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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

xý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2020~~ 2021


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________.

Commission file number 001-38908

DRAFTKINGS INC.

(Exact name of registrant as specified in its charter)


Nevada			84-4052441
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

222 Berkeley Street, 5th Floor

Boston, MA 02116

(Address of principal executive offices) (Zip Code)

(617) 986-6744

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value

DKNG

The Nasdaq Stock Market LLC

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No xý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ¨ ¨ No xý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Registration S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer xý Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ ¨ No xý

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 30, ~~2020~~2021, the last business day of the registrant's most recently completed second fiscal quarter, was $819.52 billion based upon the closing price reported for such date on the Nasdaq Global Select Market.

As of February 2416, ~~2021~~2022, there were ~~397~~408,~~700~~670,~~032~~263 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 393,013,951 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

Documents Incorporated by Reference:

Portions of the registrant’s definitive proxy statement for its ~~2021~~2022 Annual Meeting of Stockholders, or the Proxy Statement, to be filed within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, are incorporated by reference in Part III. Except with respect to information specifically incorporated by reference in this Annual Report, the Proxy Statement shall not be deemed to be filed as part hereof.

TABLE OF CONTENTS
			~~Page~~		Page
Cautionary Statement Regarding Forward-Looking Statements			3		2
Part I.
	~~Item 1.~~	~~Business~~	4Item 1.	Business	3
	~~Item 1A.~~	~~Risk Factors~~	14Item 1A.	Risk Factors	13
	~~Item 1B.~~	~~Unresolved Staff Comments~~	45Item 1B.	Unresolved Staff Comments	44
	~~Item 2.~~	~~Properties~~	45Item 2.	Properties	44
	~~Item 3.~~	~~Legal Proceedings~~	46Item 3.	Legal Proceedings	44
	~~Item 4.~~	~~Mine Safety Disclosures~~	49Item 4.	Mine Safety Disclosures	50
Part II.
	~~Item 5.~~	~~Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~	50Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	51
	~~Item 6.~~	~~Selected Consolidated Financial Data~~	51Item 6.	[Reserved]	52
	~~Item 7.~~	~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~	52Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	53
	~~Item 7A.~~	~~Quantitative and Qualitative Disclosures About Market Risks~~	68Item 7A.	Quantitative and Qualitative Disclosures About Market Risks	68
	~~Item 8.~~	~~Financial Statements and Supplementary Data~~	69Item 8.	Financial Statements and Supplementary Data	68
	~~Item 9.~~	~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~	69Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	68
	~~Item 9A.~~	~~Controls and Procedures~~	69Item 9A.	Controls and Procedures	68
	~~Item 9B.~~	~~Other Information~~	69Item 9B.	Other Information	69
Part III.
			Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	69
	Item 10.	Directors, Executive Officers and Corporate Governance	70
Part III.
	Item 11.	Executive Compensation	70
			Item 10.	Directors, Executive Officers and Corporate Governance	70
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
			Item 11.	Executive Compensation	70
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	70
			Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
	Item 14.	Principal Accountant Fees and Services	70
			Item 13.	Certain Relationships and Related Transactions, and Director Independence	70
Part IV.
			Item 14.	Principal Accountant Fees and Services	70
	Item 15.	Exhibits, Financial Statement Schedules	71
Part IV.
	Item 16.	Form 10-K Summary	78
			Item 15.	Exhibits, Financial Statement Schedules	71
Signatures			79
			Item 16.	Form 10-K Summary	79
Signatures					80

2 1

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements depend upon events, risks and uncertainties that may be outside of our control. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. You are cautioned that our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control, and, consequently, our actual results may differ materially from those projected.

Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled “Risk Factors” included elsewhere in this Report. Any statements contained herein that are not statements of historical fact may be forward-looking statements.

● •factors relating to our business, operations and financial performance, including:

● •our ability to effectively compete in the global entertainment and gaming industries;

● •our ability to successfully acquire and integrate new operations;

● •our ability to obtain and maintain licenses with gaming authorities;

● •our inability to recognize deferred tax assets and tax loss carryforwards;

● •market and global conditions and economic factors beyond our control, including the potential adverse effects of the ongoing global coronavirus (“COVID-19”) pandemic on capital markets, general economic conditions, unemployment and our liquidity, operations and personnel;

● •intense competition and competitive pressures from other companies worldwide in the industries in which we operate;

● •our ability to raise financing in the future;

● •our success in retaining or recruiting officers, key employees or directors; and

● •litigation and the ability to adequately protect our intellectual property rights.

Due to the uncertain nature of these factors, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any of these statements to reflect events or circumstances occurring after the date of this Report. New factors may emerge and it is not possible to predict all factors that may affect our business and prospects.

3 2

PART I

Item 1. Business.

Unless the context otherwise requires, the “Company”, “DraftKings”, “New DraftKings”, “we,” “our,” “us” and similar terms refer to DraftKings Inc., a Nevada corporation.

Overview

We are a digital sports entertainment and gaming company. We provide users with daily fantasy sports (“DFS”), sports betting (“Sportsbook”) and online casino (“iGaming”) opportunities, as well as media and weother online consumer product offerings. We are also involved in the design, development, and licensing of sports betting and casino gaming software for online and retail sportsbook and casino gaming products.

Our mission is to make life more exciting by responsibly creating the world’s favorite real-money games and betting experiences. We accomplish this by creating an environment where our users can find enjoyment and fulfillment through ~~daily~~DFS, ~~fantasy~~Sportsbook ~~sports~~and ~~contests~~iGaming, as well as media and other online consumer product offerings. We are also highly focused on our responsibility as a steward of this new era in real-money gaming. Our ethics guide our decision making, with respect to both the tradition and integrity of sports ~~betting~~ and ~~iGaming~~our investments in regulatory compliance and consumer protection.

We ~~have~~ established a following among “skin-in-the-game” sports fans ~~brought~~through ~~together by~~ our robust daily fantasy sports technology that now powers millions of contest entries in peer-to-peer competitions every week. We leverage our technology, the scale and density of our user base and insights from approximately 57.5 3 million cumulative unique paid users to continuously improve our analytics, marketing and technology. For example, in 2013 we launched the first mobile app in daily fantasy sports, anticipating the behavioral shift of a user base that had historically relied on a desktop-only experience. Five years later, in August 2018, we launched the first mobile sportsbook in New Jersey and as of December 31, ~~2020~~2021, we offer our mobile sportsbook, retail sportsbook, iGaming or business-to-business products in 1018 states as we continue to expand our geographic footprint.

Our priorities are to (a) continue to invest in our products and ~~technology~~services, (b) launch our product offerings in new geographies, (c) ~~effectively integrate~~ ~~SBTech (Global) Limited (“SBTech” or “SBT”) to form a vertically integrated business, (d)~~ create replicable and predictable state-level unit economics in sports betting and iGaming and (ed) expand our other online consumer product offerings. When we launch Sportsbook and iGaming offerings in a new jurisdiction, we plan to invest in user acquisition, retention and cross-selling until the new jurisdiction provides a critical mass of users engaged across our product offerings.

We ~~aspire~~believe toour ~~develop new~~current ~~and~~technology ~~innovative~~is ~~products~~highly scalable with ~~our~~relatively ~~users~~minimal inincremental ~~mind~~technology ~~and~~spend required to belaunch asour ~~trustworthy~~product asofferings wein ~~are~~new ~~innovative~~jurisdictions. inWe ~~everything~~will wecontinue ~~bring~~ to ~~market. This~~manage isour ~~realized~~fixed-cost base in ~~what~~conjunction wewith ~~believe~~our tomarket beentry ~~leading-edge,~~plans ~~proprietary~~and ~~technology~~focus ~~that~~our ~~powers~~variable ~~real-money~~spend ~~games~~on marketing, user experience and ~~betting~~support ~~experiences designed~~and ~~for~~regulatory ~~the~~compliance ~~“skin-in-~~with the~~-game”~~ ~~sports~~goals ~~fan.~~of ~~Our~~becoming ~~vision~~the product of choice for ~~DraftKings~~users ~~has~~and ~~been~~maintaining ~~shaped~~favorable byrelationships ~~these~~with ~~users,~~regulators. ~~both~~We inexpect ~~who they~~to ~~are~~improve ~~today~~our ~~and~~profitability ~~who~~over wetime ~~anticipate~~(excluding ~~they~~the ~~will~~impact ~~become~~of asamortization ~~the~~of ~~entertainment~~acquired ~~and~~intangibles) ~~gaming~~through ~~industries~~cost ~~evolve.~~synergies ~~This~~and ~~vision~~new ~~underpins our~~opportunities ~~position~~driven asby aour ~~leader~~completed invertical ~~today’s~~integration ~~fast-growing~~of ~~global~~the ~~entertainment~~technology and ~~gaming~~expertise ~~industries~~of SBTech (Global) Limited (“SBTech”), which we acquired in April 2020.

~~During~~Our expected path to profitability is based on the ~~fiscal~~acceleration ~~years~~of ~~ended~~positive ~~December 31,~~contribution ~~2020,~~profit ~~2019~~growth ~~and 2018~~driven by marketing efficiencies as we ~~had~~continue ~~revenue~~the oftransition ~~$614.5~~from ~~million,~~local ~~$323.4 million,~~to ~~$226.3~~regional ~~million,~~to ~~approximately~~national ~~883~~advertising ~~thousand,~~as ~~684~~well ~~thousand~~as ~~and~~scale ~~601~~benefits ~~thousand average~~from ~~monthly~~investments ~~unique~~in ~~payers~~our ~~(“MUPs”)~~product and antechnology ~~average~~and ~~revenue~~general ~~per~~and ~~MUP~~administrative ~~for~~functions. ~~our~~On ~~business-to-consumer~~a ~~(“B2C”) operations~~consolidated ~~(“ARPMUP”)~~Adjusted ofEBITDA ~~$51~~basis, ~~$39~~we ~~and~~expect ~~$31.~~to ~~Refer~~achieve toprofitability ~~discussion~~when intotal ~~section~~contribution ~~“Key~~profit ~~Performance~~exceeds ~~Indicators~~the ~~– B2C~~fixed ~~Operations”~~costs ~~within~~of ~~Management’s~~our ~~Discussion~~business, ~~and~~which ~~Analysis~~depends, ofin ~~Financial~~part, ~~Condition~~on ~~and~~the ~~Results~~percentage of ~~Operations~~the ~~included herein~~U.S. ~~for~~adult ~~information~~population ~~regarding~~that has access to our ~~MUPs~~product offerings and ~~ARPMUP~~the other factors summarized in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”.

~~Business~~During ~~Combination~~the fiscal years ended December 31, 2021, 2020 and 2019, we had revenue of $1,296.0 million, $614.5 million, $323.4 million, average monthly unique payers ("MUPs") of 1,494 thousand, 883 thousand and 684 thousand and an average revenue per MUP for our business-to-consumer (“B2C”) operations (“ARPMUP”) of $67, $51 and $39. Refer to the discussion in section the “Key Performance Indicators – B2C Operations” within Management’s Discussion and Analysis of Financial Condition and Results of Operations included herein for information regarding our MUPs and ARPMUP.

We were incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of our legal predecessor, Diamond Eagle Acquisition Corp. (“DEAC”), a special purpose acquisition company. On April 23, 2020, DEAC consummated the transactions contemplated by the Business Combination Agreement dated December 22, 2019, as amended on April 7, 2020, (the “Business Combination”) and, in connection therewith:3

i.Business ~~DEAC merged with and into us, whereby we survived the merger and became the successor issuer to DEAC;~~Combination

iiWe were incorporated in Nevada as DEAC NV Merger Corp., wea ~~changed~~wholly owned subsidiary of our ~~name~~legal topredecessor, Diamond Eagle Acquisition Corp. (“~~DraftKings~~DEAC”), ~~Inc~~a special purpose acquisition company. On April 23, 2020, DEAC consummated the transactions contemplated by the Business Combination Agreement dated December 22, 2019, as amended on April 7, 2020, (the “Business Combination”;) and, in connection therewith:

~~iii~~i.DEAC wemerged ~~acquired~~with ~~DraftKings~~and ~~Inc.~~into us, awhereby ~~Delaware~~we ~~corporation~~survived ~~(“Old~~the ~~DK”),~~merger byand ~~way~~became ofthe asuccessor ~~merger~~issuer to DEAC;

ivii. we ~~acquired~~changed ~~all~~our ofname ~~the~~to ~~issued and outstanding share capital of SBTech (the~~ “~~SBTech~~DraftKings ~~Acquisition~~Inc.”); ~~and~~

viii.we ~~DEAC’s~~acquired ~~publicly~~DraftKings ~~traded~~Inc., ~~units~~a ~~(Nasdaq:~~Delaware ~~DEACU)~~corporation ~~separated into their components of publicly traded DEAC Class A common stock~~ (~~Nasdaq:~~“Old ~~DEAC~~DK”) ~~and DEAC public warrants (Nasdaq: DEACW)~~, ~~and~~by ~~each~~way ~~outstanding share~~ of ~~DEAC Class A common stock was exchanged, on~~ a ~~one-for-one basis, for shares of our Class A common stock and all of DEAC’s outstanding warrants became warrants to acquire shares of our Class A common stock.~~merger;

4 iv.we acquired all of the issued and outstanding share capital of SBTech (the “SBTech Acquisition”); and

~~Upon~~v.DEAC’s ~~consummation~~publicly traded units (Nasdaq: DEACU) separated into their components of ~~the~~publicly ~~preceding~~traded ~~transactions~~DEAC Class A common stock (Nasdaq: DEAC) and DEAC public warrants (Nasdaq: DEACW), and each outstanding share of DEAC Class A common stock was exchanged, on a one-for-one basis, for shares of our Class A common stock and all of DEAC’s outstanding warrants became warrants to acquire shares of our Class A common stock.

~~(i)~~Upon ~~Old~~consummation ~~DK and SBTech became wholly owned subsidiaries~~ of the ~~Company;~~preceding ~~and~~transactions:

(iii)Old ~~beginning~~DK ~~April 24, 2020, our shares of Class A common stock traded on the Nasdaq under the ticker symbol “DKNG”~~ and ~~our~~SBTech ~~warrants~~became ~~traded~~wholly onowned ~~Nasdaq~~subsidiaries ~~under~~of the ~~ticker~~Company; ~~symbol “DKNGW.” On July 7, 2020 we redeemed all of our outstanding public warrants that had not been exercised as of July 2, 2020~~ and ~~on July 20, 2020, we delisted our publicly traded warrants. Only our Class A common stock continues to be traded on the Nasdaq.~~

~~Our~~(ii)beginning ~~Products~~April 24, 2020, our shares of Class A common stock traded on the Nasdaq under the ticker symbol “DKNG” and our warrants traded on Nasdaq under the ticker symbol “DKNGW.” On July 7, 2020, we redeemed all of our outstanding public warrants that had not been exercised as of July 2, 2020 and on July 20, 2020, we delisted our publicly traded warrants. Only our Class A common stock continues to be traded on the Nasdaq.

Our ~~revenues are predominantly generated through our two reportable segments B2C and business-to-business (“B2B”) offerings.~~Products

~~Business~~Our revenues are predominantly generated through our two reportable segments B2C and business-to-~~consumer~~business (“B2B”) offerings.

~~We have three main B2C product offerings — daily fantasy sports (“DFS”), Sportsbook and iGaming. We consider these three offerings~~ Business-to be of a similar class of product, and together they accounted for 96%, 95% and 97% of DraftKings’ B2C revenues for the fiscal years ended December 31, 2020, 2019 and 2018, respectively. DFS, which was our sole product offering until 2018, historically drove our revenue results and accounts for a majority of our users; however, since we launched Sportsbook and iGaming in 2018, states where Sportsbook and iGaming have been approved accounted for a rapidly growing proportion of our users, which has contributed to our revenue growth. In addition to our three main product offerings, our B2C segment also offers advertising and sponsorship packages to targeted advertisers across our DFS product offerings, free games and content.-consumer

~~Below~~We ishave athree ~~breakdown~~ main B2C product offerings—DFS, Sportsbook and iGaming. We consider these three offerings to be of ~~how~~a ~~each~~similar product class, and together they accounted for 96%, 96% and 95% of DraftKings’ B2C revenues for the fiscal years ended December 31, 2021, 2020 and 2019, respectively. DFS, which was our sole product offering until 2018, historically drove our revenue results and accounts for a majority of our users; however, since we launched Sportsbook and iGaming in 2018, states where Sportsbook and iGaming have been approved accounted for a rapidly growing proportion of our users, which has contributed to our revenue growth. In addition to our three main product offerings, ~~function:~~our B2C segment also offers non-fungible tokens on DraftKings Marketplace and advertising and sponsorship packages to targeted advertisers across our DFS product offerings, free games and content.

~~Daily~~Below ~~Fantasy~~is ~~Sports -~~a ~~Since~~breakdown ~~our~~of ~~launch,~~how weeach ~~have~~DraftKings ~~monetized~~B2C ~~our DFS~~ offering by facilitating peer-to-peer play, whereby users compete against each other for prize money. We provide users with technology that establishes DFS contests, scores the contests, distributes the prizes and performs other administrative activities to enable the “skin-in-the-game” sports fan experience. Our revenue is the difference between the entry fees collected and the amounts paid out to users as prizes and customer incentives in a period.functions:

~~Sportsbook~~Daily -Fantasy Sports ~~betting involves~~- aSince ~~user~~our ~~placing~~launch, awe ~~bet~~have bymonetized ~~wagering~~our ~~money~~DFS onoffering anby ~~event~~facilitating atpeer-to-peer ~~some~~play, ~~fixed~~whereby ~~odds~~users ~~(“proposition”)~~compete ~~determined~~against byeach ~~DraftKings. In~~other ~~the~~for ~~event~~prize ~~the~~money. ~~user~~We ~~wins,~~provide ~~DraftKings~~users ~~pays~~with ~~out~~technology ~~the~~that ~~bet.~~establishes ~~Similar to~~ DFS contests, ~~Sportsbook~~scores ~~engages~~the ~~consumers~~contests, indistributes ~~their~~the ~~sports~~prizes ~~viewing~~and ~~experience. Our~~performs ~~Sportsbook~~other ~~revenue~~administrative isactivities ~~generated by setting odds that are intended~~ to ~~provide~~enable athe ~~built~~“skin-in-the-game” ~~theoretical~~sports ~~margin~~fan inexperience. ~~each~~Our ~~proposition offered~~revenue tois ~~our~~the ~~users.~~difference ~~While~~between the ~~actual~~entry ~~betting~~fees ~~patterns~~collected ~~of our users~~ and ~~outcomes~~the ofamounts ~~individual~~paid ~~events~~out ~~may~~to ~~cause~~users ~~volatility~~as ~~in our~~prizes ~~revenue,~~and wecustomer ~~believe~~incentives wein ~~can deliver~~ a ~~stable betting win margin over the long term~~period.

~~Revenue~~Sportsbook is- ~~realized~~Sports bybetting ~~taking the~~involves ~~settled~~a ~~handle~~user ~~for~~placing ~~betting~~a ~~markets~~bet ~~that~~by ~~have~~wagering ~~been~~money ~~resolved~~on ~~and~~an ~~subtracting~~event ~~the~~at ~~payouts~~some ~~for~~fixed ~~these~~odds ~~betting~~(“proposition”) ~~markets~~determined ~~such~~by ~~that the~~DraftKings. ~~difference~~In isthe event the ~~gross~~user ~~revenue~~wins, orDraftKings ~~“hold.”~~pays Inout ~~addition~~the tobet. ~~our~~Similar ~~online~~to ~~Sportsbook~~DFS, weSportsbook ~~also~~engages ~~maintain~~consumers ~~limited retail distribution~~ in ~~four~~their ~~states,~~sports inviewing ~~which~~experience. ~~our~~Our ~~retail~~Sportsbook revenue is ~~subject~~generated toby ~~individual~~setting ~~agreements~~odds ~~with~~that aare ~~land-based~~intended ~~casino~~to ~~partner~~provide (a ~~“skin”)~~built-in ~~that~~theoretical ~~provide~~margin ~~for~~in aeach ~~revenue~~proposition ~~share.~~offered ~~Retail~~to ~~distribution~~our ~~leverages~~users. While the ~~foot~~actual ~~traffic~~betting ~~for~~patterns ~~existing~~of ~~casino~~our ~~properties to~~users ~~convert~~and ~~their~~outcomes ~~customers~~of toindividual ~~bet~~events may cause volatility in our ~~Sportsbook~~revenue, ~~while~~we onbelieve ~~premise~~we can deliver a stable betting win margin over the long term.

iGaming - iGaming, or online casino, offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat and slot machines. For these offerings, we function similarly to land-based casinos, generating revenue through hold, or gross winnings, as users play against the house. In iGaming, we believe there is typically lower volatility versus land-based casinos since the average return to a player for specific games is easier to predict in advance based on game rules and statistics.4

~~Our~~Revenue ~~iGaming~~is ~~offering~~realized ~~consists of~~by ataking ~~combination~~the ofsettled ~~games~~handle ~~that~~for webetting markets that have ~~built~~been ~~in-house~~resolved and ~~licensed~~subtracting ~~content~~the ~~from~~payouts ~~suppliers~~for ~~such~~these asbetting ~~International~~markets ~~Gaming~~such ~~Technology, iForium,~~that ~~Scientific~~the ~~Games~~difference ~~Corporation,~~is ~~Spin~~the ~~and~~gross ~~Evolution~~revenue, ~~for~~or ~~Live Dealer services~~“hold.” ~~The~~In ~~latter~~addition ~~are subject~~ to ~~standard~~our ~~revenue-sharing agreements~~online ~~specific to each supplier~~Sportsbook, ~~whereby~~we ~~the~~also ~~supplier~~maintain ~~receives~~limited ~~a percentage~~retail ofdistribution ~~the~~in ~~net~~four ~~gaming~~states, ~~revenue~~in ~~generated~~which ~~from their respective casino games played utilizing~~ our ~~technology~~retail ~~dependent~~revenue onis ~~DraftKings’~~subject ~~overall~~to ~~gross~~individual ~~gaming~~agreements ~~revenue~~with ~~for~~a ~~iGaming. In~~land-based ~~exchange,~~casino ~~DraftKings~~partner ~~receives~~ (a ~~limited~~“skin”) ~~license~~that toprovide ~~offer~~for ~~the~~a ~~games~~revenue toshare. ~~users~~Retail indistribution ~~jurisdictions~~leverages ~~where~~the ~~use~~foot istraffic ~~approved~~for byexisting ~~regulatory authorities.~~casino ~~Revenue~~properties ~~generated~~to ~~through~~convert ~~our~~their ~~self-developed~~customers ~~major~~to ~~casino~~bet ~~games such as blackjack results~~ in ~~decreased~~our ~~revenue~~Sportsbook ~~share payments~~while ason ~~a percent of revenue~~premise.

