DraftKings sees instant demand in new NFT marketplace

DraftKings North America President Matt Kalish explains why now is the right time to launch DraftKings Marketplace.

Video transcript

- DraftKings NFT Marketplace went live today and the potential for NFC already. The market overall is $2.5 billion, so who better to explain why they're going into this and how you can get some of the action, we invite into the stream another co-founder from DraftKings, Matt Kalish. He's the North American president for DraftKings. And congratulations, you're alive. How'd the first day go because there's a lot to talk about that's coming down the pike in just the next few days.

MATT KALISH: Thank you. Yeah, it's always a really fun day whenever we're dropping new product, especially an entire platform. Over the last several months, we've built up what we think will be one of the preeminent NFT ecosystems in the world. DraftKing's Marketplace just released today. We did our first drop just minutes ago at 3:00 PM Eastern. It was a Tom Brady related drop as a part of autographs preseason access collection. It was a drop of 5,000 and it sold instantly, so we're really excited about that early adoption.

And we knew that that was going to happen. Our audience, we have millions of customers on DraftKings who are some of the earliest adopters in any new technological trend. Early adopters on the blockchain with crypto, with NFTs, and so we knew that this would be tremendously popular with our audience and definitely weren't disappointed.

- Matt, it certainly does seem like it is popular with your audience, but I also think it's fair to say that there's probably a fair share of your audience out there that doesn't really get NFT. So basically just explain to us how this marketplace works and why you think this is such a huge opportunity for you.

MATT KALISH: Well, at DraftKings we're really focused on playing to our strength, which is we want to really lead with a really simple, accessible, technological solution to give users access to digital collectibles in a way that's very mainstream. There's definitely a lot of our users who aren't yet comfortable transacting in cryptocurrency or going out and participating in some of the drops maybe on the Ethereum blockchain or something like that. But they do have an account on DraftKings. They're carrying a balance in US dollars. And so what we really did was integrated the marketplace into that same experience.

It's compatible with the account people already have. Transactions are in US. Our first drop was $12, so it wasn't like an unreachable price point to participate in something. So we're really focused on that mainstream accessibility. And all throughout the day we'll be doing more drops of this Tom Brady pre-season access collection. Look forward to seeing how some of the different versions go. And then on Friday we'll be right back with a really special drop around some Brady signed autograph editions of this drop. So extremely pumped up to be in market.

- Matt, I think a lot of us are converts to NFT, accepting the fact that look, there's a value in owning a bit of code. You can't touch it, you can't hold it, you can't put it on the wall, but you're the only one who has that original bit of code, which might be assigned to an autograph of Tom Brady. That might go for $1,500, it might go for more in the future. But what sustains the desire for that?

This is a generational thing. I think people my age prefer to actually hold it and put it on the wall. Why do younger people want this?

MATT KALISH: Well, I think people are really figuring out now that there's not a real big difference between physical and digital collectibles in value. if you think about the $1 of cardboard, $0.50 of ink that a baseball card is printed on, that's not what makes that card valuable. It's the scarcity of it. It's whether or not that art and the athlete resonates with you and if that's something you want part of your collection. And in fact, what we've seen over the last several months is people really appreciate the simplicity of transacting with digital collectibles.

If you want to sell something, you have a physical card, it's a lot more difficult than selling a digital collectible on a platform like DraftKings Marketplace. It's much more like an eBay style experience where you can very quickly buy, sell, transact in a way that's instantaneous. So we've really seen a lot of those use cases kind of ramp up and people are starting to appreciate digital collectibles should be a big part of your collection for anything that you're passionate about.

- Matt, it's going to be a critical couple of months coming up for you at the NFL season. We know it's very important to your business. We talked about the popularity of Tom Brady here when it comes to NFTs, but what are you expecting to see this season just in terms of fan engagement and I guess, what are your-- how do you think it's going to compare to what you saw last year?

MATT KALISH: Well, I think innovations like the DraftKings Marketplace will really help us on the engagement front. We build our road map at DraftKings around our customer base. We call it skin in the game customer. It's people that don't just want to watch a game on their couch. They want to predict things. They want to compete with their friends. They want to play along with the game. And that same audience has spent more and more time in areas like collectibles and crypto or day trading, or a lot of different hobbies that aren't just our core products of fantasy and sports betting.

And so by covering a little bit more of that lifestyle, by being a little bit more culturally relevant with what's happening right now in our users' life, I think that will really help us attract and retain attention and keep that retention rate really high over time.

- Matt Kalish, DraftKings North America president, also co-founder. Congratulations on the NFT marketplace dropping today and continued success.