DraftKings Fined $200K for SEC Violation Over Social Posts

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00:00DraftKings, we've got news on them, social media content, which is now so prevalent,

00:09and everybody's doing social media posts, everybody's giving out pics online.

00:12DraftKings, though, got pinched for $200,000.

00:15What happened here?

00:16Yeah, DraftKings was hit with an SEC violation where they have to pay the $200K.

00:22It actually stems from their CEO, Jason Robbins, posting on social media about the company's

00:26strong growth a week before earnings.

00:29The company came out, did not admit or deny any of the findings, but they actually agreed

00:33to pay the fine.

00:35Basically, the regulation that was violated here was fair disclosure, according to the

00:40SEC.

00:41Robbins posted on social media talking about massive potential for growth in new markets,

00:47states that DraftKings launched in either 2018 or 2019 with sports betting, which ended

00:52up being a key component of the earnings call, which was held seven days later.

00:56He talked about revenue growing 80% in those states, and it's really become a big focal

01:01point for the company talking about how we're going to be profitable and continue to get

01:05money even without new state launches.

01:07The problem here, according to the SEC, is that he, quote-unquote, selectively disclosed

01:12info to investors.

01:14It sort of has to be disclosing info to everyone at the same time, saying he should have waited

01:20for earnings to disclose this.

01:21Now, social media can be used to make material public, but it has to be on an account that

01:27is flagged that will be sharing the information, at least that's according to the reporting

01:32from my colleague Matthew Waters, who did a great job covering this for us at Legal

01:36Sports Report.

01:37So neither of Robbins' Twitter accounts or LinkedIn accounts had been identified as these

01:46accounts where people could receive updates about sensitive stock information.

01:50So essentially, it looks like he jumped the gun here and they got hit with a $200,000

01:55fine because of it.

01:56Not a huge deal in the grand scheme of things, but definitely something that the company

02:00will not want to keep repeating.

02:01All right.

02:02Finally, Sam, we've got a couple of minutes left.

02:04Let's get an update on Nevada.

02:06I know there's some financial numbers in there, average hold numbers.

02:10Seems to be always a successful run for Nevada, no matter what time of the year it is, especially

02:14with football season in this quarter beginning.

02:17Yeah, Nevada is always a good benchmark for how Las Vegas-based sportsbooks are doing.

02:21We saw August, they actually grew revenue and handle by a lot despite a year where revenue

02:27and handle has been down.

02:28Pretty much overall, it was only the third month this year with year-over-year growth,

02:33which should set them up pretty well as we enter football season, postseason baseball,

02:38the NBA.

02:39They had about $455 million bet during the month, despite a below average hold rate of

02:44only 5.5%.

02:45Everywhere else in the country, hold rates are about 9.7%.

02:49Nevada has a lot of the money bet in person, which kind of changes the framework of how

02:53that all comes in.

02:54I think baseball really helped with the postseason push there with the wildcard races in the

02:59AL and the NL coming down to the wire.

03:01Always so amazed when you have 182 games that can come down to the wire, but it's really

03:05good for sportsbooks, obviously, as we see in Nevada.

03:08And like you alluded to, Craig, I would expect as the football season numbers roll in from

03:12September and then into October, we're only going to see this go up and up, especially

03:16with college football heating up as well.

03:18So good sign for the sportsbooks, and I'd expect it to be their second straight month

03:22of growth once September comes in.

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