5iGaming - iGaming, or online casino, offerings typically include the full suite of games available in land-based casinos, such as blackjack, roulette, baccarat and slot machines. For these offerings, we function similarly to land-based casinos, generating revenue through hold, or gross winnings, as users play against the house. In iGaming, we believe there is typically lower volatility versus land-based casinos since the average return to a player for specific games is easier to predict in advance based on game rules and statistics.

~~Advertising~~Our ~~and~~iGaming ~~Sponsorship -~~offering ~~Our~~consists ~~advertising~~of ~~packages~~a ~~range~~combination ~~from~~of ~~standard~~games adthat ~~placements~~we ~~and~~have ~~background~~built adin-house ~~placements~~and tolicensed ~~more~~content ~~high-touch~~from ~~integrations,~~ suppliers such as ~~sponsored~~International ~~DFS~~Gaming ~~contest~~Technology, ~~series~~iForium, orScientific ~~custom~~Games ~~site~~Corporation, ~~takeovers~~Spin and Evolution for Live Dealer services. ~~These~~The latter are ~~typically~~subject ~~served~~to ~~and~~standard ~~tracked~~revenue-sharing byagreements aspecific ~~range~~to each supplier, whereby the supplier receives a percentage of ~~advertising products~~the ~~that~~net ~~have~~gaming ~~been~~revenue ~~built~~generated ~~directly~~from ~~into~~their respective casino games played utilizing our ~~offerings and feature~~technology ~~partnerships~~dependent ~~with~~on ~~brand~~DraftKings’ ~~categories~~overall ~~ranging from~~gross ~~entertainment~~gaming revenue for iGaming. In exchange, DraftKings receives a limited license to ~~food~~offer the games to ~~automotive~~users in jurisdictions where use is approved by regulatory authorities. Revenue generated through our self-developed major casino games such as blackjack results in decreased revenue share payments as a percent of revenue.

~~Each~~DraftKings ~~advertising~~Marketplace ~~package~~- ~~is bespoke,~~We ~~and~~launched weDraftKings ~~offer~~Marketplace ~~each~~(“Marketplace”) ~~client~~during the third quarter of 2021. Marketplace is a ~~custom~~digital collectibles (a non-fungible token, or “~~menu~~NFT”) ofecosystem ~~advertising~~designed ~~options,~~for ~~which~~mainstream ~~include~~accessibility ~~online~~that ~~media~~offers curated initial NFT drops (~~such~~“Primary asSales”). ~~display~~In addition to the Primary Sales, ~~video~~ ~~and~~owners ~~audio~~of ~~advertisements~~NFTs ~~and~~on ~~page and~~Marketplace can list their NFTs for sale to other Marketplace customers (“~~skin~~Secondary Sales”). ~~sponsorship~~Once ~~takeovers),~~marked ~~custom~~for ~~content~~sale, ~~including~~with ~~branded video~~a ~~content~~chosen selling price, ~~live~~the ~~events~~NFT ~~such~~will asappear ~~sponsored~~on ~~watch~~the ~~parties~~Marketplace ~~and~~secondary ~~sponsored~~market. ~~free~~Customers orcan ~~paid~~browse ~~games,~~all ~~including~~available ~~daily~~NFTs ~~fantasy,~~within ~~pick’em~~ the secondary market and ~~bracket~~can ~~games~~opt to purchase based on the selling price.

~~Each~~The ~~advertising~~revenue ~~package~~we ~~has a~~earn ~~different~~is ~~pricing~~based ~~model,~~on ~~with~~ a ~~variety~~specific percentage of ~~factors affecting~~ the ~~pricing~~gross value of aeach ~~particular~~Primary ~~package~~Sale ~~including,~~or ~~but~~Secondary ~~not~~Sale. ~~limited to,~~The ~~(i) the~~revenue ~~sport~~is torecognized ~~which~~for ~~the~~each ~~package~~sale ~~relates~~when ~~and (ii)~~ the ~~demand~~NFT ~~for,~~is ~~and~~purchased ~~supply~~by ~~of,~~ the ~~individual~~end ~~package components~~user.

~~Sponsorships~~Advertising and ~~custom~~Sponsorship -~~built games~~ ~~and~~Our ~~content~~advertising ~~typically~~packages ~~have~~range ~~fixed~~from ~~fee~~standard ~~pricing.~~ad ~~Other~~placements ~~packages,~~and ~~such~~background asad ~~custom-branded~~placements ~~video~~to ~~content~~more orhigh-touch ~~online advertisements~~integrations, ~~are~~ ~~sold~~such ~~with~~as asponsored ~~guaranteed~~DFS ~~number~~contest ofseries ~~impressions,~~or ~~which~~custom ~~are~~site ~~priced~~takeovers. ~~per~~These aare ~~certain~~typically ~~number~~served ofand ~~guaranteed~~tracked ~~impressions.~~by ~~Each~~a ~~time~~range ~~a consumer~~of ~~sees~~advertising anproducts ~~advertisement~~that ~~while~~have ~~playing,~~been ~~watching,~~built ~~reading~~directly orinto ~~listening~~our toofferings aand ~~piece~~feature ofpartnerships ~~content~~with orbrand ~~playing~~categories aranging ~~game,~~from anentertainment ~~impression is~~to ~~counted~~food to automotive.

~~Offsetting~~Each ~~our~~advertising ~~revenues attributable~~package ~~to the B2C business~~ is ~~the~~bespoke, ~~portion~~and ~~of gross revenue that~~ we ~~allocate~~offer toeach ~~new~~client ~~and existing user incentives and promotions, which are awarded as~~ a ~~result~~custom “menu” of ~~game~~advertising ~~play or at our discretion~~options, ~~through~~which ~~loyalty~~include ~~programs,~~online ~~free~~media ~~plays,~~(such ~~deposit~~as ~~bonuses~~display, ~~discounts, rebates~~video orand ~~other~~audio ~~rewards~~advertisements and ~~incentives. These offsets can be redeemed across multiple product offerings~~ page and ~~are~~“skin” ~~generally~~sponsorship ~~used to~~takeovers), ~~acquire~~custom ~~new users~~content, ~~reactivate~~including ~~prior~~branded ~~users~~video ~~and~~content, ~~increase~~live ~~monetization~~events ~~from~~such ~~active~~as ~~users.~~sponsored Wewatch ~~leverage~~parties ~~our~~and ~~return~~sponsored onfree ~~investment models~~or ~~that~~paid ~~are~~games, ~~based~~including ondaily ~~lifetime~~fantasy, ~~value~~pick’em and ~~expected~~bracket ~~reactivation rates to determine appropriate promotional levels~~games.

~~Business-~~Each advertising package has a different pricing model, with a variety of factors affecting the pricing of a particular package including, but not limited to~~-business~~, (i) the sport to which the package relates and (ii) the demand for, and supply of, the individual package components.

WeSponsorships ~~supply~~and ~~B2B~~custom-built ~~sports betting~~games and ~~iGaming~~content ~~services~~typically ~~globally~~have ~~for~~fixed ~~various~~fee ~~gaming~~pricing. ~~operators~~Other packages, ~~resellers~~such ~~and~~as ~~government~~custom-~~run~~branded ~~lotteries.~~video ~~Our~~content ~~B2B~~or ~~business~~online ~~generates revenue~~advertisements, ~~from~~are ~~operators~~sold bywith ~~providing~~a ~~sports~~guaranteed ~~betting~~number ~~and~~of ~~integration~~impressions, towhich ~~iGaming~~are ~~content~~priced ~~directly~~per toa ~~operators~~certain innumber ~~exchange~~of ~~for~~guaranteed ~~a share~~impressions. ofEach ~~operators’~~time ~~revenues,~~a asconsumer ~~well~~sees asan ~~through~~advertisement ~~fixed~~while ~~fee~~playing, ~~contracts~~watching, ~~with~~reading ~~resellers.~~or ~~Contracts~~listening ~~with~~to ~~business~~a ~~customers~~piece ~~are typically~~of ~~awarded~~content ~~through~~or playing a ~~sales~~game, ~~process~~an orimpression ~~request~~is ~~for proposal~~counted.

InOffsetting ~~addition~~our revenues attributable to ~~providing for~~the aB2C ~~share~~business is the portion of ~~gaming~~gross revenue, ~~our~~that ~~B2B~~we ~~direct~~allocate ~~customer~~to ~~contracts~~new ~~are~~and ~~typically~~existing ~~non-exclusive~~user incentives and ~~run~~promotions, ~~for~~which are awarded as a ~~term~~result of ~~three~~game toplay ~~five years (with~~or ~~automatic~~at ~~renewal~~our ~~terms).~~discretion, ~~Our~~through ~~agreements~~loyalty ~~with~~programs, ~~resellers~~free ~~typically~~plays, ~~provide~~deposit ~~for~~bonuses, adiscounts, ~~base~~rebates ~~fee~~or ~~plus~~other arewards ~~fixed~~and ~~monthly~~incentives. ~~fee~~These ~~determined by~~offsets ~~the~~can ~~number~~be ofredeemed ~~operators~~across ~~with~~multiple ~~which~~product ~~the~~offerings ~~reseller~~and ~~contracts~~are generally used to ~~access~~acquire ~~our~~new ~~B2B~~users, ~~software~~reactivate prior users and ~~typically~~increase ~~run~~monetization ~~for~~from aactive ~~term~~users. ofWe ~~three years (with~~leverage ~~automatic~~our ~~renewal~~return-on-investment ~~terms)~~models that are based on gross profit paybacks, lifetime value, player segmentation and customer and revenue retention to determine appropriate promotional levels.

~~Seasonality~~5

Our business, particularly our B2C segment, experiences seasonality based on the relative popularity of certain sports. Although sporting events occur throughout the year, our users are typically most active in the fourth quarter due Business-to ~~the overlapping calendars of the NFL and NBA seasons, which are our most popular sports.~~-business

We supply B2B sports betting and iGaming services globally for various gaming operators, resellers and government-run lotteries. Our ~~Technology~~B2B business is primarily comprised of the operations of SBTech, which we acquired on April 23, 2020 with principal activities involving the design and ~~Product~~development ~~Development~~of sports betting and casino gaming software. Our B2B services are delivered through our proprietary software, and our complementary service offerings include trading and risk management and support for reporting, customer management and regulatory reporting requirements. Our B2B business generates revenue from operators by providing sports betting and integration to iGaming content directly to operators in exchange for a share of operators’ revenues, as well as through fixed fee contracts with resellers. Our agreements with resellers typically provide for a base fee plus a fixed monthly fee determined by the number of operators with which the reseller contracts to access our B2B software.

InThe ~~order~~operations toof ~~build the~~our ~~best~~B2B ~~real-money~~segment ~~games~~are ~~and~~concentrated ~~product~~mainly ~~offerings, we have invested~~ in ~~core~~Europe ~~disciplines~~and ~~across~~the ~~our~~United ~~technology,~~States. ~~analytics and marketing~~Previously, ~~which~~ ~~have~~SBTech ~~allowed~~offered usits toservices ~~rapidly~~through ~~bring~~a ~~innovative~~reseller ~~new~~model ~~experiences~~in toAsia. ~~market~~On ~~while~~April ~~gaining~~1, a2021, ~~unique~~the ~~understanding~~agreement ofwith ~~our~~the ~~users. The~~reseller ~~result~~was ~~has been market leadership in our industry~~terminated, ~~fueled~~with by a ~~brand~~transition ~~reputation~~period ~~and~~that ahas ~~depth~~already ended. As of ~~user~~December ~~trust~~31, ~~that~~2021, ~~has~~we ~~set~~no uslonger ~~apart from~~had ~~our~~agreements ~~competitors~~with any resellers.

Our product offerings are comprised of varying levels of proprietary and third-party software. These product offerings are bound together with a common account management and regulatory compliance service and can be accessed with the same account and wallet. Across our product offerings, we have endeavored to own the technology in-house for any critical component and to utilize a combination of new technologies, including data science and machine learning, to optimize conversion and efficiency.Seasonality

6 Our business, particularly our B2C segment, experiences seasonality based on the relative popularity of certain sports. Although sporting events occur throughout the year, our users are typically most active in the fourth quarter due to the overlapping calendars of the NFL and NBA seasons, which are our most popular sports.

DraftKings’ core product offerings are built on top of integrated, proprietary account management technology. This technology provides our users with access to their account history across all product offerings and a uniform identity verification system, which is critical in enabling seamless navigation from our national DFS audience to Sportsbook and iGaming products, as existing DFS users need not manage a separate set of account credentials and payment methods for each product offering. Our ~~users~~Technology also enjoy a highly functional wallet which, in many cases, permits user funds to flow freely from product to product. The technology is certified to safely store user payment information, which reduces our dependency on any particular payment processor, provides redundancy and ~~gives~~Product us the flexibility to route our payment volume to a processor of our choosing. In addition, our technology is built to be customizable to the specific regulations of individual jurisdictions. Through our B2B business, we also maintain an account management service that is used by our B2B operators, and as a result, we expect to realize synergies following completion of our integration with SBTech.Development

~~Across~~In ~~our~~order ~~product offerings,~~to webuild ~~actively~~the ~~use~~best ~~data~~real-money ~~science~~games and ~~machine~~product ~~learning to help optimize conversion and monetization. Within the DFS offering~~offerings, ~~data~~ ~~science~~we ~~algorithms~~have ~~are~~invested ~~used~~in tocore ~~customize~~disciplines aacross ~~user’s~~our ~~contest home screen based upon his or her past play history. We build recommendations by identifying the type of contests that a user is most likely to play~~technology, ~~along~~analytics ~~with the entry fee~~ and ~~prize~~marketing, ~~structure that~~which hehave orallowed ~~she~~us ~~will~~to ~~find~~rapidly ~~most~~bring ~~appealing.~~innovative Innew ~~addition,~~experiences ~~contest-pacing~~to ~~algorithms~~market ~~identify~~while ~~contests~~gaining ~~that might present~~ a ~~financial exposure~~unique ~~and~~understanding ~~increase~~of ~~the~~our ~~contests’~~users. ~~visibility~~The ~~within~~result ~~the~~has ~~product~~been ~~appropriately.~~market ~~Similarly,~~leadership ~~within~~in ~~the~~our ~~Sportsbook offering~~industry, ~~recommendation~~ ~~engines~~fueled ~~are~~by ~~used~~a tobrand ~~present~~reputation ~~betting markets to users based upon their past play history~~ and ~~location.~~a ~~These~~depth ~~services are~~of ~~also~~user ~~critical~~trust tothat ~~our~~has ~~back-end~~set ~~infrastructure,~~us asapart ~~they~~from ~~drive key elements of~~ our ~~fraud and compliance program~~competitors.

~~Marketing~~Our product offerings are comprised of varying levels of proprietary and third-party software. These product offerings are bound together with a common account management and regulatory compliance service and can be accessed with the same account and wallet. Across our product offerings, we have endeavored to own the technology in-house for any critical component and to utilize a combination of new technologies, including data science and machine learning, to optimize conversion and efficiency.

~~User~~DraftKings’ ~~Acquisition~~core ~~and~~product ~~Retention -~~offerings ~~Our~~are ~~ability~~built toon ~~effectively~~top ~~market~~of isintegrated, ~~paramount~~proprietary toaccount management technology. This technology provides our ~~operational~~users ~~success.~~with ~~Utilizing~~access ato ~~blend~~their ofaccount ~~analytics~~history across all product offerings and ~~data~~a ~~science as~~uniform ~~our~~identity ~~foundation~~verification system, wewhich ~~leverage~~is critical in enabling seamless navigation from our ~~marketing~~national DFS audience to ~~acquire~~Sportsbook and iGaming products, ~~retain~~as ~~and~~existing ~~reactivate~~DFS users ~~while~~need ~~building~~not manage a ~~trusted~~separate ~~consumer-facing~~set ~~brand~~of account credentials and payment methods for each product offering. We ~~use~~Our ausers ~~variety~~also ofenjoy ~~free~~a ~~and~~highly ~~paid~~functional ~~marketing~~wallet ~~channels~~which, in ~~combination~~many ~~with~~cases, ~~compelling~~permits ~~offers~~user ~~and~~funds ~~exciting~~to ~~games,~~flow tofreely ~~achieve~~from ~~our objectives~~product to product. ~~Furthermore~~The technology is certified to safely store user payment information, wewhich ~~optimize~~reduces our ~~marketing~~dependency ~~spend~~on ~~using~~any ~~data~~particular ~~collected~~payment ~~since~~processor, ~~the~~provides ~~beginning~~redundancy ofand ~~our~~gives ~~operations,~~us asthe ~~well~~flexibility ~~as additional~~to ~~data~~route ~~that~~our wepayment ~~collect~~volume ~~from~~to ~~vendors,~~a ~~partners~~processor ~~and~~of ~~data~~our ~~providers~~choosing. ~~Our~~In ~~marketing~~addition, ~~spend~~our technology is ~~based~~built onto abe ~~return-on-investment model~~customizable ~~that~~to ~~considers~~the aspecific ~~variety~~regulations of ~~factors~~individual jurisdictions. Through our B2B business, ~~including~~we ~~the~~also ~~performance~~maintain ofan ~~different~~account ~~marketing~~management ~~channels,~~service ~~predicted~~that ~~lifetime~~is ~~value and~~used ~~behavior~~by ofour ~~users~~B2B ~~across~~operators, ~~various~~and ~~product~~as ~~offerings~~a result, ~~the~~we ~~location~~expect ofto improve our ~~users~~profitability ~~and~~over ~~our~~time ~~estimate~~(excluding the impact of ~~when~~amortization ~~enabling~~of ~~legislation and~~acquired ~~regulations~~intangibles) ~~for~~through ~~sports~~cost ~~betting~~synergies and ~~iGaming~~new ~~may~~opportunities ~~come~~driven toby ~~fruition~~our completed vertical integration of SBTech’s technology and expertise.

~~Where~~Across ~~paid~~our ~~marketing~~product ~~is concerned~~offerings, we ~~leverage~~actively ause ~~broad~~data ~~array~~science ofand ~~advertising~~machine ~~channels,~~learning ~~including~~to ~~television,~~help ~~radio,~~optimize ~~social~~conversion ~~media~~and ~~platforms~~monetization. ~~such~~Within asthe ~~Facebook~~DFS offering, ~~Instagram, Twitter~~ ~~and~~data ~~Snap,~~science ~~affiliates~~algorithms ~~and~~are ~~paid~~used ~~and~~to ~~organic~~customize ~~search,~~a ~~and~~user’s ~~other~~contest ~~digital~~home ~~channels~~screen ~~such~~based asupon ~~mobile~~his ~~display.~~or ~~For~~her ~~Sportsbook~~past ~~and iGaming,~~play ~~these~~history. ~~efforts~~We ~~are~~build ~~concentrated~~recommendations ~~within~~by identifying the ~~specific~~type ~~jurisdictions~~of contests that ~~have~~a ~~passed~~user ~~enabling~~is ~~legislation~~most ~~and~~likely ~~regulations~~to play, along with the entry fee and inprize ~~which~~structure wethat ~~operate~~he or ~~intend~~she towill ~~operate~~find ~~(which~~most ~~vary~~appealing. onIn aaddition, ~~per~~contest-~~offering~~pacing ~~basis).~~algorithms ~~Our~~identify ~~marketing~~contests ~~expenditures~~that ~~tend~~might topresent bea ~~highly seasonal,~~financial ~~with~~exposure ~~most~~and ~~spend~~increase ~~correlating~~the ~~with~~contests’ visibility within the ~~start~~product ofappropriately. aSimilarly, ~~sports~~within ~~season~~the Sportsbook offering, recommendation engines are used to present betting markets to users based upon their past play history and ~~during~~location. ~~its~~These ~~playoffs~~services are also critical to our back-end infrastructure, as they drive key elements of our fraud and ~~championships~~compliance program.

