Carlo Santarelli: Jay, as you think about the guidance parameters you set forth with interactive for 2024, obviously, with — if we put the 2 launches in New York and North Carolina aside, what is kind of underlying that assumption in terms of promo reinvestments as — to the extent you could answer that but where do you kind of imagine promo as a percentage of handle as a percentage of GGR, however you choose to think about it, what’s kind of embedded in that assumption at this point?
Jay Snowden: Yes. I would say, Carlo, without giving exact detail that we anticipate promo as a percentage of handle going forward to be really at market levels. We’re not anticipating being the highest we’re not anticipating being the lowest. It probably will fluctuate a little bit month-to-month depending on what we have going on around March Madness integrations with ESPN. If we — because remember, a lot of that is driven by top of funnel. And so the more successful you are in driving people into the ecosystem, you’re going to peak in that particular month. And so there’s probably not going to be a lot of volatility during the late spring and summer months with basically MLB but I think it depends on how successful we are in North Carolina could drive that number higher, of course, in March.
When we launched in New York, I would expect it to bump of course but pretty steady otherwise to be right at market. We’re not — our goal is not to be higher or lower than where most others are which is depending on the state right around 3%, 2.5%, 3%, 3.5%, right in that range.
Carlo Santarelli: And then, if I could, just 2 questions on clarifications on things you guys said relating to the brick-and-mortar business. First, Jay, you talked about the 4 projects that are currently underway first half of ’26. Will there be, I think, late 2025 was the expectation for some — is that all of them will now be first half of ’26 or you will complete the fourth in the first half of ’26?
Jay Snowden: Yes. And we didn’t mean to be confusing there but we’ll have all 4 done and open in the first half of ’26, could 1 or 2 of them hit late ’25 Yes. So we really haven’t changed. We just thought to be clear to say you should expect all 4 to be open and operating in the first half of ’26 but it will be opening the 4 of them between late ’25 and mid ’26.
Operator: Our next question comes from Shaun Kelley with Bank of America.
Shaun Kelley: Jay, I’m hoping you could just help us break down maybe the implied revenue forecast for 2024 a bit more granularly. If we — if we back into it on the digital side, it seems to imply roughly — and again, it will depend on everybody’s TAM here but maybe 6% to 7% OSB market share. So that’s pretty consistent with where we’re at today, albeit on a national level, so probably including New York and maybe North Carolina. So I guess the question is, is that right? Is that kind of like run rating about where you are on a same-state basis, all you need to be successful and hit your revenue target in 2024 on digital? Or do you need a pickup or materially better monetization or product mix as we move through the year from here?
Jay Snowden: No, I think your back of the envelope math is right, Shaun and that’s a level that gets us to this interactive result on the EBITDA line. We anticipate that it’s going to continue to ramp as we get toward the end of the year and football season from, we’ve got a lot of product enhancements and deeper integrations with ESPN planned over the course of the next 3, 4, 5, 6 months, really targeting September to be ready for football season. So I would expect that fourth quarter should be a quarter that you see that start to really come together. And I think we would be exiting 2024 with real momentum from a handle market share perspective given the enhancements to the overall experience that I mentioned earlier. So that’s the math.
We’re not really super focused on where we are today on market share. It’s where we’re going to be in September and beyond. I think it will probably fluctuate around where we’re at now given the stability that we’ve seen in daily, weekly and monthly active users, we make more enhancements to the product. I think it becomes more sticky. You start to get more share of wallet. Some of the newer players, you’ve brought into the ecosystem. I think they spend more time on the product. They go from betting once a week to twice a week. And so we think that’s really going to ramp up. And we picked up so many new users. We covered that a couple of times that it takes the pressure off of us to feel like we need to continue at that pace. It’s probably not possible.
But we have 2 great state launches, 9% of the U.S. population. We can continue to be sort of at market with regard to our new player, new deposit sign up. We’re not looking to lead the market but certainly be at market. And let the ESPN brand and all the integrations take care of the rest. That’s a recipe that we think makes a lot of sense and it’s tremendously efficient as we go. But you’re correct in your back of the envelope, although we expect to be ramping towards the end of the year into ’25.
Shaun Kelley: Super. And then sort of maybe drilling down a layer, probably the best way for us to gauge some of your success and improvement on the product side is just going to be watching some of your implied that mix and really your theoretical or your hold rate improve as we move through the year. Could you just talk a little bit about where your theoretical sits today? Kind of we hear numbers obviously for the best-of-breed guys now easily approaching double digit, maybe even low teens. Where are you today just given sort of your mix of customers, our casual better? And kind of how do you expect, when do you expect us to kind of start to see some more measurable improvement in that. Again, I’m putting this in the context of some of the data we’ve been received where some of the state-level hold rates in January have been really, really low relative to market. So maybe just help us put those pieces together.
Jay Snowden: Yes. I’ll talk about kind of high level where we think we are and where we want to be and then I’ll let Todd jump in on sort of what’s been happening in the last couple of months because a lot of that’s been done with focus and intention as we continue to drive top of funnel demand. I think today, based on the mix, we’re seeing a higher Parlay mix today than we’ve ever seen which is great. But we’re still below market and we know that our Parlay mix, though it’s continuing to get better. We’ve got a little ways to go on pre-package, prepopulated Parlay offerings and sort of a Parlay lounge that you can go to and much like the top competitors of ours have today. That’s something that we actually feel like it’s all upside from here.
So we’re probably more at that 7% to 8% kind of theoretically today but we’ll be continuing to gradually build that up to double digit. I think it’s just a matter of time, Shaun, before we get that Parlay mix and especially on the same game side which is where we’re not as strong today but we’re going to continue to put a lot of focus and energy there from a product enhancement standpoint between now and football season that we should be able to catch the others over time. But it may not be done in 2024 but I don’t think it’s going to go beyond 2025, given that we can now focus so many of our resources on product enhancements and features in UI/UX as opposed to just deploying state launch, deploying resources around state launches and migrations.
Todd, do you want to speak a little bit about what we’ve seen so far.
Todd George: Yes. Thanks, Jay. And thanks, Shaun. The only thing I would add to that as we are going out there and growing our database that we touched on multiple times, you’ve got this mix of promo spend that everybody does but you also have odds boost at your disposal that become a great acquisition tool and get people into the ecosystem. So what we were able to do through use of odds boost is bring people in during the — especially during the playoffs and then carry that over through the Super Bowl and get people into the ecosystem. Also, I would say that the trends right now looking a lot like early years for some of the competitive set. So we’re very comfortable with the progress we’re making and expect going into next year with a lot of the work that’s being done as we sit here today, that we’ll see that same progress.
The number of people that are taking advantage of the Parlay’s and finding those to be really attractive is encouraging for us as we move into the next phase.
Operator: Our next question comes from Barry Jonas with Truist Securities.
Barry Jonas: ESPN just announced plans with Fox and Discovery for a new streaming service JV. Any sense yet if and how ESPN BET could participate?
Jay Snowden: Yes. Barry, the way we’ve gotten that question quite a bit. The way to think about that is — this is the way I was described by Disney, I’m not speaking for them but just repeating what they said on their call. This is really about content distribution. It’s about getting in more households and on more devices as people have continued to move away from cable. This is another option to have a streaming package that would include ESPN and ESPN content. So you should anticipate that if you’re watching ESPN today, whether that’s digitally streaming or you’re watching that on linear that as you see integrations in the shows on ESPN that, that would carry over to this new streaming platform as well. Sports Center is still Sports Center and Get Up and still Get Up and the integrations in those shows would be as they are today. It’s just a matter of providing more access to ESPN to more people in the country.
