Slide 1: Investor Presentation December 2019
| INVESTOR PRESENTATION DECEMBER 2019
Slide 2: Legal Disclaimer
| LEGAL DISCLAIMER This investor presentation (“Investor Presentation”) is for informational purposes and does not constitute an offer to sell, a sol ici tation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of DraftKings Inc. (“ DraftKings ”, “DK
Slide 3: Legal Disclaimer (Continued)
| LEGAL DISCLAIMER (CONTINUED) Use of Non - GAAP Financial Matters This presentation includes non - GAAP financial measures, including EBITDA. DEAC, DraftKings and SBT believe that these non - GAAP measures are useful to investors for two principal reasons. First, they believe these measures may ass
Slide 4: Our Mission and Vision
| “We make life more exciting by responsibly creating the world’s favorite games and betting experiences” “To build the best, most trusted, and most customer - centric destination for skin - in - the - game fans, to develop the most innovative and entertaining real money gaming products and offers,
Slide 5: Key Investment Highlights
| KEY INVESTMENT HIGHLIGHTS #1 Rated DFS and Sportsbook Platform (2) Massive Global Online Gaming Opportunity 1 2 The Premier Brand in Digital Sports Entertainment 3 Acquiring SBTech, a Leader and Innovator in Sports Betting Technology 4 Proven Leader in New Jersey with Rapid Growth Trajectory 5 Pur
Slide 6: Massive Global Market Opportunity
| $364 $371 $382 $398 $38 $42 $46 $51 2015A 2016A 2017A 2018P Brick & mortar Online / mobile 5 MASSIVE GLOBAL MARKET OPPORTUNITY GLOBAL MOVEMENT TOWARDS REGULATION Source: Eilers and Krejcik Gaming. 2018 Oxford Economics U.S. population estimates. H2 Gambling Capital Global All Product Summary Repor
Slide 7: U.S. Online Sports Betting Market Will Be the Largest Globally
| ESTIMATED U.S. ONLINE SPORTS BETTING MARKET AT MATURITY $14 $15 $18 $22 $23 (1) ($ in billions) 6 1 U.S. ONLINE SPORTS BETTING MARKET WILL BE THE LARGEST GLOBALLY Source: New Jersey Division of Gaming Enforcement; H2 Gambling Capital Global All Product Summary Report, June 2019; U.S. Census Bureau
Slide 8: U.S. iGaming Is the Next Wave
| 17 % 17 % 15 % 5% 5% 5% 7% 7% 5% 6% 6% 6% 8% 8% 7% 9% 9% 8% 9% 9% 9% 15% 14% 14% 8% 10% 14% 16% 15% 18% Jul-19 Aug-19 Sep-19 $123 $149 $197 $246 $299 $422 $452 2014A 2015A 2016A 2017A 2018A LTM 9/30/19A Q1-Q3 '19 Annualized NJ iGAMING GGR U.S. i GAMING IS THE NEXT WAVE Source: New Jersey Division
Slide 9: The U.S. Sports and iGaming Opportunity: ~$40BN TAM
| $18BN Implied Total U.S. Market (1) 8 1 THE U.S . SPORTS AND i GAMING OPPORTUNITY: ~$40BN TAM Source: New Jersey Division of Gaming Enforcement. (1) Based on median of estimates as presented on page 6. (2) Extrapolation based on annualized New Jersey iGaming GGR for nine months ended September 30,
Slide 10: DFS Is the Foundation for U.S. Sports and Online Gaming
| 22% 13% 4% 2% 1% 1% 1% 1% DK IS TOP OF MIND WITH CONSUMERS 9 DFS IS THE FOUNDATION FOR U.S. SPORTS AND ONLINE GAMING Question asked: “When you think about brands that allow you to win money on sporting events, what is the first brand that comes to mind?” Source: National survey of current online s
Slide 11: Data Analytics Empower Our Cross-Sell Capabilities
| 63% 56% 36% 75% 28% 49% 23% 26% 27% 8% 8% 61% 46% 21% 37% 13% 7% 13% 14% 20% 4% 4% 50% 30% 17% 36% 7% 5% 24% 17% 11% 6% 4% 54% 30% 17% 35% 8% 5% 21% 14% 17% 6% 4% 55% 40% 23% 37% 12% 8% 36% 13% 19% 6% 6% 45% 22% 17% 30% 4% 3% 16% 14% 16% 11% 4% 70% 50% 39% 38% 6% 4% 38% 22% 25% 22% 9% 90% 47% 27%
Slide 12: SBTech: The World Leader in Online Gaming Technology
| 11 SBTECH: THE WORLD LEADER IN ONLINE GAMING TECHNOLOGY COMPANY OVERVIEW REVENUE BY GEOGRAPHY 1,080+ employees 8+ global offices 20+ regulated markets / jurisdictions 10+ years of experience Industry leader in B2B sports betting technology Positioned as one of the fastest growing tech firms within
Slide 13: DK & SBT: Technology Powering the Platform
| 12 DK & SBT: TECHNOLOGY POWERING THE PLATFORM Product innovation : x A bility to introduce more unique pre - game, in - game, and parlay bets Data analytics : x Through risk management tools, can more effectively set odds and increase hold percentages Diversified revenues : x Access to new markets
Slide 14: SBTech Is the Premier Full-Service Turnkey Technology Provider