In addition to traditional paid advertising channels, we cross-promote our product offerings to our existing user base through internal channels such as mobile push notifications, email and text messages, and external channels such as Facebook, Twitter, Instagram and Snapchat. Through those channels, we use a combination of content, contests and promotions to engage existing users. Additionally, we incentivize our users to refer new users through our “Refer-a-Friend” program, offering incentives such as free entries into tournaments or free bets if the referred user ultimately interacts with our product offerings.6

Team and League Relationships - We engage in relationships with sports leagues to improve our brand and awareness, acquire users, improve user retention and create differentiated experiences for our users.Marketing

7 User Acquisition and Retention - Our ability to effectively market is paramount to our operational success. Utilizing a blend of analytics and data science as our foundation, we leverage our marketing to acquire, retain and reactivate users while building a trusted consumer-facing brand. We use a variety of free and paid marketing channels, in combination with compelling offers and exciting games, to achieve our objectives. Furthermore, we optimize our marketing spend using data collected since the beginning of our operations, as well as additional data that we collect from vendors, partners and data providers. Our marketing spend is based on a return-on-investment model that considers a variety of factors, including the performance of different marketing channels, predicted lifetime value and behavior of users across various product offerings, the location of our users and our estimate of when enabling legislation and regulations for sports betting and iGaming may come to fruition.

·Where Inpaid ~~September~~marketing ~~2019~~is concerned, we ~~entered~~leverage ~~into~~ a ~~multi-year~~broad ~~relationship~~array ~~with~~of ~~NFL~~advertising ~~Properties~~channels, ~~LLC~~including television, radio, social media platforms such as Facebook, Instagram, Twitter and ~~NFL~~Snap, ~~Enterprises~~affiliates ~~LLC~~and paid and organic search, and other digital channels such as mobile display. For Sportsbook and iGaming, these efforts are concentrated within the specific jurisdictions that have passed enabling legislation and regulations, and in which ~~our~~we ~~companies~~operate ~~agreed~~or intend to ~~collaborate~~operate (which vary on a ~~variety~~per-offering ofbasis). ~~content~~Our ~~and~~marketing ~~product~~expenditures ~~offerings~~tend onto be highly seasonal, with most spend correlating with the ~~DraftKings~~start ~~DFS~~of ~~app,~~a assports ~~well~~season asand ~~integrations~~during ~~across~~its ~~NFL~~playoffs ~~media~~and ~~properties~~championships.

· In ~~July~~addition ~~2019~~to traditional paid advertising channels, we ~~entered~~cross-promote ~~into~~our aproduct ~~multi-year~~offerings ~~relationship~~to ~~with~~our ~~PGA~~existing ~~Tour~~user base through internal channels such as mobile push notifications, ~~Inc~~email and ~~PGATOUR.COM~~text messages, ~~LLC.~~and Asexternal ~~part~~channels ofsuch ~~the~~as ~~relationship~~Facebook, ~~DraftKings’~~Twitter, Instagram ~~daily~~and ~~fantasy~~Snapchat. ~~golf~~Through ~~players~~those ~~will~~channels, ~~have~~we ~~the~~use ~~ability~~a tocombination ~~receive~~of ~~real-time~~content, ~~video~~contests ~~highlights~~and ~~for~~promotions ~~players~~to inengage ~~their~~existing ~~respective lineups~~users. ~~Other~~Additionally, ~~elements~~we ofincentivize ~~this~~our ~~relationship~~users ~~will~~to ~~create~~refer ~~expanded~~new ~~DFS~~users through our “Refer-~~specific~~a-Friend” ~~content~~program, ~~offerings~~offering ~~and~~incentives ~~brand~~such ~~integration~~as free entries into ~~both~~tournaments or free bets if the ~~PGA~~referred ~~TOUR~~user ~~and~~ultimately ~~DraftKings’~~interacts with our product offerings.

·Team Inand ~~August~~League ~~2020,~~Relationships we- ~~expanded~~We ~~our~~engage ~~partnership~~in relationships with ~~Major~~sports ~~League~~leagues ~~Baseball~~ to ~~remain~~improve ~~the~~our ~~official~~brand and ~~exclusive~~awareness, ~~daily~~acquire ~~fantasy~~users, ~~sports~~improve ~~partner~~user ofretention ~~the~~and ~~league.~~create ~~The~~differentiated ~~extension~~experiences ~~includes an expanded partnership providing~~ for anour ~~increase in DraftKings’ content rights, product integration and prizing within DraftKings’ DFS games~~users.

We•In ~~engage~~March 2021, we became the UFC's first official sportsbook and DFS partner in ~~similar~~the ~~multi-year relationships~~United ~~with~~States ~~professional~~and ~~sports~~Canada. ~~teams~~As part of this agreement, ~~which~~we ~~serve~~are able to ~~bolster~~offer ~~our~~in-game ~~brand~~promotions, ~~affiliation~~activations, ~~and~~in-broadcast ~~create~~odds ~~unique~~integrations ~~collaborative~~and ~~integrations for~~UFC branding across our ~~users~~DFS and Sportsbook offerings.

~~We also engage in relationship deals with media companies to create content and integrated marketing experiences.~~ •In ~~July 2015~~April 2021, we ~~entered~~extended ~~into~~our acurrent ~~multi-year~~ relationship with ~~Fox~~the ~~Networks~~NFL ~~Group, Inc.~~as ~~(“FOX”),~~the ~~which~~exclusive ~~provided~~official ~~DraftKings~~DFS ~~with~~partner ~~committed media~~ and ~~integrations across FOX’s national, local and digital properties. With this relationship, FOX~~ also ~~made~~became an ~~investment~~official inNFL ~~DraftKings. In September 2020, we entered into a multi-year agreement with ESPN to become a co-exclusive sportsbook link-out provider and exclusive daily fantasy~~ sports ~~link-out~~betting ~~provider across a selection of ESPN’s digital properties~~partner. Under the agreement, we will be able to advertise our product offerings across ESPN’s digital platforms and through integrations into ESPN programming. More recently, we have established major partnerships with media entities like Vox and Bleacher Report as we seek to grow our audience of U.S. sports fans.

~~B2B Business~~•In ~~Marketing~~July -2021, ~~Our~~in ~~core~~addition ~~B2B~~to ~~marketing~~extending ~~strategy~~our isoriginal ~~centered~~partnership ~~around~~with ~~attending and exhibiting at major trade shows around~~ the ~~world. SBTech’s trade show marketing is supplemented with digital and offline marketing campaigns in leading industry publications~~MLB, ~~websites,~~we ~~regular~~expanded ~~media~~our ~~pieces~~relationship ~~and~~to ~~participation~~also oninclude ~~industry~~promotional ~~panels.~~rights ~~SBTech’s reputation~~ and ~~customer testimonials~~content ~~also~~inclusive ~~assist~~of inthe ~~its~~sports ~~marketing~~betting ~~and business efforts~~category.

~~Distribution~~•In October 2021, we entered into a multi-year relationship with the NHL to become an Official Sports Betting, Daily Fantasy Sports and iGaming Partner of the league in the United States. To complement the deal, we also reached an agreement with Turner Sports, including Bleacher Report, to be the exclusive sportsbook and daily fantasy sports provider for their coverage of the NHL.

We•In ~~distribute~~November ~~our B2C product offerings through various channels~~2021, ~~including~~we ~~traditional~~expanded ~~websites,~~our ~~direct~~relationship ~~app~~with ~~downloads~~the ~~and~~NBA ~~global direct-~~to~~-consumer digital~~ ~~platforms~~make ~~such~~us asa ~~the~~co-official ~~Apple~~sports ~~App~~betting ~~Store~~partner ~~and~~of the ~~Google Play store~~NBA. ~~These~~This ~~two~~agreement ~~digital~~grants ~~platforms~~us ~~are~~expansive ~~the~~NBA ~~main~~rights ~~distribution channels for our product offerings. Our DFS product offering is delivered as a free application through both the Apple App Store~~ and ~~Google~~assets ~~Play~~to ~~Store~~integrate ~~and~~within isits ~~also~~sports ~~accessible~~betting, ~~via~~daily ~~mobile~~fantasy ~~and~~sports, ~~traditional websites. Our Sportsbook and~~ iGaming ~~product offerings are primarily distributed through the Apple App Store~~ and ~~a traditional website. We allow our Android Sportsbook and iGaming users~~ free-to-play ~~install our Sportsbook and iGaming product offerings through our website. We derive nearly all of our revenue through~~ products ~~distributed~~ ~~via the Apple App Store, Google Play Store~~ and ~~via~~promotional ~~traditional websites. For all of our~~ offerings~~, neither Apple nor Google take any revenue share for distributing our product~~.

~~For~~We ~~our~~engage ~~B2B~~in ~~segment, Sportsbook~~similar and iGaming products and services are distributed online via the Apple App Store, Google Play Store and traditional websites by operators that have licensed such products and services directly from SBTech, while retail products and services are distributed primarily via selfmulti-~~service~~year ~~betting~~relationships ~~terminals~~with ~~and~~professional ~~standalone~~sports ~~computer terminals. Similarly~~teams, ~~Apple~~which ~~and~~serve ~~Google~~to dobolster ~~not take any revenue share for distributing those products and services. We also license~~ our ~~B2B~~brand ~~products~~affiliation and ~~services~~create tounique ~~resellers (through~~collaborative aintegrations ~~fixed-fee model) who sublicense to operators, and in such cases, the reseller is responsible~~ for ~~the~~our ~~maintenance of the products and services~~users.

~~Intellectual~~In ~~Property~~September 2020, we entered into a multi-year agreement with ESPN to become a co-exclusive sportsbook link-out provider and exclusive daily fantasy sports link-out provider across a selection of ESPN’s digital properties. Under the agreement, we will be able to advertise our product offerings across ESPN’s digital platforms and through integrations into ESPN programming. More recently, we have established partnerships with media entities like iHeartMedia as we seek to grow our audience of U.S. sports fans.

~~Our~~B2B ~~business~~Business ~~substantially relies~~Marketing on- ~~the~~Our ~~creation,~~core ~~acquisition,~~B2B ~~use~~marketing ~~and~~strategy ~~protection of intellectual property. Some of this intellectual property~~ is incentered ~~the form~~around ofattending ~~software~~and ~~code,~~exhibiting ~~patented~~at ~~technology~~major ~~and~~ trade ~~secrets~~shows ~~that~~around wethe ~~use to develop and properly run our DFS, Sportsbook and iGaming offerings and related services~~world. WeSBTech’s ~~also~~trade ~~create~~show ~~intellectual~~marketing ~~property~~is ~~that~~supplemented ~~includes~~with ~~proprietary~~digital ~~daily fantasy sports, sports betting~~ and ~~iGaming-related~~offline ~~technology~~marketing ~~and~~campaigns ~~content~~in ~~as well as proprietary data acquired from the use of our daily fantasy sports, sports betting and iGaming product offerings.~~

8 7

~~While~~leading ~~most~~industry ofpublications, ~~the intellectual property we use is created by us~~websites, weregular ~~have~~media ~~obtained~~pieces ~~rights to use intellectual property of third parties through licenses~~ and ~~service~~participation ~~agreements~~on ~~with~~industry ~~those third parties~~panels. ~~Although~~SBTech’s wereputation ~~believe~~and ~~these~~customer ~~licenses~~testimonials ~~are~~also ~~sufficient~~assist ~~for~~in ~~the~~its ~~operation~~marketing ~~of the company, these licenses typically limit our use of the third parties’ intellectual property to specific uses~~ and ~~for~~business ~~specific time periods~~efforts.

We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with third parties. We also engage in monitoring the activities of third parties with respect to potential infringing uses of our intellectual property by third parties.Distribution

We ~~actively~~distribute ~~seek patent~~our ~~protection~~B2C ~~covering~~product ~~inventions~~offerings ~~originating~~through ~~from~~various uschannels, ~~and~~including traditional websites, ~~from~~direct ~~time~~app downloads and global direct-to-consumer ~~time,~~digital ~~review~~platforms ~~opportunities~~such toas ~~acquire~~the ~~patents~~Apple toApp Store and the ~~extent~~ weGoogle ~~believe~~Play ~~such~~store. ~~patents~~These ~~may~~two bedigital ~~useful~~platforms orare ~~relevant~~the main distribution channels for our product offerings. Our DFS product offering is delivered as a free application through both the Apple App Store and Google Play Store and is also accessible via mobile and traditional websites. Our Sportsbook and iGaming product offerings are primarily distributed through the Apple App Store and a traditional website. We allow our Android Sportsbook and iGaming users to install our ~~business~~Sportsbook and iGaming product offerings through Google Play Store and our website. We derive nearly all of our revenue through products distributed via the Apple App Store, Google Play Store and via traditional websites. For all of our offerings, neither Apple nor Google take any revenue share for distributing our product.

InFor ~~addition~~our toB2B ~~these contractual arrangements~~segment, weSportsbook ~~also~~and ~~rely~~iGaming onproducts aand ~~combination~~services ofare ~~trade~~distributed ~~secret,~~online ~~copyright,~~via ~~trademark,~~the ~~trade~~Apple ~~dress~~App Store, ~~domain~~Google ~~name~~Play Store and ~~patents to~~traditional ~~protect~~websites ~~our~~by ~~DFS,~~operators ~~Sportsbook~~that ~~and~~have ~~iGaming~~licensed ~~product~~such ~~offerings~~products and ~~other~~services ~~intellectual~~directly ~~property.~~from WeSBTech, ~~typically~~while ~~own~~retail ~~the~~products ~~copyright~~and ~~to the~~services ~~software~~are ~~code~~distributed toprimarily ~~our~~via ~~content,~~self-service asbetting ~~well~~terminals asand ~~trademarks~~standalone ~~under~~computer ~~which~~terminals. ~~our DFS~~Similarly, ~~Sportsbook~~Apple and ~~iGaming~~Google ~~product~~do ~~offerings~~not ~~and~~take ~~related services~~any ~~are~~revenue ~~marketed~~share for distributing those products and services. We ~~pursue~~also ~~the~~license ~~registration~~our ofB2B ~~our~~products ~~domain~~and ~~names,~~services ~~trademarks,~~to ~~and~~resellers ~~service~~(through ~~marks~~a infixed-fee ~~the~~model) ~~United~~who ~~States~~sublicense to operators, and in ~~locations~~ ~~outside~~such cases, the ~~United~~reseller ~~States.~~is ~~Our~~responsible ~~registered~~for ~~trademarks~~the inmaintenance of the ~~United~~products ~~States~~and ~~include~~services. ~~“DraftKings~~As of December 31,” ~~and~~2021, ~~the~~we ~~names of~~no ~~our~~longer ~~services~~had ~~and~~agreements ~~applications,~~with ~~among~~any ~~others~~resellers.

~~Competition~~Intellectual Property

WeOur ~~operate~~business insubstantially relies on the ~~global~~creation, ~~entertainment~~acquisition, use and ~~gaming~~protection ~~industries with~~of ~~our~~intellectual ~~business-to-consumer~~property. ~~offerings~~Some ~~such~~of asthis ~~DFS,~~intellectual ~~Sportsbook~~property ~~and~~is ~~iGaming,~~in ~~and~~the ~~our~~form ~~business-to-business~~of ~~offerings.~~software ~~Our~~code, ~~users face~~patented atechnology ~~vast~~and ~~array~~trade ofsecrets ~~entertainment~~that ~~choices.~~we ~~Other~~use ~~forms~~to ofdevelop ~~entertainment,~~and ~~such~~properly asrun ~~television,~~our ~~movies~~DFS, ~~sporting~~Sportsbook ~~events~~ and ~~in-person casinos,~~iGaming ~~are~~offerings ~~more~~and ~~well~~related ~~established~~services. ~~and~~We ~~may~~also becreate ~~perceived~~intellectual byproperty ~~our~~that ~~users~~includes toproprietary ~~offer~~daily ~~greater~~fantasy ~~variety~~sports, ~~affordability,~~sports ~~interactivity~~betting and ~~enjoyment.~~ WeiGaming-related ~~compete~~technology ~~with~~and ~~these~~content ~~other~~as ~~forms~~well ofas ~~entertainment~~proprietary ~~for~~data ~~the~~acquired ~~discretionary~~from ~~time~~the ~~and~~use ~~income~~ of our ~~users~~daily fantasy sports, sports betting and iGaming product offerings.

~~The~~While ~~specific~~most ~~industries in~~of ~~which~~the intellectual property we ~~operate~~use ~~are~~is ~~characterized~~created by ~~dynamic customer demand and technological advances~~us, ~~and~~we ~~there~~have isobtained ~~intense~~rights ~~competition among~~to ~~online~~use ~~gaming~~intellectual ~~and~~property ~~entertainment providers. A number~~ of ~~established,~~third ~~well-financed~~parties ~~companies~~through ~~producing~~licenses ~~online gaming~~ and~~/or interactive~~ ~~entertainment~~service ~~products~~agreements ~~and services compete~~ with ~~our~~those ~~offerings,~~third ~~and other well-capitalized companies may introduce competitive services~~parties. ~~There~~Although ~~has~~we ~~also~~believe ~~been~~these ~~considerable~~licenses ~~consolidation~~are ~~among~~sufficient ~~competitors~~for in the ~~entertainment~~operation ~~and~~of ~~gaming~~the ~~industries and~~company, ~~such~~these ~~consolidation~~licenses ~~and~~typically ~~future~~limit ~~consolidation~~our ~~could~~use ~~result~~of in the ~~formation~~third ofparties’ ~~larger~~intellectual ~~competitors~~property ~~with increased financial resources and altered cost structures, which may enable them~~ to ~~offer~~specific ~~more~~uses ~~competitive products, gain a larger market share, expand offerings~~ and ~~broaden~~for ~~their~~specific ~~geographic~~time ~~scope of operations~~periods.

~~Human~~We ~~Capital~~protect ~~Resources~~our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with third parties. We also engage in monitoring the activities of third parties with respect to potential infringing uses of our intellectual property by third parties.

AsWe aactively ~~multinational technology~~seek ~~company~~patent ~~with~~protection ~~over~~covering ~~2,600~~inventions ~~employees~~originating ~~located~~from inus ~~eight countries~~and, ~~our~~from ~~business~~time ~~success~~to ~~is driven by our highly skilled workforce. With our global technology and product team~~time, ~~consisting~~review ofopportunities ~~over~~to ~~1,350~~acquire ~~employees~~patents ~~(which~~to ~~includes~~the ~~over~~extent ~~1,100 engineers),~~ we ~~are~~believe ~~well~~such ~~positioned~~patents tomay ~~deliver~~be ~~new,~~useful ~~innovative~~or ~~and~~relevant ~~exciting products~~ to our ~~growing base of customers~~business.

AtIn ~~DraftKings~~addition to these contractual arrangements, we ~~recognize~~ ~~that~~also ~~engaging~~rely ~~and~~on ~~developing~~a ~~our~~combination ~~employees~~of istrade asecret, ~~key~~copyright, trademark, trade dress, domain name and patents to protect our ~~success~~DFS, Sportsbook and weiGaming ~~rely~~product onofferings ~~attracting~~ and ~~retaining~~other ~~our~~intellectual ~~talent to~~property. ~~deliver~~We ontypically ~~DraftKings’~~own ~~goal~~the copyright to bethe asoftware ~~leader~~code into ~~today’s~~our ~~fast-growing~~content, ~~global~~as ~~entertainment~~well ~~and~~as ~~gaming~~trademarks ~~industries. We~~under ~~routinely~~which ~~gauge~~ our ~~employees’~~DFS, ~~level~~Sportsbook ofand ~~engagement~~iGaming ~~and~~product ~~satisfaction~~offerings ~~through~~and ~~quarterly~~related ~~pulse~~services ~~surveys~~are marketed. ~~These~~We ~~surveys~~pursue ~~ensure we~~the ~~hear~~registration ~~directly~~of ~~from~~ our ~~valuable~~domain ~~employees~~names, ontrademarks, ~~how~~and weservice ~~can~~marks ~~better~~in ~~focus~~the onUnited States and in locations outside the ~~following~~United ~~areas:~~States. ~~(i) DraftKings’~~Our ~~mission/vision, (ii) role~~registered ~~clarity~~trademarks ~~and~~in ~~engagement,~~the ~~(iii) employee~~United ~~development~~States ~~and~~include ~~(iv) inclusion~~“DraftKings,” ~~equity~~and the names of our services and ~~belonging~~applications, among others.

