Why DraftKings' surcharge in high-tax states makes sense: CEO

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DraftKings (DKNG) shares are under pressure following the company's mixed second quarter earnings report. CEO Jason Robins joins Catalysts to discuss his outlook on the company's future business operations.

Robins emphasizes that the company isn't planning major changes, but instead aims to increase investment in what is already a "strong customer acquisition environment." He mentions one notable change for next year: the implementation of new charges for customers in high-tax states, which he believes will help "offset next year and maybe even deliver a positive EBITDA tailwind."

When it comes to where or not rivals will try to take advantage of DraftKings' new surcharge, Robins suggests a wait-and-see approach, given that those companies have the same math is companies do and are under pressure to deliver a profit.

However, Robins stresses that investments will remain the main focus, stating, "Product is the most important thing, customer experience is the most important thing, and we want to make sure we can continue to invest there." He views this strategy as the best way for DraftKings to outperform its competition. The new charges for users in higher-tax states will create room for these investments, he explains.

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This post was written by Angel Smith

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