as of June 30, 2024 or December 31, 2023.

For the three and nine months ended September 30, 2024, the Company had no sales to entities owned by an immediate family member of a former director of the Company.

For the three and nine months ended September 30, 2023, the Company had $ 0.2 million and $ 1.4 million in sales, respectively, to entities owned by an immediate family member of a former director of the Company.

The Company had no associated accounts receivable balance as of September 30, 2024 or December 31, 2023.

On each of March 30, 2024 and 2023, the Company renewed a one-year lease of an aircraft from an entity controlled by Mr.

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Robins and his family fly private and the committees ’ assessment that such an arrangement is more efficient and flexible and better ensures safety, confidentiality and privacy.

During the three and six months ended June 30, 2024, the Company incurred $ 0.1 million and $ 0.3 million of expense under the Aircraft Leases as well as $ 0.3 million for upgrades related to the aircraft.

During the three and six months ended June 30, 2023, the Company incurred $ 0.1 million and $ 0.3 million of expense under the Aircraft Leases, respectively.

During the three and nine months ended September 30, 2024, the Company incurred $ 0.1 million and $ 0.4 million of expense under the Aircraft Leases as well as $ 0.3 million for upgrades related to the aircraft.

During the three and nine months ended September 30, 2023, the Company incurred $ 0.1 million and $ 0.5 million of expense under the Aircraft Leases, respectively.

Leases, Commitments and Contingencies

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The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

As of June 30, 2024, the Company’s lease agreements typically have terms not exceeding ten years.

As of September 30, 2024, the Company’s lease agreements typically have terms not exceeding ten years.

Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments primarily represent costs related to common area maintenance and utilities.

The components of lease expense are as follows:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

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Total lease cost $ 7,344 $ 7,286 $ 19,495 $ 20,030

Supplemental cash flow and other information for the six months ended June 30, 2024 and 2023 related to operating leases was as follows:

Six months ended June 30,

Supplemental cash flow and other information for the nine months ended September 30, 2024 and 2023 related to operating leases was as follows:

Nine months ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

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Right-of-use assets obtained in exchange for new operating lease liabilities $ 3,626 $ 22,221

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating leases were 6.9 years and 6.5 % as of June 30, 2024.

The weighted-average remaining lease term and weighted-average discount rate for the Company’s operating leases were 6.6 years and 6.5 % as of September 30, 2024.

The Company calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that it would pay to borrow funds on a fully collateralized basis over a similar term.

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Years Ending December 31,

From July 1, 2024 to December 31, 2024 $ 8,655

From October 1, 2024 to December 31, 2024 $ 4,302

Thereafter 40,223

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Years Ending December 31,

From July 1, 2024 to December 31, 2024 $ 249,782

From October 1, 2024 to December 31, 2024 $ 128,697

Thereafter 181,979

Total $ 1,031,642

As of June 30, 2024 , the Company has been issued $ 265.0 million in surety bonds at a combined annual premium cost of 0.4 %, which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

As of September 30, 2024 , the Company has been issued $ 340.0 million in surety bonds at a combined annual premium cost of 0.4 %, which are held for certain regulators’ use and benefit in order for the Company to satisfy state license requirements.

There have been no claims against such bonds and the likelihood of future claims is remote.

Stock Repurchase Program

On July 30, 2024, our Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of our Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws.

As of September 30, 2024, we have not purchased any shares of Class A common stock under this stock repurchase program.

Contingencies

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Beginning on July 9, 2021, the Company received subpoenas from the SEC seeking documents concerning, among other things, allegations concerning SBTech that were contained in a report published about the Company on June 15, 2021 by Hindenburg Research, as well as the Company’s adherence to and disclosures regarding its compliance policies and procedures, and related matters.

The Company intends to comply with the related requests and is cooperating with the SEC’s ongoing inquiry.

The Company cannot predict with any degree of certainty the outcome of the SEC matter or determine the extent of any potential liabilities.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in the SEC matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the SEC matter will have a material adverse effect on the Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

In September, 2024, the Company entered into a settlement with the SEC regarding alleged violations of Regulation FD in connection with the disclosure on July 27, 2023 of certain information concerning DraftKings’ business through certain social media platforms.

Without admitting or denying the substantive allegations, DraftKings agreed to the entry of a cease and desist order and the payment of a $ 200,000 penalty.

Following the settlement, the Company considers that all the above SEC matters have concluded.

Matters Related to the GNOG Transaction

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in connection with the GNOG Transaction, and the other defendants aided and abetted the alleged breaches of fiduciary duty.

On August 30, 2024, DraftKings filed a motion for summary judgment.

On September 15, 2024, the court entered a stipulated order dismissing the action with prejudice.

On September 9, 2022, two similar putative class actions were filed in the Delaware Court of Chancery against former directors of GNOG Inc.

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At a mediation held on January 24, 2024, the parties reached an agreement in principle to settle the Delaware action, which was reflected in a written settlement agreement, dated March 1, 2024.

On July 9, 2024, the Delaware Court entered its Order and Final Judgment approving the settlement and dismissing the action.

The deadline to file an appeal is August 8, 2024.

If no appeal is filed on or before that date, the Order and Final Judgment dismissing the action becomes final.

On July 9, 2024, the Delaware Court entered its Order and Final Judgment approving the settlement and dismissing the action with prejudice.