We have committed to and formalized employee development programs that support inclusion, equity and belonging, and promote creativity and innovation through various leadership and talent management programs. DraftKings’ talent training programs are designed to provide increased career and internal mobility for our employees, identify development opportunities, and proactively support succession planning.Competition

9 We operate in the global entertainment and gaming industries with our business-to-consumer offerings such as DFS, Sportsbook and iGaming, and our business-to-business offerings. Our users face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, sporting events and in-person casinos, are more well established and may be perceived by our users to offer greater variety, affordability, interactivity and enjoyment. We compete with these other forms of entertainment for the discretionary time and income of our users.

We also offer our employees a holistic total rewards package with premier health and welfare programs for employees and family members. In addition, every employee is eligible for equity awards to share in the Company’s financial success. Our unlimited paid time off programs enable our workforce to enjoy personal time away from their job responsibilities.8

InThe ~~early~~specific ~~March 2020, we~~industries ~~took~~in ~~swift~~which ~~action~~we tooperate ~~protect~~are ~~our~~characterized ~~employees’~~by ~~health~~dynamic incustomer ~~response~~demand toand ~~the~~technological ~~COVID-19 pandemic~~advances, ~~including~~and ~~closing~~there ~~our~~is ~~offices. We~~intense ~~have~~competition ~~encouraged~~among ~~most~~online ofgaming ~~our~~and ~~employees~~entertainment toproviders. ~~work~~A ~~from~~number ~~home~~of ~~through at least July 2021~~established, ~~when~~well-financed wecompanies ~~plan~~producing toonline ~~reassess~~gaming ~~the global health situation~~ and/or ~~make~~interactive ~~decisions~~entertainment ~~about~~products ~~the~~and ~~timing~~services ofcompete ~~reopening~~with our ~~offices~~offerings, ~~with~~and ~~the~~other ~~safety~~well-capitalized ofcompanies ~~our~~may ~~employees~~introduce ~~being~~competitive ~~the highest priority~~services. InThere ~~the~~has ~~meantime,~~also webeen ~~have~~considerable ~~implemented~~consolidation ~~health~~among ~~and~~competitors ~~safety protocols~~ in ~~our offices to ensure that we are ready for~~ the ~~safe~~ ~~return~~entertainment ofand ~~our~~gaming ~~employees~~industries toand ~~our~~such ~~offices~~consolidation ~~when~~and ~~the~~future ~~time~~consolidation ~~comes. In~~could ~~order~~result toin ~~ensure~~ the ~~success~~formation of ~~our~~larger ~~employees~~competitors ~~during~~with ~~the shift~~increased tofinancial ~~remote~~resources ~~work,~~and wealtered ~~developed~~cost ~~training~~structures, ~~resources~~which ~~for~~may ~~managers~~enable them to ~~ensure~~offer ~~they~~more ~~had~~competitive ~~the~~products, ~~proper~~gain ~~skills~~a tolarger ~~lead~~market ~~remote~~share, ~~teams~~expand offerings and ~~delivered~~ ~~trainings~~broaden totheir ~~employees~~geographic onscope ~~how~~of ~~to be effective while working remotely~~operations.

~~Government~~Human ~~Regulation~~Capital Resources

~~DraftKings~~As isa ~~subject to~~multinational ~~various~~technology ~~U.S.~~company ~~and~~with ~~foreign~~over ~~laws~~3,400 ~~and~~employees ~~regulations~~located ~~that~~in ~~affect~~six countries, our ~~ability~~business tosuccess ~~operate~~is ~~our~~driven ~~DFS,~~by ~~Sportsbook~~our ~~and~~highly ~~iGaming~~skilled ~~product offerings~~workforce. ~~These~~ ~~product~~With ~~offerings~~our ~~are~~global ~~generally~~technology ~~subject~~and toproduct ~~extensive~~team, ~~and~~consisting ~~evolving~~of ~~regulations~~over ~~that~~1,350 ~~could~~employees ~~change~~(which ~~based~~includes onover ~~political~~1,100 ~~and~~engineers), ~~social norms~~we ~~and~~are ~~that~~well ~~could~~positioned beto ~~interpreted~~deliver innew, ~~ways~~innovative ~~that~~and ~~could~~exciting ~~negatively~~products ~~impact~~to our ~~business~~growing base of customers.

~~The~~At ~~gaming~~DraftKings, ~~industry (inclusive~~we ofrecognize ~~our~~that ~~iGaming~~engaging and ~~Sportsbook~~developing ~~product~~our ~~offerings)~~employees is ~~highly~~a ~~regulated~~key to our success and we ~~must~~rely ~~maintain~~on ~~licenses~~attracting and ~~pay~~retaining ~~gaming~~our ~~taxes or~~talent ato ~~percentage~~deliver ofon ~~revenue~~DraftKings’ ~~where~~goal ~~required~~to bybe ~~the~~a ~~jurisdictions~~leader in ~~which~~today’s wefast-growing ~~operate~~global inentertainment ~~order~~and togaming ~~continue our operations~~industries. ~~Our~~We ~~business is~~routinely ~~subject~~measure toour ~~extensive~~employees’ ~~regulation~~level ~~under~~of ~~the~~engagement ~~laws, rules~~ and ~~regulations~~satisfaction ofthrough ~~the~~a ~~jurisdictions~~comprehensive inannual ~~which~~engagement wesurvey ~~operate.~~followed ~~These~~by ~~laws, rules and~~quarterly ~~regulations~~pulse ~~generally~~surveys. ~~concern~~These ~~the~~surveys ~~responsibility,~~ensure ~~financial~~we ~~stability,~~hear ~~integrity~~directly ~~and~~from ~~character~~our ofvaluable ~~the~~employees ~~owners,~~on ~~managers and~~how ~~persons~~we ~~with~~can ~~material~~better ~~financial~~focus ~~interests~~on in the ~~gaming~~following ~~operations~~areas: ~~along~~(i) alignment with ~~the~~DraftKings’ ~~integrity~~mission/vision and ~~security~~in-role ofclarity, ~~the~~(ii) ~~iGaming~~manager ~~and Sportsbook~~effectiveness, ~~product~~(iii) ~~offerings.~~growth ~~Violations~~opportunities, of(iv) ~~laws~~inclusion, orequity ~~regulations~~and inbelonging, ~~one~~(v) ~~jurisdiction~~work-life ~~could~~balance, ~~result~~(vi) inrewards ~~disciplinary~~and ~~action~~recognition, in(vii) ~~that~~ enablement and ~~other~~(viii) ~~jurisdictions~~overall satisfaction.

~~Gaming~~We ~~laws~~have ~~are~~committed ~~generally based~~to ~~upon~~and ~~declarations~~formalized ofemployee ~~public~~development ~~policy~~programs ~~designed~~that tosupport ~~protect~~inclusion, ~~gaming~~equity ~~consumers~~ and ~~the~~belonging, ~~viability~~ and ~~integrity~~promote ofcreativity ~~the~~and ~~gaming~~innovation ~~industry. Gaming~~through ~~laws~~various ~~also~~leadership ~~may be designed to protect~~ and ~~maximize~~talent ~~state~~management ~~and~~programs. ~~local~~DraftKings’ ~~tax~~talent ~~revenues,~~training asprograms ~~well~~are asdesigned to ~~enhance~~provide ~~economic~~increased ~~development~~ career and ~~tourism.~~internal Tomobility ~~accomplish~~for ~~these~~our ~~public policy goals~~employees, ~~gaming~~identify ~~laws~~development ~~establish~~opportunities, ~~stringent~~and ~~procedures~~proactively tosupport ~~ensure~~succession ~~that participants in the gaming industry meet certain standards of character and responsibility~~planning.

~~Licensing~~We also offer our employees a holistic total rewards package with premier health and ~~Suitability~~welfare ~~Determinations~~programs for employees and family members. In addition, every full-time employee receives an equity award upon hire and is also eligible for equity awards on an ongoing basis to align with shareholders and share in the Company’s financial success. Our unstructured paid time off programs enable our workforce to enjoy personal time away from their job responsibilities.

InWe ~~order~~continue to ~~operate~~take action to protect our employees’ health in ~~certain jurisdictions,~~response to the ongoing COVID-19 pandemic. We have encouraged most of our employees to continue to work from home until we ~~must~~put ~~obtain~~in ~~either~~place aour ~~temporary~~plans orto ~~permanent~~more ~~license~~broadly orreopen ~~determination~~our offices. We continue to monitor and assess the global health situation and make decisions about the timing of ~~suitability~~reopening ~~from~~our offices with the ~~responsible~~safety ~~authorities~~of our employees being the highest priority. We ~~seek~~In the meantime, we continue to have health and safety protocols in our offices to ensure that we ~~obtain~~are ~~all~~ready ~~necessary~~for ~~licenses~~the safe return of our employees to ~~develop~~our ~~and~~offices ~~put~~when ~~forth~~the time comes. In order to ensure the continued success of our ~~offerings~~employees induring the ~~jurisdictions~~shift into ~~which~~remote work, we ~~operate~~ developed training resources for managers to ensure they had the proper skills to lead remote teams and ~~where~~delivered training to employees on how to be effective while working remotely. This includes shifts in our ~~users~~learning ~~are~~and ~~located~~development offerings to full virtual format to minimize disruptions to employee learning.

~~Gaming~~Government laws in certain jurisdictions require us, and each of our subsidiaries engaged in gaming operations, certain of our directors, officers and employees, and in some cases, certain of our shareholders, to obtain licenses from gaming authorities. Such licenses typically require a determination that the applicant qualifies or is suitable to hold the license. When determining whether to grant such a license to an applicant, gaming authorities generally consider: (i) the financial stability, integrity and responsibility of the applicant (including verification of the applicant’s sources of funding); (ii) the quality and security of the applicant’s online real-money gaming platform, hardware and related software (including the platform’s ability to operate in compliance with local regulation, as applicable); (iii) the applicant’s history; (iv) the applicant’s ability to operate its gaming business in a socially responsible manner; and (v) in certain circumstances, the effect on competition.Regulation

~~Gaming~~DraftKings ~~authorities~~is ~~may,~~ subject to ~~certain~~various ~~administrative~~U.S. ~~procedural~~and ~~requirements,~~foreign ~~(i) deny~~laws anand ~~application,~~regulations orthat ~~limit,~~affect ~~condition,~~our ~~revoke~~ability orto ~~suspend~~operate ~~any~~our ~~license issued~~DFS, bySportsbook ~~them;~~and ~~(ii) impose~~iGaming ~~fines,~~product ~~either~~offerings. onThese aproduct ~~mandatory~~offerings ~~basis~~are orgenerally assubject ato ~~consensual~~extensive ~~settlement~~and ofevolving ~~regulatory~~regulations ~~action; (iii) demand~~ that ~~named~~could ~~individuals~~change orbased ~~shareholders~~on bepolitical ~~disassociated~~and ~~from~~social anorms ~~gaming business;~~ and ~~(iv) in~~that ~~serious cases,~~could ~~liaise~~be ~~with~~interpreted ~~local~~in ~~prosecutors~~ways tothat ~~pursue~~could ~~legal~~negatively ~~action,~~impact ~~which~~our ~~may result in civil or criminal penalties~~business.

10The gaming industry (inclusive of our iGaming and Sportsbook product offerings) is highly regulated and we must maintain licenses and pay gaming taxes or a percentage of revenue where required by the jurisdictions in which we operate in order to continue our operations. Our business is subject to extensive regulation under the laws, rules and regulations of the jurisdictions in which we operate. These laws, rules and regulations generally concern the responsibility, financial stability, integrity and character of the owners, managers and persons with material financial interests in the gaming operations along with the integrity and security of the iGaming and Sportsbook product offerings. Violations of laws or regulations in one jurisdiction could result in disciplinary action in that and other jurisdictions.

Events that may trigger revocation of such a gaming license or another form of sanction vary by jurisdiction. However, typical events include, among others: (i) conviction in any jurisdiction of certain persons with an interest in, or key personnel of, the licensee of an offense that is punishable by imprisonment or may otherwise cast doubt on such person’s integrity; (ii) failure without reasonable cause to comply with any material term or condition of the gaming license; (iii) declaration of, or otherwise engaging in, certain bankruptcy, insolvency, winding-up or discontinuance activities, or an order or application with respect to the same; (iv) obtaining the gaming license by a materially false or misleading representation or in some other improper way; (v) violation of applicable anti-money laundering or terrorist financing laws or regulations; (vi) failure to meet commitments to users; (vii) failure to pay in a timely manner all gaming or betting taxes or fees due; or (viii) determination by the gaming authority that there is another material and sufficient reason to revoke or impose another form of sanction upon the licensee.9

~~Product-Specific~~Gaming ~~Licensing~~laws are generally based upon declarations of public policy designed to protect gaming consumers and the viability and integrity of the gaming industry. Gaming laws also may be designed to protect and maximize state and local tax revenues, as well as to enhance economic development and tourism. To accomplish these public policy goals, gaming laws establish stringent procedures to ensure that participants in the gaming industry meet certain standards of character and responsibility.

~~Daily~~Licensing ~~Fantasy~~and ~~Sports~~Suitability Determinations

~~DraftKings’~~In ~~DFS~~order isto ~~available~~operate in 43certain ~~U.S. states~~jurisdictions, ~~the~~we ~~District of~~must ~~Columbia,~~obtain ~~and~~either ~~eight~~a ~~international~~temporary ~~jurisdictions.~~or Inpermanent ~~those states that currently require a~~ license or ~~registration~~determination ~~for~~of ~~DFS~~suitability ~~operations, DraftKings has either obtained~~ from the ~~relevant~~responsible ~~regulatory~~authorities. ~~authority,~~We ~~the~~seek ~~appropriate license or registration, has obtained a provisional license, or is operating pursuant~~ to aensure ~~grandfathering clause~~ that ~~allows~~we ~~operation~~obtain ~~pending~~all ~~the~~necessary ~~availability of licensing applications and subsequent grant of a license. DraftKings also has three foreign DFS~~ licenses ~~and~~to ~~operates~~develop ~~under those licenses in eight countries. Various state laws~~ and ~~regulations~~put ~~govern~~forth our ~~licenses,~~offerings ~~but~~in ~~generally such state laws and regulations define paid fantasy sports, establish~~ the ~~rules concerning~~jurisdictions ~~the application and licensure procedures for gaming operators~~ in ~~the~~which ~~fantasy sports~~we ~~business~~operate and ~~regulate~~where ~~practices for paid fantasy sports deemed to be detrimental to the public interest. As part of the licensing process, we must submit, in some jurisdictions, extensive materials on~~ our ~~operations, including our technology and data security, age verification of~~ users, ~~segregation~~are ~~of account funds and responsible gaming initiatives~~located.

InGaming ~~the~~laws ~~United~~in ~~States~~certain jurisdictions require us, and each of our ~~DFS~~subsidiaries ~~licenses~~engaged ~~are~~in ~~generally~~gaming ~~granted for~~operations, acertain ~~predetermined~~of ~~period~~our directors, officers and employees, and in some cases, certain of ~~time~~our ~~(typically~~shareholders, ~~ranging~~to obtain licenses from ~~one~~gaming toauthorities. ~~four~~Such ~~years)~~licenses ortypically require ~~documents~~a determination that the applicant qualifies or is suitable to behold ~~supplied~~the onlicense. When determining whether to grant such a ~~regular basis~~license to an applicant, gaming authorities generally consider: (i) the financial stability, integrity and responsibility of the applicant (including verification of the applicant’s sources of funding); (ii) the quality and security of the applicant’s online real-money gaming platform, hardware and related software (including the platform’s ability to operate in ~~order~~compliance with local regulation, as applicable); (iii) the applicant’s history; (iv) the applicant’s ability to ~~maintain~~operate ~~our~~its ~~licenses.~~gaming Webusiness ~~also~~in ~~maintain~~a ~~DFS~~socially ~~licenses~~responsible manner; and (v) in ~~Great~~certain ~~Britain~~circumstances, ~~Malta~~the ~~and~~effect ~~Australia~~on competition.

InGaming ~~Great~~authorities ~~Britain~~may, ~~online gaming and sports betting is~~ subject to ~~the~~certain ~~Gambling~~administrative ~~Act~~procedural ~~2005~~requirements, (~~the “GA2005”~~i), deny asan ~~amended~~application, byor ~~the Gambling (Licensing and Advertising) Act 2014~~limit, ~~and the regulations promulgated thereunder. Under the GA2005~~condition, ~~entities~~revoke ~~wishing~~or tosuspend ~~offer~~any ~~online~~license ~~sports~~issued ~~betting~~by ~~(which for~~them; ~~purposes of GA2005 is defined to include DFS~~(ii) impose ~~and/or~~fines, ~~online~~either ~~casino~~on ~~services to persons located in Great Britain must first obtain~~ a ~~remote~~mandatory ~~gambling~~basis ~~operating~~or ~~license~~as ~~from the Gambling Commission. We hold~~ a ~~remote-pool-betting~~consensual ~~operating~~settlement ~~license~~of ~~authorizing us~~regulatory toaction; ~~offer~~(iii) demand ~~our~~that ~~DFS~~named ~~product~~individuals toor ~~residents~~shareholders ~~of Great Britain. That license may~~ be ~~varied~~disassociated tofrom ~~add~~a ~~further~~gaming ~~product~~business; ~~categories permitting, for example, fixed-odds-sports betting~~ and ~~online~~(iv) in ~~casinos.~~serious Wecases, ~~also~~liaise ~~hold~~with alocal ~~gambling~~prosecutors ~~software~~to ~~operating~~pursue ~~license~~legal ~~issued by the Gambling Commission~~action, which ~~authorizes~~may usresult toin ~~develop~~civil ~~the~~or ~~DFS~~criminal ~~software we use~~penalties. ~~Our British licenses are not limited by a term, subject to the payment of annual fees and compliance with license conditions.~~

InEvents ~~Malta,~~that ~~online~~may ~~gaming~~trigger ~~and sports~~revocation ~~betting~~of issuch ~~subject~~a togaming ~~the~~license ~~Gaming~~or ~~Act~~another ~~2018~~form ~~and~~of ~~the~~sanction ~~regulations~~vary ~~promulgated~~by ~~thereunder~~jurisdiction. ~~Fantasy~~However, ~~sports~~typical ~~(including~~events ~~DFS~~include, among others: (i) conviction ~~are considered~~in aany ~~controlled~~jurisdiction ~~skill~~of ~~game~~certain ~~for~~persons ~~the~~with ~~purposes~~an interest in, or key personnel of, the ~~Gaming~~licensee ~~Authorizations~~of ~~Regulations.~~an ~~Our~~offense ~~subsidiary,~~that ~~Crown~~is ~~DFS~~punishable ~~Malta Limited,~~by ~~holds~~imprisonment aor ~~gaming~~may ~~services~~otherwise cast doubt on such person’s integrity; (ii) failure without reasonable cause to comply with any material term or condition of the gaming license; (iii) declaration of, ~~issued~~or byotherwise ~~the~~engaging ~~Malta~~in, ~~Gaming~~certain ~~Authority~~bankruptcy, ~~which~~insolvency, ~~authorizes~~winding-up ~~the~~or ~~holder~~discontinuance activities, or an order or application with respect to ~~conduct~~the ~~controlled skill~~same; ~~games.~~(iv) obtaining ~~Our~~the ~~Malta~~gaming license ~~was~~by ~~originally~~a ~~issued~~materially false or misleading representation or in ~~2017.~~some ~~Under~~other ~~the~~improper ~~Gaming~~way; ~~Act~~(v) violation ~~2018,~~of itapplicable ~~has~~anti-money laundering or terrorist financing laws or regulations; (vi) failure to meet commitments to users; (vii) failure to pay in a ~~duration~~timely manner all gaming or betting taxes or fees due; or (viii) determination by the gaming authority that there is another material and sufficient reason to revoke or impose another form of 10sanction ~~years~~upon the licensee.