| 13 SBTECH IS THE PREMIER FULL - SERVICE TURNKEY TECHNOLOGY PROVIDER Models and algorithms x x x x x x Bet engine x x x x x x Trading & risk management tools x Trading services x x x x Bespoke risk & liability strategy x x Sportsbook (Turnkey) x x APIs x x x x x x Platform x x x x x Marketing & bon
Slide 15: Proven Success in New Jersey - Market Share
| $81 $75 $28 $9 $3 $3 $2 $2 $0 $0 14 PROVEN SUCCESS IN NEW JERSEY – MARKET SHARE 37% SEPTEMBER 2018 – SEPTEMBER 2019 OSB REVENUE BY SPORTSBOOK OPERATOR Online market share 40% 14% 4 % 2 % 1 % 1 % OSB operator 1 % ($ in millions) Source: New Jersey Division of Gaming Enforcement. Note: Market share
Slide 16: Strong ROI on Early Marketing Investment in New Jersey
| 15 STRONG ROI ON EARLY MARKETING INVESTMENT IN NEW JERSEY Note: LTV calculated as 5 years of undiscounted gross profit (less than 1 year of actuals, remainder is a projection) plus a te rminal value assuming a 30% discount rate and 0% growth rate. NJ Acquisition Spend accounts for external marketi
Slide 17: Expected New Jersey Contribution Profit Demonstrates Speed to Profitability
| $26 $120 $153 $196 $21 $84 $111 $152 $8 $27 $44 $72 ($10) ($11) $9 $49 GGR NGR Gross profit Contribution profit 16 4 EXPECTED NEW JERSEY CONTRIBUTION PROFIT DEMONSTRATES SPEED TO PROFITABILITY NEW JERSEY SERVES AS EXAMPLE OF STATE - BY - STATE ECONOMIC RAMP Note: Reflective of initial performance
Slide 18: New Jersey Will Achieve 29% Contribution Margin
| 17 NEW JERSEY WILL ACHIEVE 29% CONTRIBUTION MARGIN 4 NEW JERSEY OSB UNIT ECONOMICS (EXPECTED YEAR 5) By Year 5, marketing spend rationalizes, allowing for 29% contribution margin (% of Gross Revenue) 100% 78% 39% 29% Gross Revenue Promotions Net Revenue Taxes Platform Processing Revenue Share Gros
Slide 19: Combined Company Projection Model
| $192 $226 $305 $400 $550 $44 $80 $110 $140 $150 $236 $306 $415 $540 $700 2017 2018 2019E 2020E 2021E Source: Management projections 18 COMBINED COMPANY PROJECTION MODEL 5 HISTORICAL / PROJECTED NET REVENUE ($ in millions) ASSUMPTIONS 2020 Assumptions − Online sportsbook live in current "line - of
Slide 20: Illustrative Path to $1 Billion+ in EBITDA
| $0.3 $2.3 $0.7 $0.4 $3.7 $(1.8) $2.0 $(0.4) $1.7 $(0.6) $0.1 $1.2 Net Revenue COGS Gross Profit Marketing Exp. Contribution Profit SG&A Synergies EBITDA 19 ILLUSTRATIVE PATH TO $1 BILLION+ IN EBITDA 5 (1) Assumes 30% of U.S. population has access to legalized iGaming with DraftKings achieving 15%
Slide 21: Proposed Transaction Summary
| 20 PROPOSED TRANSACTION SUMMARY Diamond Eagle Acquisition Corp. is a publicly listed special purpose acquisition vehicle with over $400 million in cash DEAC has agreed to combine with DraftKings and SBTech — Values the combined DK and SBT at $2.7 billion — Represents an attractive entry multiple o
Slide 22: Appendix
APPENDIX
Slide 23: Comparable Company Benchmarking
| EV / 2021E Revenue 2019E – 2021E Revenue CAGR EV / 2021E Revenue – Growth Adjusted (1) EV / 2020E EBITDA (2) High Growth x x Underpenetrated TAM x x ? Customer Engagement x x x x High LTV x x ? x Mobile First x x ? Millennial Audience x x x ? Data / Analytics x x x x Network Effects x x x x Vertic
Slide 24: Comparable Company Benchmarking
| COMPARABLE COMPANY BENCHMARKING 23 Source: Latest publicly available financial statements, IBES; market data as of December 20, 2019 (1) Equity Market Cap based on diluted shares outstanding. (2) Projected revenues and EBITDA are based on IBES median estimates. (3) Not pro forma for announced merg
Slide 25: Experienced and Founder-Led Leadership Team
| 24 EXPERIENCED AND FOUNDER - LED LEADERSHIP TEAM Years experience Oversees strategy and operations, funding and partnerships Duke University (B.A., Economics, B.S., Computer Science) Founded DraftKings in 2012 Jason Robins Chief Executive Officer (Co - founder) 16 Oversees technology, product mana
Slide 26: SBTech Has an Experienced Management Team to Drive Continued Growth
| 25 SBTECH HAS AN EXPERIENCED MANAGEMENT TEAM TO DRIVE CONTINUED GROWTH Years experience Joined in February 2016 Previously held research positions at Deutsche Bank and Numis Securities Richard Carter Chief Executive Officer 14 Joined in December 2018 to manage global operations Previously held lea