The Order and Final Judgment is now final as no appeal was filed by the August 8, 2024 deadline.

The estimated loss was accrued as of December 31, 2023 in the accounts payable and accrued expenses line-item on the consolidated balance sheet.

The Company intends to vigorously defend the Nevada action.

The Company cannot predict with any degree of certainty the outcome of the Nevada action or determine the extent of any potential liabilities.

The Company also cannot provide an estimate of the possible loss or range of loss of the Nevada action.

Any adverse outcome in the Nevada action could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the Nevada action will have a material adverse effect on the Company's financial condition, although the outcome could be material to the Company's operating results for any particular period, depending, in part, upon the operating results for such period.

AG 18, LLC d/b/a/ Arrow Gaming

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We intend to comply with these requests.

The Company cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liability or damages.

The Company cannot predict with any degree of certainty the outcome of the subpoena matters or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages, penalties and/or require alterations to the Company’s business that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of these matters will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Any adverse outcome in the subpoena matters could expose the Company to substantial damages, penalties and/or require alterations to the Company’s business that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the subpoena matters will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Shareholder Derivative Litigation Related to DraftKings Marketplace

On May 31, 2023, a putative shareholder derivative action was filed in Nevada state court by an alleged shareholder of the Company.

The action asserts claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary duty and unjust enrichment based primarily on allegations that the defendants caused or allowed the Company to disseminate misleading and inaccurate information to its shareholders in connection with NFTs that are sold and traded on the DK Marketplace.

The action also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The action seeks unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

On May 31, 2023, the first of three substantially similar, putative shareholder derivative actions was filed in Nevada state court by an alleged shareholder of the Company.

The actions purport to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary duty, aiding-and-abetting breach of fiduciary duty, unjust enrichment, and corporate waste based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law and/or operate the Company as an unregistered broker-dealer or securities exchange in violation of applicable law.

Two of the actions also assert that certain of the defendants are liable for causing or allowing the Company to disseminate misleading and inaccurate information to its shareholders in connection with NFTs that are sold and traded on the DK Marketplace.

One of the actions also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The actions seek unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

On October 29, 2024, the court entered a stipulated order consolidating the three actions under the caption In re DraftKings Inc.

Stockholder Derivative Litigation and appointed lead counsel and further ordered that plaintiffs shall file a consolidated amended complaint within sixty days .

The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

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The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome

in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of this matter will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

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The plaintiffs are seeking, among other things, injunctive relief, actual damages, punitive damages, treble damages, and attorneys’ fees.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On August 9, 2024, plaintiff voluntarily dismissed the lawsuit with prejudice as to plaintiff’s individual claims.

On June 10, 2024, Plaintiff Matthew McAfee, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against DraftKings in the Hamilton County Superior Court, State of Indiana.

On July 12, 2024, DraftKings

removed the matter to the United States District Court for the Southern District of Indiana.

Among other things, Plaintiff alleges that those customers who had winning bets placed and accepted on the October 24, 2023 Lakers versus Nuggets basketball game that were subsequently canceled by DraftKings for obvious error were not timely canceled and should have been paid.

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On September 30, 2024, plaintiff Nerye Aminov, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in the Supreme Court of the State of New York, County of Queens.

Among other things, Plaintiff alleges that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements were unfair or deceptive practices in violation of New York General Business Law §§ 349-350.

Plaintiff also asserts claims for intentional misrepresentation, fraudulent inducement, and quasi-contract/unjust enrichment.

Plaintiff seeks, among other things, injunctive relief, actual damages, punitive damages, and attorneys’ fees.

Plaintiff seeks to certify a nationwide class, with a New York subclass.

The complaint has not yet been served.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

National Football League Players Association

On August 20, 2024, the plaintiffs, National Football League Players Association and National Football League Players Incorporated, filed a complaint against DraftKings in the United States District Court for the Southern District of New York alleging, among other things, that DraftKings breached its Licensing Agreement (the “Agreement”) with the plaintiffs.

The plaintiffs are seeking, among other things, payment of all purported unpaid sums due under the Agreement.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome

in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Internal Revenue Service

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The final resolution of that audit, and other audits or litigation, may differ from the amounts recorded in these consolidated financial statements and may materially affect the Company’s consolidated financial statements in the period or periods in which that determination is made.

Subsequent Events

Stock Repurchase Authorization

On July 30, 2024, the Company’s Board of Directors authorized the repurchase of an aggregate of up to $ 1.0 billion of DraftKings Inc.’s Class A common stock (the “Stock Repurchase Program”).

DraftKings may make repurchases of its Class A common stock through open market purchases, privately negotiated transactions or other transactions in accordance with applicable securities laws, subject to market conditions and other factors.

The Company’s Stock Repurchase Program does not require it to acquire any specific number or amount of Class A common stock and may be terminated at any time.

The Company may enter into Rule 10b5-1 plans from time to time to facilitate repurchases of its Class A common stock in connection with its Stock Repurchase Program.

Discontinuance of Reignmakers and NFT Marketplace

Effective July 30, 2024, the Company discontinued Reignmakers and our NFT Marketplace.

The Company is not yet able to reliably estimate the financial impact of the discontinuation.

The Company does not believe, based on currently available information, that the discontinuation of Reignmakers and our NFT Marketplace will have a material adverse effect on the Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

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-Q

Item 1. Financial Statements