~~Malta~~Product-Specific is a Member State of the European Union, and that has made it an increasingly popular hub for online betting and gaming businesses. We rely upon our Malta license to conduct DFS operations not only in Malta, but also in certain other EU Member States, including Germany, Austria, the Republic of Ireland and the Netherlands.Licensing

InDaily ~~Australia,~~Fantasy online gaming and sports betting is regulated at both the federal and state/territory levels. A sports betting operator that holds a license in one state or territory may offer services across all other states (subject to certain specific statutory restrictions that may apply). Our subsidiary, DraftKings Australia Pty Ltd, is the holder of a sports bookmaking license issued by the Northern Territory Racing Commission, which enables DraftKings Australia Pty Ltd to conduct DFS contests. The Northern Territory license was issued in November 2017 for a duration of five years, subject to the payment of annual fees and compliance with license conditions.Sports

11DraftKings’ DFS is available in 44 U.S. states, the District of Columbia, and six international jurisdictions. In those states that currently require a license or registration for DFS operations, DraftKings has either obtained from the relevant regulatory authority, the appropriate license or registration, has obtained a provisional license, or is operating pursuant to a grandfathering clause that allows operation pending the availability of licensing applications and subsequent grant of a license. DraftKings also has three foreign DFS licenses and operates under those licenses in six countries. Various state laws and regulations govern our licenses, but generally such state laws and regulations define paid fantasy sports, establish the rules concerning the application and licensure procedures for gaming operators in the fantasy sports business and regulate practices for paid fantasy sports deemed to be detrimental to the public interest. As part of the licensing process, we must submit, in some jurisdictions, extensive materials on our operations, including our technology and data security, age verification of users, segregation of account funds and responsible gaming initiatives.

~~Sportsbook~~In the United States, our DFS licenses are generally granted for a predetermined period of time (typically ranging from one to four years) or require documents to be supplied on a regular basis in order to maintain our licenses. We also maintain DFS licenses in Great Britain, Malta and Australia.

As of December 31, 2020, 22 U.S. states and the District of Columbia have legalized some form of sports betting. Of those 23 legal jurisdictions, fifteen have legalized online sports betting. Of those fifteen jurisdictions, thirteen are live, and DraftKings operates in ten of them. As of December 31, 2020, we operate our online sports betting product via the DraftKings Sportsbook app in Colorado, Illinois, Indiana, Iowa, New Hampshire, New Jersey, Pennsylvania, Tennessee and West Virginia pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Colorado Limited Gaming Control Commission, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the Pennsylvania Gaming Control Board, the Tennessee Education Lottery Corporation and the West Virginia Lottery. We also operate retail sportsbooks in Colorado, Illinois, Iowa, Mississippi, New Hampshire, New Jersey and New York pursuant to state licensing regimes. Subsequent to December 31, 2020, we also operate our online sports betting product in Virginia pursuant to a license granted by the Virginia Lottery and in Michigan pursuant to a license granted by the Michigan Gaming Control Board.10

OnIn ~~May 14,~~Great ~~2018~~Britain, ~~the~~online ~~U.S. Supreme~~gaming ~~Court~~and ~~issued~~sports anbetting ~~opinion~~is ~~determining~~subject ~~that~~to ~~PASPA~~the ~~was~~Gambling ~~unconstitutional.~~Act ~~PASPA~~2005 ~~prohibited~~(the ~~certain states from~~ “~~authorizing by law~~GA2005” ~~any form of sports betting. In striking down PASPA~~), ~~the~~as ~~Supreme~~amended ~~Court~~by ~~opened~~ the ~~potential~~Gambling ~~for~~(Licensing ~~state-by-state authorization of sports betting. Several states~~ and ~~territories,~~Advertising) ~~including~~Act ~~Arkansas~~2014, ~~Colorado,~~and ~~Delaware, Illinois, Indiana, Iowa, Michigan,~~the ~~Mississippi,~~regulations ~~Montana,~~promulgated ~~Nevada,~~thereunder. ~~New~~Under ~~Hampshire,~~the ~~New Jersey~~GA2005, ~~New~~entities ~~York,~~wishing ~~North~~to ~~Carolina,~~offer ~~Oregon,~~online ~~Pennsylvania,~~sports ~~Puerto~~betting ~~Rico, Rhode~~(which ~~Island,~~for ~~Tennessee,~~purposes ~~Virginia,~~of ~~Washington,~~GA2005 ~~Washington,~~is ~~D.C.~~defined ~~and~~to ~~West~~include ~~Virginia~~DFS) ~~already have laws authorizing~~ and/or ~~regulating some form of sports betting~~ online orcasino inservices ~~brick-and-mortar~~to ~~establishments.~~persons ~~Sports~~located ~~betting~~ in ~~the~~Great ~~United~~Britain ~~States~~must isfirst ~~subject~~obtain toa ~~additional laws,~~remote ~~rules and~~gambling ~~regulations~~operating atlicense from the ~~state~~Gambling ~~level~~Commission. ~~See~~We ~~“Risk~~hold ~~Factors~~a remote- ~~Risk Factors Relating to our Business and Industry~~ pool-betting ~~Our~~operating ~~business~~license isauthorizing ~~subject~~us to aoffer ~~variety~~our ofDFS ~~U.S.~~product ~~and~~to ~~foreign~~residents ~~laws, many~~ of ~~which~~Great ~~are~~Britain. ~~unsettled~~That ~~and~~license ~~still~~may ~~developing~~be ~~and~~varied ~~which could subject us~~ to ~~claims~~add orfurther ~~otherwise~~product ~~harm~~categories ~~our~~permitting, ~~business.~~for ~~Any change in existing regulations or their interpretation~~example, orfixed-odds-sports ~~the regulatory~~betting ~~climate applicable to our products~~ and ~~services,~~online orcasinos. ~~changes~~We inalso ~~tax~~hold ~~rules and~~a ~~regulations~~gambling orsoftware ~~interpretation~~operating ~~thereof related~~license toissued ~~our~~by ~~products~~the ~~and~~Gambling ~~services~~Commission, ~~could~~which ~~adversely~~authorizes ~~impact~~us ~~our ability~~ to ~~operate~~develop ~~our~~the ~~business~~DFS assoftware ~~currently conducted or as~~ we ~~seek~~use. toOur ~~operate~~British inlicenses ~~the~~are ~~future,~~not ~~which~~limited ~~could~~by ~~have~~ a ~~material~~term, ~~adverse~~subject ~~effect~~to onthe ~~our~~payment ~~financial~~of ~~condition~~annual fees and ~~results~~compliance ofwith ~~operations~~license conditions.”

~~iGaming~~In Malta, online gaming and sports betting is subject to the Gaming Act 2018 and the regulations promulgated thereunder. Fantasy sports (including DFS) are considered a controlled skill game for the purposes of the Gaming Authorizations Regulations. Our subsidiary, Crown DFS Malta Limited, holds a gaming services license, issued by the Malta Gaming Authority, which authorizes the holder to conduct controlled skill games. Our Malta license was originally issued in 2017. Under the Gaming Act 2018, it has a duration of 10 years.

AsMalta ofis ~~December 31, 2020, we operate our iGaming product in New Jersey, pursuant to~~ a ~~transactional~~Member ~~waiver~~State ~~granted~~of by the ~~New~~European ~~Jersey Division of Gaming Enforcement~~Union, inand ~~Pennsylvania,~~that ~~pursuant to~~has amade ~~license~~it ~~granted~~an byincreasingly ~~the~~popular ~~Pennsylvania~~hub ~~Gaming~~for ~~Control~~online ~~Board,~~betting and ingaming ~~West~~businesses. ~~Virginia,~~We ~~pursuant~~rely toupon anour ~~interim~~Malta license ~~granted~~to ~~by the~~conduct ~~West~~DFS ~~Virginia~~operations ~~Lottery.~~not ~~Subsequent~~only toin ~~December 31~~Malta, ~~2020,~~but we also ~~operate our iGaming technology~~ in ~~Michigan~~certain ~~pursuant~~other ~~to a~~EU ~~provisional~~Member ~~supplier~~States, ~~license~~including ~~granted~~Germany, byAustria, the ~~Michigan~~Republic ~~Gaming~~of ~~Control~~Ireland ~~Board~~and the Netherlands.

~~Generally~~In Australia, online ~~gambling in~~gaming ~~the~~and ~~United~~sports ~~States~~betting is ~~only~~regulated ~~lawful~~at ~~when~~both ~~specifically~~the ~~permitted~~federal ~~under~~and ~~applicable~~ state/territory ~~law~~levels. AtA ~~the~~sports ~~federal~~betting ~~level,~~operator ~~several~~that ~~laws provide~~holds ~~federal~~a ~~law~~license ~~enforcement~~in ~~with~~one ~~the~~state ~~authority~~or toterritory ~~enforce~~may ~~and~~offer ~~prosecute~~services ~~gambling~~across ~~operations~~all ~~conducted~~other instates ~~violation~~(subject ofto ~~underlying state~~certain ~~gambling~~specific ~~laws.~~statutory ~~These~~restrictions ~~enforcement~~that ~~laws~~may ~~include~~apply). ~~the~~Our ~~Unlawful~~subsidiary, ~~Internet~~DraftKings ~~Gambling~~Australia ~~Enforcement~~Pty ~~Act~~Ltd, ~~(the~~is ~~“UIGEA”),~~ the ~~Illegal~~holder ~~Gambling~~of ~~Business~~a ~~Act~~sports ~~and~~bookmaking ~~the~~license ~~Travel~~issued ~~Act.~~by Nothe ~~violation~~Northern ofTerritory ~~the~~Racing ~~UIGEA~~Commission, ~~the~~which ~~Illegal~~enables ~~Gambling~~DraftKings ~~Business~~Australia ~~Act~~Pty orLtd ~~the~~to ~~Travel Act~~conduct ~~can~~DFS becontests. ~~found~~The ~~absent~~Northern Territory license was issued in November 2017 for a ~~violation~~duration of anfive ~~underlying~~years, ~~state~~subject ~~law~~to orthe ~~other~~payment ~~federal~~of ~~law~~annual fees and compliance with license conditions.

In addition, the Wire Act of 1961 (the “Wire Act”) provides that anyone engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, will be fined or imprisoned, or both. However, the Wire Act notes that it shall not be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country in which such betting is legal. There is ongoing legal action as to whether the Wire Act applies beyond sports betting. A federal court of first instance has ruled that it does not; the decision was appealed but rejected on January 20, 2021 by the U.S. Court of Appeals for the First Circuit.Sportsbook

12 As of December 31, 2021, 29 U.S. states, the District of Columbia and Puerto Rico have legalized some form of sports betting. Of those 31 legal jurisdictions, 23 have legalized online sports betting. Of those 23 jurisdictions, eighteen are live, and DraftKings operates in fifteen of them. As of December 31, 2021, we operate our online sports betting product via the DraftKings Sportsbook app in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Michigan, New Hampshire, New Jersey, Oregon (B2B), Pennsylvania, Tennessee, Virginia, West Virginia and Wyoming pursuant to our licenses, temporary licenses, or executed vendor agreements granted by the gaming or lottery commission of such states, specifically, the Arizona Department of Gaming, Colorado Limited Gaming Control Commission, Connecticut State Department of Consumer Protection, the Illinois Gaming Board, the Indiana Gaming Commission, the Iowa Racing and Gaming Commission, the Michigan Gaming Control Board, the New Hampshire Lottery Commission, the New Jersey Division of Gaming Enforcement, the Oregon State Lottery, the Pennsylvania Gaming Control Board, the Tennessee Education Lottery Corporation, the Virginia Lottery, the West Virginia Lottery, and the Wyoming Pari-Mutuel Commission. We also operate retail sportsbooks in Colorado, Connecticut, Illinois, Iowa, Louisiana, Mississippi, New Hampshire, New Jersey and New York pursuant to state licensing regimes.

~~B2B~~On May 14, 2018, the U.S. Supreme Court issued an opinion determining that PASPA was unconstitutional. PASPA prohibited certain states from “authorizing by law” any form of sports betting. In striking down PASPA, the Supreme Court opened the potential for state-by-state authorization of sports betting. Several states and territories, including Arizona, Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Louisiana, Maryland, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Dakota, Tennessee, Virginia, Washington, Washington, D.C., West Virginia, and Wyoming already have laws authorizing and regulating some form of sports betting online or in brick-and-mortar establishments. Sports betting in the United States is subject to additional laws, rules and regulations at the state level. See “Risk Factors - Risk Factors Relating to our Business and Industry - Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business. Any change in existing regulations or their interpretation, or the regulatory climate applicable to our products and services, or changes in tax rules and regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.”

Our B2B business, formerly SBTech, has obtained licenses (and approvals, as applicable) in six states in the United States and in the United Kingdom, Gibraltar, Malta and Romania. Additionally, our B2B business has certified its software in various territories, including in Denmark, Italy, Nigeria, Portugal, South Africa, Spain and Sweden, and its services are available in Azerbaijan, Belgium, Cyprus, Czech Republic, Greece, Mexico and Spain under local licenses held by operators using SBTech’s products and services in these jurisdictions.11

~~As of December 31, 2020, we supply our SBTech products and services, sportsbook and~~ iGaming services online in New Jersey and our SBTech products and services and sportsbook online in Oregon pursuant to an agreement with the Oregon State Lottery. We also supply retail sportsbook services in Arkansas, Colorado, Indiana, Mississippi, New Jersey and Pennsylvania pursuant to state licensing regimes. In addition, we supply our SBTech products and services, sportsbook and iGaming services to customers in additional jurisdictions.

~~Data~~As of December 31, 2021, we operate our iGaming product in New Jersey, pursuant to a transactional waiver granted by the New Jersey Division of Gaming Enforcement, in Connecticut pursuant to an interim license granted by the Connecticut State Department of Consumer Protection, in Michigan pursuant to a license granted by the Michigan Gaming Control Board, in Pennsylvania, pursuant to a license granted by the Pennsylvania Gaming Control Board, and ~~Privacy~~in West Virginia, pursuant to an interim license granted by the West Virginia Lottery.

InGenerally, ~~addition~~online togambling ~~our~~in ~~licensing regime~~the ~~for~~United ~~our~~States ~~offerings~~is only lawful when specifically permitted under applicable state law. At the federal level, weseveral ~~also~~laws ~~take~~provide ~~significant~~federal ~~measures~~law toenforcement ~~protect~~with ~~users’~~the ~~privacy~~authority to enforce and ~~data~~prosecute gambling operations conducted in violation of underlying state gambling laws. ~~Our~~These ~~programs~~enforcement ~~consist~~laws include the Unlawful Internet Gambling Enforcement Act (the “UIGEA”), the Illegal Gambling Business Act and the Travel Act. No violation of the ~~following:~~ UIGEA, the Illegal Gambling Business Act or the Travel Act can be found absent a violation of an underlying state law or other federal law.

~~Because~~In ~~we handle~~addition, ~~collect~~the Wire Act of 1961 (the “Wire Act”) provides that anyone engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, ~~store,~~ or for the transmission of a wire communication which entitles the recipient to receive, ~~transmit~~money ~~and~~or ~~otherwise~~credit ~~process~~as ~~certain~~a ~~personal~~result of bets or wagers, or for information assisting in the placing of ~~our~~bets ~~users~~or ~~and~~wagers, ~~employees~~will be fined or imprisoned, weor ~~are~~both. ~~also~~However, ~~subject~~the Wire Act notes that it shall not be construed to ~~federal,~~ ~~state~~prevent ~~and~~the transmission in interstate or foreign ~~laws~~commerce ~~related~~of toinformation for use in news reporting of sporting events or contests, or for the ~~privacy~~transmission ~~and~~of ~~protection~~information assisting in the placing of bets or wagers on a sporting event or contest from a state or foreign country where betting on that sporting event or contest is legal into a state or foreign country in which such ~~data~~betting is legal. ~~Regulations~~There ~~such~~is ongoing legal action as ~~the~~to ~~California~~whether ~~Consumer Privacy~~the Wire Act, ~~which~~applies isbeyond asports ~~new,~~betting. ~~untested~~A ~~law,~~federal ~~could~~court ~~affect~~of ~~our~~first ~~business~~instance has ruled that it does not; the decision was appealed but rejected on January 20, ~~and~~2021 ~~its~~by ~~potential~~the ~~impact~~U.S. isCourt ~~unknown~~of Appeals for the First Circuit.

With our operations in Europe, we may also face particular privacy, data security and data protection risks in connection with requirements of the General Data Protection Regulation of the European Union (EU) 2016/679 (the “GDPR”) and other data protection regulations. Any failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data. In the event of a data breach, we are also subject to breach notification laws in the jurisdictions in which we operate, including the GDPR, and the risk of litigation and regulatory enforcement actions.B2B

~~Any~~Our ~~significant~~B2B ~~change~~business, toformerly ~~applicable laws~~SBTech, ~~regulations,~~has ~~interpretations~~obtained oflicenses ~~laws~~in orvarious ~~regulations,~~states orin ~~market practices, regarding~~ the ~~use~~United ofStates ~~personal~~and ~~data,~~in ~~or regarding~~ the ~~manner~~United inKingdom, ~~which~~Gibraltar, weMalta, ~~seek~~Romania ~~to comply with applicable laws~~ and ~~regulations~~Belgium. Additionally, ~~could~~our ~~require~~B2B usbusiness tohas ~~make~~certified ~~modifications~~its tosoftware ~~our~~in ~~products, services,~~multiple ~~policies,~~regulated ~~procedures,~~jurisdictions ~~notices,~~in ~~and~~accordance ~~business~~with ~~practices,~~local ~~including~~licenses ~~potentially~~held ~~material~~by ~~changes.~~operators ~~Such~~utilizing ~~changes~~SBTech’s ~~could~~software ~~potentially have~~in anthese ~~adverse impact on our business~~jurisdictions.

~~Compliance~~As of December 31, 2021, we supply our SBTech online solution in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Michigan, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Tennessee, Virginia, West Virginia, and Wyoming. We also supply retail sportsbook services in Colorado, Connecticut, Illinois, Iowa, Louisiana, Mississippi, New Hampshire, New Jersey and New York pursuant to state licensing regimes. In addition, we supply our SBTech products and services, sportsbook and iGaming services to customers in additional jurisdictions.

WeData ~~have~~Protection ~~developed~~ and implemented an internal compliance program to help ensure that we comply with legal and regulatory requirements imposed on us in connection with our DFS, Sportsbook and iGaming activities. Our compliance program focuses on, among other things, reducing and managing problematic gaming and providing tools to assist users in making educated choices related to gaming activities.Privacy

~~SBTech~~In ~~offerings~~addition ~~have been built from the ground up~~ to ~~meet~~our ~~the~~licensing ~~needs~~regime offor ~~differing~~our ~~regulatory regimes~~offerings, ~~including~~we ~~configurable~~also ~~regulatory~~take ~~and~~significant ~~responsible gaming~~measures ~~controls~~to ~~such~~protect asusers’ ~~responsible~~privacy ~~gaming tests, operator alerts on player behavior, deposit limits, betting limits, loss limits, timeout facilities, session limits, reality checks, balance thresholds~~ and ~~intended gaming amounts~~data. ~~These~~Our ~~features~~programs ~~allow~~consist ~~the operators’ customers full control~~ of ~~their~~the ~~gaming to allow them to play responsibly.~~following:

~~Responsible~~Because we handle, collect, store, receive, transmit and ~~Safer~~otherwise ~~Gaming~~process certain personal information of our users and employees, we are also subject to federal, state and foreign laws related to the privacy and protection of such data. Regulations such as the California Consumer Privacy Act, which is a new, untested law, could affect our business, and its potential impact is unknown.

WeWith ~~view~~our ~~the~~operations ~~safety~~in ~~and~~Europe, ~~welfare of~~we ~~our~~may ~~users~~also asface ~~critical~~particular toprivacy, ~~our~~data ~~business~~security and ~~have~~data ~~made~~protection ~~appropriate~~risks ~~investments~~ in ~~our~~connection ~~processes~~with ~~and~~requirements ~~systems.~~of Wethe ~~are~~General ~~committed to~~Data ~~industry-leading~~Protection ~~responsible~~Regulation ~~gaming~~of ~~practices~~the European Union (EU) 2016/679 (the “GDPR”) and ~~seek~~other todata ~~provide~~protection ~~our~~regulations. ~~users~~Any failure to comply with ~~the~~these ~~resources~~rules may ~~and~~result ~~services~~in ~~they~~regulatory ~~need~~fines or penalties including orders that require us to ~~play responsibly~~change the way we process data. ~~Additionally~~In the event of a data breach, ~~all~~we ~~our~~are ~~employees~~also ~~take~~subject ~~responsible~~to ~~gaming~~breach ~~training~~notification ~~with~~laws ~~mandatory~~in ~~periodic~~the ~~refresher~~jurisdictions ~~training~~in which we operate, ~~overseen by~~including ~~our~~the ~~compliance~~GDPR, ~~team~~and the risk of litigation and regulatory enforcement actions.

13 Any significant change to applicable laws, regulations, interpretations of laws or regulations, or market practices, regarding the use of personal data, or regarding the manner in which we seek to comply with applicable laws and regulations, could

~~Segment and Related Information~~12

Arequire ~~discussion~~us ofto ~~our segment~~make ~~structure~~modifications isto ~~available~~our inproducts, ~~Note~~services, 12policies, ~~Segment~~procedures, ~~Information~~notices, ofand ~~the~~business ~~Notes~~practices, toincluding ~~the~~potentially ~~Consolidated~~material ~~Financial~~changes. ~~Statements~~Such ~~included in~~changes ~~this~~could ~~Annual~~potentially ~~Report~~have an adverse impact on our business.

~~Available Information~~Compliance

~~Our Internet~~We ~~address~~have isdeveloped ~~www.DraftKings.com. Our website~~ and ~~the~~implemented ~~information~~an ~~contained~~internal ~~therein~~compliance orprogram ~~linked~~to ~~thereto~~help ~~are~~ensure ~~not~~that ~~part~~we ofcomply ~~this Annual~~with ~~Report.~~legal Weand ~~make~~regulatory ~~available~~requirements ~~free~~imposed ofon ~~charge~~us ~~through~~in ~~our~~connection ~~Internet~~with ~~website~~ our ~~annual~~DFS, ~~reports~~Sportsbook onand ~~Form 10-K,~~iGaming ~~quarterly~~activities. ~~reports on~~Our ~~Form 10-Q,~~compliance ~~current~~program ~~reports~~focuses on ~~Form 8-K~~, ~~proxy~~among ~~statements~~other things, ~~registration~~reducing ~~statements~~ and ~~amendments~~managing toproblematic ~~those~~gaming ~~reports filed~~and orproviding ~~furnished~~tools ~~pursuant~~ to ~~the~~assist ~~Exchange~~users ~~Act~~in asmaking ~~soon~~educated aschoices ~~reasonably~~related ~~practicable after we electronically file such material with, or furnish them~~ to ~~the~~gaming ~~SEC~~activities. The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at www.sec.gov.

~~Item~~SBTech 1Aofferings have been built from the ground up to meet the needs of differing regulatory regimes, including configurable regulatory and responsible gaming controls such as responsible gaming tests, operator alerts on player behavior, deposit limits, betting limits, loss limits, timeout facilities, session limits, reality checks, balance thresholds and intended gaming amounts. ~~Risk~~These ~~Factors~~features allow the operators’ customers full control of their gaming to allow them to play responsibly.

~~Our~~Responsible ~~business is subject to numerous risks~~ and ~~uncertainties~~Safer that you should be aware of in evaluating our business. If any such risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks described below are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations. The risk factors described below should be read together with the other information set forth in this Annual Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.Gaming

~~Summary~~We view the safety and welfare of our users as critical to our business and have made appropriate investments in our processes and systems. We are committed to industry-leading responsible gaming practices and seek to provide our users with the ~~Material~~resources ~~Risks~~and ~~Associated~~services they need to play responsibly. Additionally, all our employees take responsible gaming training with ~~Our~~mandatory ~~Business~~periodic refresher training, overseen by our compliance team.

~~These~~Segment ~~risks~~and ~~include,~~Related ~~but are not limited to, the following:~~Information

·A ~~Competition~~discussion ~~within~~of ~~the~~our ~~global~~segment ~~entertainment~~structure ~~and gaming industries~~ is ~~intense~~available ~~and~~in ~~our~~Note ~~existing and potential users may be attracted to competing forms of entertainment such as television~~13, ~~movies~~Segment ~~and sporting events~~Information, asof ~~well~~the asNotes ~~other~~to ~~entertainment and gaming options on~~ the ~~Internet.~~Consolidated IfFinancial ~~our~~Statements ~~offerings~~included doin ~~not~~this ~~continue~~Annual ~~to be popular, our business could be harmed~~Report.

·Available ~~Reductions in discretionary consumer spending could have an adverse effect on our business, financial condition, results of operations and prospects.~~Information

·Our Internet address is www.DraftKings.com. Our ~~projections~~website and the information contained therein or linked thereto are ~~subject~~not topart ~~significant~~of ~~risks,~~this ~~assumptions,~~Annual ~~estimates~~Report. ~~and~~We ~~uncertainties~~make available free of charge through our internet website our annual reports on Form 10-K, ~~including~~quarterly ~~assumptions~~reports ~~regarding~~on ~~future~~Form 10-Q, ~~legislation~~current ~~and~~reports ~~changes~~on inForm 8-K, ~~regulations~~proxy statements, ~~both~~registration ~~inside~~statements and ~~outside~~amendments ofto those reports filed or furnished pursuant to the ~~United~~Exchange ~~States.~~Act Asas asoon ~~result,~~as ~~our~~reasonably ~~projected~~practicable ~~revenues~~after we electronically file such material with, ~~market~~or ~~share~~furnish them to the SEC. The SEC maintains a website that contains reports, ~~expenses~~proxy statements and ~~profitability~~other information regarding issuers that file electronically with the SEC. These materials may ~~differ~~be ~~materially~~obtained ~~from~~electronically ~~our~~by ~~expectations~~accessing the SEC’s website at www.sec.gov.

·Item ~~The~~1A. ~~success,~~Risk ~~including win or hold rates, of existing or future sports betting and iGaming products depends on a variety of factors and is not completely controlled by us~~Factors.

·Our Webusiness ~~rely~~is onsubject ~~information~~to ~~technology~~numerous risks and ~~other~~uncertainties ~~systems~~that ~~and~~you ~~services,~~should ~~and~~be aware of in evaluating our business. If any ~~failures,~~such ~~errors,~~risks ~~defects~~and oruncertainties ~~disruptions~~actually inoccur, our ~~systems~~business, orprospects, ~~services~~financial condition and results of operations could ~~diminish~~be ~~our~~materially ~~brand~~and adversely affected. The risks described below are not the only risks that we face. Additional risks and ~~reputation,~~uncertainties ~~subject~~not uscurrently known to ~~liability~~us, ~~disrupt~~or ~~our~~that ~~business,~~we ~~affect~~currently ~~our~~deem ~~ability~~ to ~~scale~~be ~~our~~immaterial, ~~technical~~may ~~infrastructure~~also ~~and~~materially adversely affect our ~~operating~~business, ~~results~~prospects, financial condition and ~~growth~~results ~~prospects~~of operations. ~~Our~~The ~~games~~risk ~~and~~factors described below should be read together with the other ~~software~~information ~~applications~~set ~~and~~forth ~~systems~~in this Annual Report, including our consolidated financial statements and the ~~third-party~~related ~~platforms~~notes, ~~upon~~as ~~which~~well ~~they~~as ~~are~~in ~~made~~other ~~available~~documents ~~could~~that ~~contain~~we ~~undetected~~file ~~errors~~with the SEC.

·Summary Weof ~~rely~~the onMaterial ~~other~~Risks ~~third-party~~Associated ~~sports data providers for real-time and accurate data for sporting events, and if such third parties do not perform adequately or terminate their relationships~~ with ~~us,~~Our ~~our costs may increase and our business, financial condition and results of operations could be adversely affected.~~Business

·These Ifrisks ~~Internet and other technology-based service providers experience service interruptions~~include, ~~our~~but ~~ability~~are tonot ~~conduct~~limited ~~our business may be impaired and our business~~to, ~~financial~~the ~~condition and results of operations could be adversely affected.~~following:

14 •Competition within the global entertainment and gaming industries is intense and our existing and potential users may be attracted to competing forms of entertainment such as television, movies and sporting events, as well as other entertainment and gaming options on the Internet. If our offerings do not continue to be popular, our business could be harmed.

·•Reductions ~~We rely on strategic relationships with casinos, tribes and horse-tracks~~ in ~~order~~discretionary toconsumer bespending ~~able~~could tohave ~~offer~~an ~~our~~adverse ~~products~~effect inon ~~certain jurisdictions. If we cannot establish and manage such relationships with such partners,~~ our business, financial condition, ~~and~~ results of operations ~~could~~and ~~be adversely affected~~prospects.

· Our growth prospects may suffer if we are unable to develop successful offerings or if we fail to pursue additional offerings. In addition, if we fail to make the right investment decisions in our offerings and technology, we may not attract and retain key users and our revenue and results of operations may decline.13

· •Our ~~business~~projections ~~model~~are ~~depends~~subject ~~upon~~to ~~the~~significant ~~continued~~risks, ~~compatibility~~assumptions, ~~between~~estimates ~~our app~~ and ~~the~~uncertainties, ~~major~~including ~~mobile~~assumptions ~~operating~~regarding ~~systems~~future legislation and ~~upon~~changes ~~third-party~~in ~~platforms~~regulations, ~~for~~both ~~the~~inside ~~distribution~~and outside of ~~our~~the ~~product~~United ~~offerings~~States. IfAs ~~Google~~a ~~Play~~result, ~~or the Apple App Store prevent users from downloading~~ our ~~apps~~projected ~~or block advertising from being delivered to our users~~revenues, ~~our~~market ~~ability to grow our revenue~~share, ~~profitability~~expenses and ~~prospects~~profitability may bediffer ~~adversely~~materially ~~affected~~from our expectations.

·•The Wesuccess, ~~may~~including ~~invest~~win in or ~~acquire~~hold ~~other businesses~~rates, ~~and~~of ~~our~~existing ~~business~~or ~~may~~future ~~suffer~~sports ifbetting weand ~~are~~iGaming ~~unable~~products todepends ~~successfully~~on ~~integrate~~a ~~acquired~~variety ~~businesses~~of ~~into~~factors ~~our~~and ~~company~~is ornot ~~otherwise~~completely ~~manage~~controlled ~~the~~by ~~growth associated with multiple acquisitions~~us.

·•We ~~Our~~rely ~~business~~on isinformation ~~subject~~technology toand aother ~~variety~~systems ~~of U.S.~~ and ~~foreign laws~~services, ~~many of which are unsettled~~ and ~~still~~any ~~developing~~failures, ~~and~~errors, ~~which~~defects ~~could subject us to claims~~ or ~~otherwise~~disruptions ~~harm~~in our ~~business.~~systems ~~Any change in existing regulations~~ or ~~their~~services ~~interpretation,~~could ordiminish ~~the regulatory climate applicable to~~ our ~~products~~brand and ~~services~~reputation, orsubject ~~changes~~us into ~~tax~~liability, ~~rules~~disrupt ~~and~~our ~~regulations~~business, oraffect ~~interpretation~~our ~~thereof~~ability ~~related~~ to scale our ~~products~~technical infrastructure and ~~services, could~~ adversely ~~impact~~affect our ~~ability~~operating toresults ~~operate~~and ~~our~~growth ~~business~~prospects. asOur ~~currently~~games ~~conducted~~and orother assoftware weapplications ~~seek~~and tosystems, ~~operate~~and in the ~~future,~~third-party ~~which~~platforms ~~could~~upon ~~have~~which athey ~~material~~are ~~adverse~~made ~~effect~~available oncould ~~our~~contain ~~financial~~undetected ~~condition and results of operations~~errors.

·•We ~~Our~~rely ~~growth~~on ~~prospects~~other ~~depend~~third-party onsports ~~the~~data ~~legal~~providers ~~status~~for of real-~~money~~time ~~gaming~~and inaccurate ~~various~~data ~~jurisdictions,~~for ~~predominantly~~sporting ~~within the United States~~events, and ~~legalization~~if ~~may~~such ~~not~~third ~~occur~~parties indo asnot ~~many~~perform ~~states~~adequately ~~as we expect,~~ or ~~may~~terminate ~~occur~~their atrelationships awith ~~slower pace than we anticipate. Additionally~~us, ~~even~~our ifcosts ~~jurisdictions legalize real money gaming, this~~ may beincrease ~~accompanied by legislative or regulatory restrictions~~ and~~/or~~ ~~taxes~~our ~~that make it impracticable or less attractive to operate in those jurisdictions~~business, orfinancial ~~the~~condition ~~process~~and ~~of implementing regulations or securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, which could adversely affect our future~~ results of operations ~~and~~could ~~make~~be itadversely ~~more difficult to meet our expectations for financial performance~~affected.

·•If ~~Our~~Internet ~~growth~~and ~~prospects~~other ~~and~~technology-based ~~market~~service ~~potential~~providers ~~will~~experience ~~depend~~service oninterruptions, our ability to ~~obtain~~conduct ~~licenses~~our tobusiness ~~operate~~may inbe aimpaired ~~number of jurisdictions~~ and ~~if we fail to obtain and subsequently maintain such licenses~~ our business, financial condition, and results of operations ~~and prospects~~ could be ~~impaired~~adversely affected.

· •We ~~have~~rely ~~been,~~on ~~and~~strategic ~~continue~~relationships towith becasinos, ~~the~~tribes ~~subject of governmental investigations~~ and ~~inquiries~~horse-tracks ~~with~~in ~~respect~~order to ~~the~~be ~~operation~~able ofto offer our ~~businesses~~products ~~and~~in wecertain ~~could~~jurisdictions. beIf ~~subject~~we tocannot ~~future~~establish ~~governmental investigations~~ and ~~inquiries,~~manage ~~legal~~such ~~proceedings~~relationships ~~and~~with ~~enforcement actions. Any~~ such ~~investigation~~partners, ~~inquiry~~our business, ~~proceeding~~financial orcondition ~~action,~~and ~~could~~results ~~adversely~~of ~~affect~~operations ~~our~~could ~~business~~be adversely affected.

·•Our ~~Negative~~growth ~~events~~prospects ormay ~~negative~~suffer ~~media~~if ~~coverage~~we ~~relating~~are unable to, develop successful offerings or aif ~~declining~~we ~~popularity~~fail ~~of,~~to ~~daily~~pursue ~~fantasy~~additional ~~sports,~~offerings. ~~sports~~In ~~betting~~addition, ~~the~~if ~~underlying~~we ~~sports~~fail orto ~~athletes,~~make ~~online~~the ~~sports~~right ~~betting~~investment ordecisions ~~iGaming~~ in ~~particular,~~our orofferings ~~other~~and ~~negative~~technology, ~~coverage~~we may ~~adversely~~not ~~impact~~attract ~~our~~and ~~ability to~~ retain orkey ~~attract~~ users, ~~which~~and ~~could~~our ~~have~~revenue anand ~~adverse~~results ~~impact~~of onoperations ~~our~~may ~~business~~decline.

·•Our ~~Due~~business tomodel ~~the~~depends ~~nature~~upon ofthe ~~our~~continued ~~business,~~compatibility webetween ~~are~~our ~~subject~~app toand ~~taxation~~the inmajor amobile ~~number~~operating ofsystems ~~jurisdictions~~ and ~~changes~~upon ~~in,~~third-party orplatforms ~~new~~for ~~interpretations~~the distribution of, ~~tax~~our ~~laws,~~product ~~tax~~offerings. ~~rulings~~If orGoogle ~~their~~Play ~~application~~or bythe ~~tax~~Apple ~~authorities~~App ~~could~~Store ~~result~~prevent inusers ~~additional~~from ~~tax~~downloading ~~liabilities and could materially affect~~ our ~~financial~~apps ~~condition~~or ~~and~~block ~~results~~advertising offrom ~~operations.~~being Wedelivered ~~are also subject~~ to ~~periodic~~our ~~audits~~users, ~~and~~our ~~examinations~~ability byto ~~the~~grow ~~Internal~~our ~~Revenue Service (the “IRS”)~~revenue, asprofitability ~~well as state~~ and ~~local~~prospects ~~taxing authorities, the results of which~~ may ~~materially~~be ~~impact~~adversely ~~our financial statements in the period in which the audit or examination occurs~~affected.

·•We ~~While~~may weinvest ~~work~~in toor ~~integrate~~acquire ~~the~~other ~~DraftKings~~businesses, and ~~SBT~~our ~~businesses~~business ~~and~~may ~~operations,~~suffer ~~management’s~~if ~~focus~~we ~~and~~are ~~resources~~unable ~~may~~to besuccessfully ~~diverted~~integrate ~~from~~acquired ~~operational~~businesses ~~matters~~into ~~and~~our ~~other~~company ~~strategic~~or ~~opportunities~~otherwise manage the growth associated with multiple acquisitions.

·•Our ~~Although~~business weis ~~expect~~subject ~~that~~to ~~the~~a ~~Business~~variety ~~Combination~~of ~~will~~U.S. ~~produce~~and ~~substantial~~foreign ~~synergies~~laws, ~~the~~many ~~integration~~ of ~~the~~which ~~two~~are ~~companies,~~unsettled ~~incorporated~~and instill ~~different~~developing ~~countries,~~and ~~with~~which ~~geographically~~could ~~dispersed~~subject ~~operations,~~us ~~and~~to ~~with~~claims ~~different~~or otherwise harm our business. ~~cultures~~Any ~~and~~change ~~compensation~~in ~~structures,~~existing ~~presents~~regulations ~~management~~or ~~challenges.~~their ~~There~~interpretation, ~~can~~or bethe noregulatory ~~assurance~~climate ~~that~~applicable ~~this~~to ~~integration~~our products and services, or changes in tax rules and ~~the~~regulations ~~synergies~~or ~~expected~~interpretation thereof related to ~~result~~our ~~from~~products ~~that~~and ~~integration~~services, ~~will~~could beadversely ~~achieved~~impact our ability to operate our business as ~~rapidly~~currently conducted or as we seek to operate in the ~~extent~~future, ~~currently~~which ~~anticipated~~could have a material adverse effect on our financial condition and results of operations.

15 •Our growth prospects depend on the legal status of real-money gaming in various jurisdictions, predominantly within the United States, and legalization may not occur in as many states as we expect, or may occur at a slower pace than we anticipate. Additionally, even if jurisdictions legalize real money gaming, this may be accompanied by legislative or regulatory restrictions and/or taxes that make it impracticable or less attractive to operate in those jurisdictions, or the process of implementing regulations or securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, which could adversely affect our future results of operations and make it more difficult to meet our expectations for financial performance.

· •Our ~~business~~growth ~~now~~prospects ~~includes~~and amarket ~~B2B~~potential ~~business~~will ~~model,~~depend ~~primarily in international jurisdictions, which business depends~~ on ~~the underlying financial performance of~~ our ~~direct~~ability ~~operators~~to ~~and~~obtain ~~its~~licenses ~~resellers.~~to Asoperate in a ~~material~~number ~~part~~ of ~~SBT’s~~jurisdictions ~~revenue~~and isif ~~currently~~we ~~generated~~fail ~~through~~to ~~resellers~~obtain and ~~direct~~subsequently ~~sales~~maintain ~~to operators, a decline in~~ such ~~resellers’~~licenses orour ~~direct~~business, ~~operators’~~ financial ~~performance~~condition, orresults ~~a termination~~ of ~~some~~operations orand ~~all~~prospects ~~of the agreements with such resellers or operators~~ could ~~have~~be ~~a material adverse effect on our business~~impaired.

· SBT’s business, which includes significant international operations, is likely to expose us to foreign currency transaction and translation risks. As a result, changes in the valuation of the U.S. dollar in relation to other currencies could have positive or negative effects on our profit and financial position.14

·•We ~~The~~have ~~trading~~been, ~~price~~and ofcontinue ~~our~~to ~~Class~~be, Athe ~~common~~subject ~~stock~~of ~~has~~governmental ~~been,~~investigations and ~~will~~inquiries ~~likely~~with ~~continue~~respect to the operation of our businesses and we could be subject to future governmental investigations and inquiries, ~~volatile~~legal proceedings and ~~you~~enforcement ~~could~~actions. ~~lose~~Any ~~all~~such investigation, inquiry, proceeding or ~~part~~action, ofcould ~~your~~adversely ~~investment~~affect our business.

·•Negative ~~Because~~events weor ~~are~~negative media coverage relating to, or a ~~“controlled~~declining ~~company”~~popularity ~~under~~of, ~~The~~daily ~~Nasdaq~~fantasy ~~Stock~~sports, ~~Market~~sports ~~listing~~betting, ~~standards~~the underlying sports or athletes, ~~our~~online ~~stockholders~~sports ~~may~~betting ~~not~~or ~~have~~iGaming ~~certain~~in ~~corporate~~particular, ~~governance~~or ~~protections~~other ~~that~~negative ~~are~~coverage ~~available~~may adversely impact our ability to ~~stockholders~~retain ofor ~~companies~~attract ~~that~~users, ~~are~~which ~~not~~could ~~controlled~~have ~~companies~~an adverse impact on our business.

·•Due ~~Our~~to ~~dual~~the ~~class~~nature ~~structure~~of ~~has~~our ~~the~~business, ~~effect~~we are subject to taxation in a number of ~~concentrating~~jurisdictions ~~voting~~and ~~power~~changes ~~with~~in, or new interpretations of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our ~~Chief~~financial ~~Executive~~condition ~~Officer~~and results of operations. We are also subject to periodic audits and ~~Co-Founder~~examinations by the Internal Revenue Service (the “IRS”), ~~which~~as ~~limits~~well anas ~~investor’s~~state ~~ability~~and tolocal ~~influence~~taxing authorities, the ~~outcome~~results of ~~important~~which ~~transactions,~~may ~~including~~materially aimpact ~~change~~our financial statements in ~~control~~the period in which the audit or examination occurs.

~~The~~•Although ~~summary~~we ~~risk factors~~expect ~~described~~that ~~above should be read together with~~ the ~~text~~Business ofCombination ~~the~~will ~~full~~produce ~~risk~~substantial ~~factors~~synergies, ~~below and in~~ the ~~other~~integration ~~information~~of ~~set forth in this Annual Report, including our consolidated financial statements and~~ the ~~related~~two ~~notes~~companies, asincorporated ~~well as~~ in ~~other~~different ~~documents that~~countries, ~~we file~~ with ~~the~~geographically ~~SEC.~~dispersed Ifoperations, ~~any such risks~~ and ~~uncertainties~~with ~~actually~~different ~~occur, our~~ business, ~~prospects,~~cultures ~~financial condition~~ and ~~results~~ ofcompensation ~~operations~~structures, ~~could~~presents bemanagement ~~materially and adversely affected~~challenges. ~~The~~There ~~risks~~can ~~summarized~~be ~~above~~no orassurance ~~described in full below are not the only risks~~ that wethis ~~face.~~integration, ~~Additional risks~~ and ~~uncertainties~~the ~~not~~synergies ~~currently~~expected ~~known~~ to ~~us,~~result orfrom that weintegration, ~~currently~~will ~~deem to~~ be ~~immaterial may~~achieved ~~also~~as ~~materially~~rapidly ~~adversely~~or ~~affect~~to ~~our~~the ~~business,~~extent ~~prospects,~~currently ~~financial condition and results of operations~~anticipated.

~~Risk~~•SBT’s ~~Factors~~business, ~~Relating~~which includes significant international operations, is likely to ~~Our~~expose ~~Business~~us to foreign currency transaction and ~~Industry~~translation risks. As a result, changes in the valuation of the U.S. dollar in relation to other currencies could have positive or negative effects on our profit and financial position.

~~Competition~~•We ~~within~~have ~~the~~substantial ~~global~~debt ~~entertainment and~~outstanding ~~gaming industries is intense~~ and ~~our existing and potential users~~ may beincur ~~attracted~~additional ~~to competing forms of entertainment such as television, movies and sporting events, as well as other entertainment and gaming options on the Internet~~debt. ~~If our offerings do not continue to be popular, our business could be harmed.~~

We•The ~~operate~~trading inprice ~~the~~of ~~global entertainment and gaming industries with~~ our ~~business-to-consumer~~Class A ~~offerings~~common ~~such~~stock ashas ~~DFS~~been, ~~Sportsbook~~ and ~~iGaming,~~will ~~and~~likely ~~our~~continue ~~business-~~to~~-business~~ ~~offerings. Our users face a vast array of entertainment choices. Other forms of entertainment, such as television, movies, sporting events and in-person casinos, are more well established and may~~ be ~~perceived by our users to offer greater variety~~, ~~affordability,~~volatile ~~interactivity~~ and ~~enjoyment.~~ Weyou ~~compete~~could ~~with~~lose ~~these~~all ~~other~~or ~~forms~~part of ~~entertainment~~your ~~for the discretionary time and income of our users~~investment. If we are unable to sustain sufficient interest in our recently launched sports betting and iGaming offerings in comparison to other forms of entertainment, including new forms of entertainment, our business model may not continue to be viable.

~~The~~•Because ~~specific industries in which~~ we ~~operate~~ are ~~characterized~~a by“controlled ~~dynamic~~company” ~~customer~~under ~~demand~~The ~~and~~Nasdaq ~~technological~~Stock ~~advances,~~Market ~~and~~listing ~~there is intense competition among online gaming and entertainment providers. A number of established~~standards, ~~well-financed companies producing online gaming and/or interactive entertainment products and services compete with~~ our ~~offerings,~~stockholders ~~and other well-capitalized companies~~ may ~~introduce competitive~~not ~~services.~~have ~~Such~~certain ~~competitors~~corporate ~~may~~governance ~~spend~~protections more money and time on developing and testing products and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful products or services than ours, which could negatively impact our business. Our competitors may also develop products, features, or services that are ~~similar~~available to ~~ours~~stockholders or that achieve greater market acceptance. Such competitors may also undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Furthermore, new competitors, whether licensed or not, may enter the iGaming industry. There has also been considerable consolidation among competitors in the entertainment and gaming industries and such consolidation and future consolidation could result in the formation of ~~larger~~companies ~~competitors~~that with increased financial resources and altered cost structures, which may enable them to offer more competitive products, gain a larger market share, expand offerings and broaden their geographic scope of operations. If we are not ~~able~~controlled ~~to maintain or improve our market share, or if our offerings do not continue to be popular, our business could suffer~~companies.

16 •Our dual class structure has the effect of concentrating voting power with our Chief Executive Officer and Co-Founder, which limits an investor’s ability to influence the outcome of important transactions, including a change in control.

~~Economic~~The ~~downturns~~summary risk factors described above should be read together with the text of the full risk factors below and ~~political~~ in the other information set forth in this Annual Report, including our consolidated financial statements and ~~market~~the ~~conditions~~related ~~beyond~~notes, as well as in other documents that we file with the SEC. If any such risks and uncertainties actually occur, our ~~control~~business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations.

~~Our~~Risk ~~financial~~Factors ~~performance is~~Relating ~~subject~~ to ~~global~~Our ~~and~~Business ~~U.S. economic conditions~~ and their impact on levels of spending by users and advertisers. Economic recessions have had, and may continue to have, far reaching adverse consequences across many industries, including the global entertainment and gaming industries, which may adversely affect our business and financial condition. In the past decade, global and U.S. economies have experienced tepid growth following the financial crisis in 2008 – 2009 and there appears to be an increasing risk of a recession due to international trade and monetary policy, the global coronavirus pandemic and other changes. If the national and international economic recovery slows or stalls, these economies experience another recession or any of the relevant regional or local economies suffers a downturn, we may experience a material adverse effect on our business, financial condition, results of operations or prospects.Industry

InCompetition ~~addition,~~within ~~changes in~~the ~~general~~global ~~market,~~entertainment ~~economic~~ and ~~political~~gaming ~~conditions~~industries inis ~~domestic~~intense and ~~foreign~~our ~~economies~~existing orand ~~financial~~potential ~~markets,~~users ~~including~~may ~~fluctuation in~~be ~~stock~~attracted ~~markets~~to ~~resulting~~competing ~~from,~~forms ~~among~~of ~~other~~entertainment ~~things~~such as television, ~~trends~~movies inand ~~the~~sporting ~~economy~~events, as awell ~~whole~~as ~~may~~other ~~reduce~~entertainment ~~users’ disposable income~~ and ~~advertisers’~~gaming ~~budgets.~~options ~~Any~~on ~~one~~the ofInternet. ~~these~~If ~~changes~~our ~~could~~offerings ~~have~~do anot ~~material~~continue ~~adverse~~to ~~effect~~be onpopular, our business, ~~financial~~could ~~condition, results~~be ~~of operations or prospects~~harmed.

~~Reductions~~We operate in ~~discretionary~~the global entertainment and gaming industries with our business-to-consumer ~~spending~~ ~~could~~offerings ~~have~~such anas ~~adverse~~DFS, ~~effect~~Sportsbook onand iGaming, and our business-to-business offerings. Our users face a vast array of entertainment choices. Other forms of entertainment, ~~financial~~such ~~condition~~as television, ~~results~~movies, sporting events and in-person casinos, are more well established and may be perceived by our users to offer greater variety, affordability, interactivity and enjoyment. We compete with these other forms of ~~operations~~entertainment for the discretionary time and ~~prospects~~income of our users. If we are unable to sustain sufficient interest in our sports

Our business is particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of which are difficult to predict and beyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce our users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as daily fantasy sports, sports betting and iGaming. As a result, we cannot ensure that demand for our offerings will remain constant. Adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending on leisure activities, such as daily fantasy sports and gaming.15

~~For example,~~betting ~~the outbreak of COVID-19, a virus originating in China causing potentially deadly respiratory tract infections, has negatively affected economic conditions regionally as well as globally,~~ and ~~has~~iGaming ~~caused~~offerings ~~a reduction~~ in ~~consumer~~comparison ~~spending. Efforts~~ to ~~contain~~ ~~the~~other ~~effect~~forms of ~~the~~entertainment, ~~virus~~including ~~have~~new ~~included~~forms ~~travel restrictions and restrictions on public gatherings. Many businesses have eliminated non-essential travel and canceled in-person events to reduce instances~~ of ~~employees and others being exposed to large public gatherings~~entertainment, ~~and~~our ~~state and local governments across the United States have restricted~~ business ~~activities~~model ~~and~~may ~~strongly encouraged,~~not ~~instituted~~continue ~~orders~~to orbe ~~otherwise restricted individuals from leaving their home~~viable.

The ~~direct~~specific ~~impact on~~industries ~~our business beyond disruptions~~ in ~~normal~~which ~~business~~we ~~operations~~operate inare ~~several~~characterized ofby ~~our~~dynamic ~~offices~~customer ~~has~~demand ~~been~~and ~~primarily~~technological ~~through the suspension~~advances, ~~postponement~~ and ~~cancellation~~there ofis ~~major~~intense ~~sports~~competition ~~and~~among ~~sporting~~online ~~events. Although~~gaming ~~many major sports seasons~~ and ~~sporting~~entertainment ~~events have~~providers. ~~recommenced~~A innumber ~~recent~~of ~~months~~established, ~~COVID~~well-19financed ~~could~~companies ~~have~~producing aonline ~~continued~~gaming ~~material~~and/or ~~adverse~~interactive ~~impact~~entertainment onproducts ~~economic~~ and ~~market~~services ~~conditions~~compete ~~and trigger~~with aour ~~period of continued global economic slowdown~~offerings, ~~especially~~and inother ~~light~~well-capitalized ofcompanies ~~potential~~may ~~subsequent~~introduce ~~waves~~competitive orservices. ~~new~~Such ~~strains~~competitors ofmay ~~the virus. The~~spend ~~rapid~~more ~~development~~money and ~~fluidity~~time ofon ~~this~~developing ~~situation~~and ~~precludes~~testing ~~any~~products ~~prediction~~and asservices, toundertake ~~the~~more ~~ultimate~~extensive ~~impact~~marketing ~~of COVID-19~~campaigns, ~~which~~ ~~remains~~adopt amore ~~material~~aggressive ~~uncertainty~~pricing ~~and~~or ~~risk~~promotional ~~with~~policies ~~respect~~or tootherwise ~~DraftKings,~~develop ~~our~~more ~~performance,~~commercially ~~and~~successful ~~our~~products ~~financial~~or ~~results~~services ~~and~~than ours, which could ~~adversely~~ ~~affect~~negatively impact our ~~financial results~~business. In ~~particular,~~Our ~~these~~competitors ~~changes~~may ~~have~~also ~~reduced~~develop ~~customers’ use of~~products, ~~and spending on~~features, ~~our~~ ~~product~~or ~~offerings,~~services ~~and~~that ~~have~~are ~~caused~~similar us to ~~issue~~ours ~~refunds~~or ~~for~~that ~~canceled~~achieve ~~events,~~greater ~~and~~market ~~some~~acceptance. ~~retail~~Such ~~casinos~~competitors ~~where~~may wealso ~~have~~undertake amore ~~branded sportsbooks~~far-reaching and ~~DFS~~successful ~~have~~product ~~reduced~~development ~~their~~efforts ~~capacity. Cancellation~~or ofmarketing ~~March Madness~~campaigns, ~~the~~or ~~delay~~may inadopt ~~the~~more ~~MLB~~aggressive ~~season,~~pricing ~~the~~policies. ~~truncated NBA playoffs~~Furthermore, ~~and~~new ~~other~~competitors, ~~events~~whether ~~affected~~licensed byor ~~COVID-19~~not, ~~has~~may ~~had~~enter anthe ~~adverse~~iGaming ~~impact~~industry. onThere ~~our~~has ~~revenue. Our~~also ~~revenue~~been ~~continues~~considerable toconsolidation ~~depend on~~among ~~major~~competitors ~~sports~~in ~~seasons~~the entertainment and ~~sporting~~gaming ~~events,~~industries and wesuch ~~may~~consolidation ~~not~~and ~~generate~~future asconsolidation ~~much~~could ~~revenue~~result ~~as we would have without the cancellation or postponements~~ in the ~~wake~~formation of ~~COVID-19. If~~larger acompetitors ~~large~~with ~~number~~increased offinancial ~~our~~resources ~~employees~~ and~~/or~~ aaltered ~~subset~~cost ~~of our key employees and executives are impacted by COVID-19~~structures, ~~our~~which ~~ability~~may toenable ~~continue~~them to ~~operate~~offer ~~effectively~~more ~~may~~competitive beproducts, ~~negatively~~gain ~~impacted. The~~a ~~ultimate~~larger ~~severity of~~market ~~the~~share, ~~coronavirus~~expand ~~outbreak~~offerings ~~is uncertain at this time~~ and ~~therefore~~broaden wetheir ~~cannot~~geographic ~~predict~~scope ~~the~~of ~~full impact it may have on our end markets and our~~ operations;. ~~however,~~If ~~the~~we ~~effect~~are onnot ~~our~~able ~~results~~to ~~could~~maintain ~~be material and adverse. Any significant~~ or ~~prolonged~~improve ~~decrease in~~our ~~consumer~~market ~~spending~~share, ~~on entertainment~~ or ~~leisure~~if ~~activities could adversely affect the demand for~~ our offerings, ~~reducing~~do ~~our~~not ~~cash flows~~continue ~~and~~to ~~revenues~~be popular, ~~and thereby materially harming~~ our business, ~~financial~~could ~~condition, results of operations and prospects~~suffer.

17 Economic downturns and political and market conditions beyond our control could adversely affect our business, financial condition and results of operations.

WeOur financial performance is subject to global and U.S. economic conditions and their impact on levels of spending by users and advertisers. Economic recessions have had, and may ~~experience~~continue ~~fluctuations~~to ~~in our~~have, ~~operating~~far ~~results~~reaching adverse consequences across many industries, including the global entertainment and gaming industries, which ~~make~~may adversely affect our ~~future~~business ~~results~~and ~~difficult~~financial condition. In the past decade, global and U.S. economies have experienced tepid growth following the financial crisis in 2008 – 2009 and there appears to ~~predict~~be an increasing risk of a recession due to international trade and ~~could~~monetary ~~cause~~policy, the global coronavirus pandemic and other changes. If the national and international economic recovery slows or stalls, these economies experience another recession or any of the relevant regional or local economies suffers a downturn, we may experience a material adverse effect on our ~~operating~~business, financial condition, results toof ~~fall~~operations ~~below expectations~~or prospects.

~~Our~~In ~~financial~~addition, ~~results have~~changes ~~fluctuated~~ in ~~the~~general ~~past~~market, economic and wepolitical ~~expect~~conditions ~~our~~in domestic and foreign economies or financial ~~results~~markets, toincluding ~~fluctuate~~fluctuation in stock markets resulting from, ~~quarter~~among toother ~~quarter~~things, trends in the ~~future.~~economy ~~These~~as ~~fluctuations~~ a whole may bereduce ~~due~~users’ todisposable aincome ~~variety~~and ofadvertisers’ ~~factors,~~budgets. ~~some~~Any one of ~~which~~these ~~are~~changes ~~outside~~could ofhave ~~our~~a ~~control~~material ~~and~~adverse ~~may~~effect ~~not~~on ~~fully~~our ~~reflect~~business, ~~the~~financial ~~underlying~~condition, ~~performance~~ results of ~~our~~operations ~~business~~or prospects.

~~Our~~Certain ~~financial results in any given quarter may be influenced by numerous factors, many~~ of ~~which we are unable to predict or are outside of~~ our ~~control, including the impact of seasonality and our betting results, and the other risks and uncertainties set forth herein. In particular, our betting~~ operations ~~have~~are ~~significant exposure to, and may be materially impacted by, sporting events and seasons, which can result~~ in ~~short~~non-~~term volatility in betting win margins and user engagement, thus impacting revenues~~U. While we have been able to forecast revenues from our daily fantasy sports business with greater precision than for new offerings, we cannot provide assurances that consumers will engage with our DFS offerings on a consistent basisS. ~~Consumer~~jurisdictions ~~engagement in our daily fantasy sports, sports betting~~ and ~~iGaming~~are ~~services~~subject ~~may~~to ~~decline or fluctuate as a result of a number of factors, including~~ the ~~popularity of the underlying sports~~economic, ~~the user’s level of satisfaction with our offerings~~political, ~~our ability to improve and innovate~~regulatory, ~~our ability to adapt our offerings, outages~~ and ~~disruptions~~other ofrisks ~~online services, the availability~~ of ~~live~~international sporting events, the services offered by our competitors, our marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others. Any decline or fluctuation in the recurring portion of our business may have a negative impact on our business, financial condition, results of operations ~~or prospects~~.

InWe ~~our~~conduct ~~iGaming~~business ~~product offering,~~in ~~operator~~numerous ~~losses~~countries ~~are~~that ~~limited~~carry ~~per~~high ~~stake~~levels ~~to a maximum payout. When looking at bets across a period~~ of ~~time~~currency, ~~however~~political, ~~these losses~~compliance ~~can~~and ~~potentially~~economic ~~be significant. Our quarterly financial results may also fluctuate based on whether we may pay out any jackpots to our iGaming users during the relevant quarter. As part of our iGaming offering~~risk, weincluding ~~may~~in ~~offer progressive jackpot games~~Ukraine. ~~Each~~ ~~time~~Operations ain ~~progressive~~these ~~jackpot~~countries ~~game~~can ispresent ~~played,~~many ~~a portion of the amount wagered by the user is contributed to the jackpot for that specific game or group of games. Once a jackpot is won~~risks, ~~the~~including ~~progressive~~volatility ~~jackpot is reset with a predetermined base amount. While we maintain a provision for these progressive jackpots~~ in ~~the~~gross ~~event~~domestic weproduct ~~choose~~and torates ~~offer them, the cost~~ of ~~the~~economic ~~progressive jackpot~~growth, ~~payout would be a cash outflow for our business in the period in which it is won with a potentially significant adverse effect on our~~ financial ~~condition~~ and ~~cash~~governmental ~~flows. Because winning is underpinned by a random mechanism~~instability, wecultural ~~cannot~~differences ~~predict~~(such ~~with absolute~~as ~~certainty~~employment ~~when~~and abusiness ~~jackpot~~practices) ~~will~~and bethe ~~won.~~imposition Inof ~~addition,~~exchange weand docapital ~~not insure against random outcomes or jackpot wins~~controls.

~~Our~~Instability ~~projections~~and ~~are~~uncertainties ~~subject~~arising tofrom ~~significant risks~~the global geopolitical environment and the evolving international and domestic political, ~~assumptions~~regulatory, ~~estimates~~ and ~~uncertainties~~economic landscape, including ~~assumptions~~the ~~regarding~~potential ~~future~~for ~~legislation~~changes in global trade policies, including sanctions and ~~changes~~trade inbarriers, ~~regulations~~and trends such as populism, ~~both~~ ~~inside~~economic nationalism and ~~outside~~negative ofsentiment toward multinational companies, as well as the ~~United~~cost ~~States.~~of Ascompliance awith ~~result~~increasingly complex and often conflicting regulations worldwide, can impair our ~~projected~~flexibility ~~revenues,~~in ~~market~~modifying ~~share~~our product offerings, ~~expenses~~marketing, ~~and~~hiring ~~profitability~~or ~~may differ~~other ~~materially~~strategies ~~from~~for growing our ~~expectations~~businesses, as well as our ability to improve productivity and maintain acceptable operating margins.

WeThe ~~operate~~United inStates ~~rapidly changing~~ and ~~competitive~~other ~~industries~~countries ~~and~~may ~~our~~implement ~~projections~~actions, ~~are~~including ~~subject~~trade toactions, ~~the~~tariffs, ~~risks~~export controls, and ~~assumptions~~sanctions, ~~made~~against byother ~~management~~countries ~~with~~or ~~respect to~~localities, ~~our~~including ~~industries.~~potentially ~~Operating~~against ~~results~~certain ~~are~~Russian ~~difficult~~government, togovernment-related, ~~forecast~~or ~~because~~other ~~they~~entities ~~generally~~or ~~depend~~individuals onrelated ~~our~~to ~~assessment~~actions ofin ~~the~~Ukraine, ~~timing~~which ~~of adoption~~along ofwith ~~future~~any ~~legislation~~retaliatory ~~and~~measures ~~regulations~~could byincrease ~~different states~~costs, ~~which~~adversely ~~are~~affect ~~uncertain.~~our ~~Furthermore~~operations, ifor weadversely ~~invest~~affect inour ~~the~~ability ~~development of~~to ~~new~~meet ~~products~~contractual orand ~~distribution~~financial ~~channels~~obligations. ~~that~~In doaddition, ~~not~~in ~~achieve~~connection ~~significant~~with ~~commercial~~the ~~success~~current status of international relations with Russia, ~~whether~~particularly ~~because~~in light of ~~competition~~potential ~~or otherwise,~~escalations wein ~~may~~conflict ~~not~~between ~~recover~~Russia and Ukraine, the ~~often~~U.S. ~~substantial~~government ~~“up~~has ~~front”~~stated ~~costs~~it ofis ~~developing~~considering ~~and~~imposing ~~marketing~~enhanced ~~those~~export controls on certain products and ~~distribution~~ ~~channels,~~sanctions oron ~~recover~~certain ~~the~~industry ~~opportunity~~sectors ~~cost~~and parties in Russia. The governments of ~~diverting~~other ~~management~~jurisdictions in which we operate, such as the European Union and ~~financial~~Canada, ~~resources~~may ~~away~~also ~~from~~implement ~~other~~additional ~~products~~ sanctions or ~~distribution~~other ~~channels~~restrictive measures. These

Additionally, as described above under “— Reductions in discretionary consumer spending could have an adverse effect on our business, financial condition, results of operations and prospects,” our business may be affected by reductions in consumer spending from time to time as a result of a number of factors which may be difficult to predict. This may result in decreased revenue levels, and we may be unable to adopt measures in a timely manner to compensate for any unexpected shortfall in income. This inability could cause our operating results in a given quarter to be higher or lower than expected. If actual results differ from our estimates, analysts may react negatively and our stock price could be materially impacted.16

18 potential sanctions and export controls, as well as any responses from Russia, could adversely affect us and/or our supply chain, business partners or customers.

WeWhile ~~have~~these afactors ~~new~~and ~~business~~their ~~model,~~impact ~~which makes~~are it difficult ~~for~~to uspredict, toany ~~forecast~~one ~~our~~or ~~financial~~more ~~results,~~of ~~creates~~them ~~uncertainty~~could ashave toa ~~how~~material ~~investors~~adverse ~~will~~effect ~~evaluate~~on our ~~prospects~~competitive position, ~~and~~ ~~increases~~results ~~the~~of ~~risk~~operations, ~~that~~financial wecondition ~~will~~or ~~not be successful~~liquidity.

~~DraftKings~~Reductions ~~was incorporated~~ in ~~2011~~discretionary ~~and~~consumer ~~began~~spending ~~offering~~could ~~the DFS products in 2012. DraftKings expanded from its DFS product offering to include Sportsbook and iGaming product offerings in 2018. Following the consummation of the Business Combination, we~~ have aan ~~new~~adverse ~~business~~effect ~~model~~on ~~and new offerings, including sports betting technology. Accordingly, it will be difficult for us to forecast~~ our ~~future financial results, and it will be uncertain how our new~~ business ~~model will affect investors’ perceptions and expectations of our prospects. Additionally~~, asfinancial ~~the only vertically integrated U.S.-based sports betting and online gaming company~~condition, it may be difficult for investors to evaluate our business due to the lack of similarly situated competitors. Furthermore, our new business model may not be successful. You should not rely upon our historical financial results ~~as indicators~~ of ~~our~~operations ~~future financial performance,~~ and ~~our financial results and stock price may be volatile~~prospects.

~~DraftKings~~Our ~~has~~business ais ~~history~~particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including gaming, can be affected by changes in the economy and consumer tastes, both of ~~losses~~which are difficult to predict and webeyond our control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may ~~continue to~~reduce ~~incur~~our ~~losses~~users’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as DFS, Sportsbook and iGaming. As a result, we cannot ensure that demand for our offerings will remain constant. Adverse developments affecting economies throughout the ~~future~~world, including a general tightening of availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases, could lead to a further reduction in discretionary spending on leisure activities, such as daily fantasy sports and gaming.

~~Since DraftKings was incorporated in 2011, it has experienced net losses and negative cash flows from operations.~~ We ~~experienced net losses of $844.3 million and $142.7 million in the years ended December 31, 2020 and 2019, respectively. We~~ may ~~continue to~~ experience ~~losses~~ influctuations ~~the future, and we cannot assure you that we will achieve profitability. We may continue to incur significant losses~~ in ~~future periods. We expect~~ our operating ~~expenses~~results, towhich ~~increase~~make inour ~~the~~ future asresults wedifficult ~~expand our operations. Furthermore, as a public company, we have incurred and expect~~ to ~~continue~~predict ~~to incur additional legal, accounting~~ and ~~other~~could ~~expenses~~cause ~~that Old DK did not incur as a private company. If~~ our ~~revenue~~operating ~~does~~results ~~not grow at a greater rate than our expenses, we will not be able~~ to ~~achieve~~fall ~~or maintain~~below ~~profitability~~expectations. We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our expenses exceed our revenue, our business may be negatively impacted and we may never achieve or maintain profitability.

Our financial results ofhave ~~operations~~fluctuated ~~may~~in the past and we expect our financial results to fluctuate from quarter to quarter in the future. These fluctuations may be due to ~~seasonality~~a ~~and~~variety ~~other~~of factors ~~and~~, ~~therefore,~~some ~~our~~of ~~periodic~~which ~~operating~~are ~~results~~outside ~~will~~of our control and may not befully ~~guarantees~~reflect ofthe ~~future~~underlying performance of our business.

Our ~~DFS~~financial ~~and~~results ~~Sportsbook operations~~in ~~may~~any ~~fluctuate~~given ~~due~~quarter tomay ~~seasonal~~be ~~trends~~influenced ~~and~~by ~~other~~numerous factors., Wemany ~~believe~~of ~~that~~which ~~significant~~we ~~sporting~~are ~~events~~unable ~~such~~to aspredict ~~the~~or ~~playoffs and~~are ~~championship~~outside ~~games~~of our control, ~~tend~~including tothe impact of seasonality and our betting results, ~~among~~and the other ~~things~~risks and uncertainties set forth herein. In particular, ~~revenues~~our ~~from~~betting operations, ~~key~~have ~~metrics~~significant exposure to, and ~~customer~~may ~~activity~~be materially impacted by, sporting events and ~~as such~~seasons, ~~DraftKings’~~which ~~historical~~can ~~revenues~~result ~~generally~~in ~~have~~short-term ~~been~~volatility ~~highest~~ in ~~the~~betting ~~fourth~~win ~~quarter~~margins ~~when~~and ~~most~~user ofengagement, ~~those~~thus ~~games~~impacting ~~occur~~revenues. A ~~majority~~While ofwe ~~our~~have ~~current~~been ~~sports~~able ~~betting~~to ~~and~~forecast ~~DFS~~revenues ~~revenue~~from isour ~~and~~daily ~~will~~fantasy ~~continue~~sports tobusiness bewith ~~generated~~greater ~~from~~precision ~~bets~~than ~~placed~~for onnew offerings, orwe ~~contests relating~~cannot ~~to,~~provide ~~the~~assurances ~~National~~that ~~Football~~consumers ~~League~~will ~~and~~engage ~~the~~with ~~National~~our ~~Basketball~~DFS ~~Association,~~offerings ~~each~~on ofa ~~which~~consistent ~~have~~basis. ~~their~~Consumer ~~own~~engagement ~~respective~~in ~~off-seasons~~our DFS, ~~which~~ ~~may~~Sportsbook ~~cause~~and ~~decreases~~iGaming inservices ~~our~~may ~~future~~decline ~~revenues~~or ~~during~~fluctuate ~~such~~as ~~periods.~~a ~~Our~~result ~~revenues~~of ~~may~~a ~~also~~number beof ~~affected~~factors, byincluding the ~~scheduling~~popularity of ~~major sporting~~the ~~events~~underlying ~~that~~sports, dothe ~~not~~user’s ~~occur~~level ~~annually~~of satisfaction with our offerings, ~~such~~our asability ~~the~~to ~~World~~improve ~~Cup~~and innovate, orour ~~the~~ability ~~cancellation~~to oradapt ~~postponement~~our ofofferings, ~~sporting~~outages ~~events~~ and ~~races,~~ ~~such~~disruptions asof online services, the ~~postponement~~availability of live sporting events, the ~~2020~~services ~~Summer~~offered ~~Olympic~~by ~~Games~~our ~~that~~competitors, ~~were~~our ~~supposed~~marketing toand ~~take~~advertising ~~place~~efforts ~~this~~or ~~past~~declines ~~summer.~~in Inconsumer ~~addition, certain~~activity ~~individuals~~generally oras ~~teams~~a ~~advancing~~result orof ~~failing~~economic todownturns, ~~advance~~among ~~and~~others. ~~their~~Any ~~scores~~decline ~~and~~or ~~other~~fluctuation ~~results~~in ~~within~~the ~~specific~~recurring ~~tournaments,~~portion ~~games or~~of ~~events~~our business may have a negative impact on our business, financial ~~performance~~condition, results of operations or prospects.

~~The~~In ~~success~~our iGaming product offering, ~~including~~operator ~~win~~losses orare ~~hold rates~~limited per stake to a maximum payout. When looking at bets across a period of time, however, these losses can potentially be significant. Our quarterly financial results may also fluctuate based on whether we may pay out any jackpots to our iGaming users during the relevant quarter. As part of ~~existing~~our iGaming offering, we may offer progressive jackpot games. Each time a progressive jackpot game is played, a portion of the amount wagered by the user is contributed to the jackpot for that specific game or ~~future~~group ~~sports~~of ~~betting~~games. ~~and~~Once ~~iGaming~~a ~~products~~jackpot ~~depends~~is onwon, the progressive jackpot is reset with a ~~variety~~predetermined base amount. While we maintain a provision for these progressive jackpots in the event we choose to offer them, the cost of ~~factors~~the progressive jackpot payout would be a cash outflow for our business in the period in which it is won with a potentially significant adverse effect on our financial condition and cash flows. Because winning is underpinned by a random mechanism, we cannot predict with absolute certainty when a jackpot will be won. In addition, we do not ~~completely~~insure ~~controlled by~~against usrandom outcomes or jackpot wins.

~~The~~Our ~~sports~~projections ~~betting and iGaming industries~~ are ~~characterized~~subject ~~by an element of chance. Accordingly, we employ theoretical win rates~~ to ~~estimate~~significant ~~what a certain type of sports bet or iGame~~risks, ~~on average~~assumptions, ~~will~~estimates ~~win or lose in the long run. Net win is impacted by variations in the hold percentage (the ratio of net win to total amount wagered), or actual outcome, on our iGames~~ and sports betting we offer to our users. We use the hold percentage as an indicator of an iGame’s or sports bet’s performance against its expected outcome. Although each iGame or sports bet generally performs within a defined statistical range of outcomesuncertainties, ~~actual~~including ~~outcomes may~~assumptions ~~vary~~regarding ~~for~~future ~~any~~legislation ~~given period. In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits~~ and ~~factors~~changes ~~that~~in ~~are beyond our control~~regulations, ~~such~~both asinside ~~a user’s skill, experience~~ and ~~behavior,~~outside ~~the mix~~ of ~~games played,~~ the ~~financial~~United ~~resources of users, the volume of bets placed and the amount of time spent gambling~~States. As a result, ofour ~~the~~projected ~~variability~~revenues, inmarket ~~these factors~~share, ~~the~~expenses ~~actual win rates on our online iGames~~ and ~~sports~~profitability ~~bets~~ may differ ~~from~~ ~~the~~materially ~~theoretical~~from ~~win rates we have estimated and could result in the winnings of~~ our ~~iGame’s or sports bet’s users exceeding those anticipated~~expectations. ~~The variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows.~~

19 We operate in rapidly changing and competitive industries and our projections are subject to the risks and assumptions made by management with respect to our industries. Operating results are difficult to forecast because they generally depend on

Our success also depends in part on our ability to anticipate and satisfy user preferences in a timely manner. As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty. We will need to continually introduce new offerings and identify future product offerings that complement our existing technology, respond to our users’ needs and improve and enhance our existing technology to maintain or increase our user engagement and growth of our business. We may not be able to compete effectively unless our product selection keeps up with trends in the digital sports entertainment and gaming industries in which we compete, or trends in new gaming products.17

Weour ~~rely~~assessment onof ~~information~~the ~~technology and~~timing ~~other~~of ~~systems~~adoption ~~and~~of ~~services,~~future legislation and ~~any~~regulations ~~failures~~by different states, ~~errors~~which are uncertain. Furthermore, ~~defects~~if orwe ~~disruptions~~invest in ~~our~~the ~~systems~~development orof ~~services~~new ~~could~~products ~~diminish~~or ~~our brand~~distribution ~~and~~channels ~~reputation,~~that ~~subject~~do usnot toachieve ~~liability,~~significant ~~disrupt~~commercial ~~our business~~success, ~~affect~~whether ~~our~~because ~~ability~~of tocompetition ~~scale~~or ~~our~~otherwise, ~~technical~~we ~~infrastructure~~may ~~and adversely~~not ~~affect~~recover ~~our~~the ~~operating~~often ~~results~~substantial ~~and~~“up ~~growth~~front” ~~prospects.~~costs ~~Our~~of ~~games~~developing and ~~other~~marketing ~~software~~those ~~applications~~products and ~~systems~~distribution channels, ~~and~~or recover the ~~third-party platforms~~opportunity ~~upon~~cost ~~which~~of ~~they~~diverting ~~are~~management ~~made~~and ~~available~~financial ~~could~~resources ~~contain~~away ~~undetected~~from ~~errors~~other products or distribution channels.

~~Our~~Additionally, ~~technology~~as ~~infrastructure is~~described ~~critical~~above tounder ~~the~~“— ~~performance~~Reductions ofin ~~our~~discretionary ~~offerings~~consumer ~~and~~spending tocould ~~user~~have ~~satisfaction.~~an Weadverse ~~devote~~effect ~~significant~~on ~~resources~~our tobusiness, ~~network~~financial ~~and~~condition, ~~data~~results ~~security to~~of ~~protect~~operations ~~our systems~~ and ~~data. However~~prospects,” our ~~systems~~business may ~~not~~ be ~~adequately~~affected ~~designed~~by ~~with~~reductions ~~the~~in ~~necessary~~consumer ~~reliability~~spending ~~and~~from ~~redundancy~~ time to ~~avoid~~time ~~performance~~as ~~delays~~a orresult ~~outages~~of ~~that~~a ~~could~~number beof ~~harmful~~factors towhich ~~our~~may ~~business.~~be Wedifficult ~~cannot assure you that the measures we take~~ to ~~prevent~~ orpredict. ~~hinder~~This ~~cyber-attacks~~may ~~and~~result ~~protect~~in ~~our~~decreased ~~systems~~revenue levels, ~~data~~ and ~~user~~we ~~information~~may ~~and~~be tounable ~~prevent outages, data or information loss, fraud and~~ to ~~prevent~~adopt ormeasures ~~detect~~in ~~security breaches, including~~ a ~~disaster~~timely ~~recovery~~manner ~~strategy~~to ~~for~~compensate ~~server and equipment failure and back-office systems and the use of third parties~~ for ~~certain~~any ~~cybersecurity~~unexpected ~~services,~~shortfall ~~will~~in ~~provide~~income. ~~absolute~~This ~~security.~~inability Wecould ~~have experienced,~~cause ~~and~~our weoperating ~~may~~results in ~~the~~a ~~future~~given ~~experience,~~quarter ~~website disruptions, outages and other performance problems due~~ to abe ~~variety of~~higher ~~factors, including infrastructure changes, human~~ or ~~software~~lower ~~errors~~than ~~and capacity constraints~~expected. ~~Such~~If ~~disruptions~~actual ~~have~~results ~~not~~differ ~~had a material impact on us; however, future disruptions~~ from ~~unauthorized~~our ~~access to~~estimates, ~~fraudulent~~analysts ~~manipulation~~may ~~of,~~react ornegatively ~~tampering~~and ~~with~~ our ~~computer~~stock ~~systems~~price ~~and technological infrastructure, or those of third parties,~~ could ~~result~~be ~~in a wide range of negative outcomes, each of which could~~ materially ~~adversely affect our business, financial condition, results of operations and prospects~~impacted.

~~Additionally,~~We ~~our products~~have ~~may~~a ~~contain~~new ~~errors,~~business ~~bugs~~model, ~~flaws~~which ormakes ~~corrupted~~it ~~data,~~difficult ~~and~~for ~~these~~us ~~defects may only become apparent after their launch. If a particular product offering is unavailable when users attempt~~ to ~~access~~forecast ~~it or navigation through~~ our ~~offerings~~financial ~~is slower than they expect~~results, ~~users~~creates ~~may~~uncertainty beas ~~unable~~ to ~~place~~how ~~their~~investors ~~bets~~will orevaluate ~~set their line-ups in time and may be less likely to return to~~ our ~~products and services as often~~prospects, ~~if at all. Furthermore, programming errors, defects~~ and ~~data~~increases ~~corruption could disrupt our operations, adversely affect~~ the ~~experience~~risk ofthat ~~our~~we ~~users,~~will ~~harm~~not ~~our~~be reputation, cause our users to stop utilizing our offerings, divert our resources and delay market acceptance of our offerings, any of which could result in legal liability to us or harm our business, financial condition, results of operations and prospectssuccessful.

IfDraftKings ~~our~~was ~~user~~incorporated ~~base and~~in ~~engagement~~2011 ~~continue~~and tobegan ~~grow,~~offering ~~and~~ the ~~amount~~DFS ~~and~~products ~~types~~in of2012. ~~offerings~~DraftKings ~~continue~~expanded tofrom ~~grow~~its ~~and~~DFS ~~evolve,~~product weoffering ~~will~~to ~~need~~include anSportsbook ~~increasing amount of technical infrastructure, including network capacity~~ and ~~computing~~iGaming ~~power,~~product toofferings ~~continue~~in to2018. ~~satisfy~~Following ~~our~~the ~~users’~~consummation ~~needs. Such~~of ~~infrastructure~~the ~~expansion~~Business ~~may be complex~~Combination, ~~and~~we ~~unanticipated~~have ~~delays~~a innew ~~completing~~business ~~these~~model ~~projects~~and ornew ~~availability~~offerings, ofincluding ~~components may~~sports ~~lead~~betting totechnology. ~~increased project costs~~Accordingly, ~~operational~~it ~~inefficiencies,~~will orbe ~~interruptions~~difficult infor ~~the~~us ~~delivery~~to orforecast ~~degradation of the quality of~~ our ~~offerings.~~future Infinancial ~~addition~~results, ~~there~~and ~~may~~it will be ~~issues~~uncertain ~~related~~how toour ~~this~~new ~~infrastructure~~business ~~that~~model ~~are~~will ~~not~~affect ~~identified~~investors’ ~~during~~perceptions ~~the~~and ~~testing~~expectations ~~phases~~ of ~~design~~our ~~and~~prospects. ~~implementation~~Additionally, ~~which~~as ~~may~~the only ~~become~~vertically ~~evident~~integrated ~~after~~U.S.-based wesports ~~have~~betting ~~started~~and toonline ~~fully~~gaming ~~use the underlying equipment or software~~company, ~~that~~ ~~could~~it ~~further~~may ~~degrade~~be ~~the~~difficult ~~user~~for ~~experience~~investors orto ~~increase~~evaluate our ~~costs.~~business Asdue ~~such, we could fail~~ to ~~continue~~the tolack ~~effectively~~of ~~scale and~~similarly ~~grow~~situated ~~our technical infrastructure to accommodate increased demands~~competitors. ~~In addition~~Furthermore, our new business model may not be ~~subject~~successful. toYou ~~interruptions, delays~~should ornot ~~failures~~rely ~~resulting~~upon ~~from~~our ~~adverse~~historical ~~weather~~financial ~~conditions,~~results ~~other~~as ~~natural~~indicators ~~disasters,~~of ~~power~~our ~~loss,~~future ~~terrorism,~~financial ~~cyber-attacks~~performance, ~~public health~~and ~~emergencies~~our ~~(such~~financial asresults ~~the~~and ~~coronavirus)~~stock orprice ~~other~~may ~~catastrophic~~be ~~events~~volatile.

WeDraftKings ~~believe~~has ~~that if our users have~~ a ~~negative~~history ~~experience~~of ~~with our~~losses ~~offerings,~~and orwe ~~if our brand or reputation is negatively affected, users~~ may ~~be less inclined to~~ continue ~~or resume utilizing our products or~~ to ~~recommend~~incur ~~our~~losses ~~offerings to other potential users. As such, a failure or significant interruption~~ in ~~our~~the ~~service could harm our reputation, business and operating results~~future.

20Since DraftKings was incorporated in 2011, it has experienced net losses and negative cash flows from operations. We experienced net losses in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) of $1,523.2 million and $1,231.8 million in the years ended December 31, 2021 and 2020, respectively. We may continue to experience losses in the future, and we cannot assure you that we will achieve profitability. We may continue to incur significant losses in future periods. We expect our operating expenses to increase in the future as we expand our operations. Furthermore, as a public company, we have incurred and expect to continue to incur additional legal, accounting and other expenses that Old DK did not incur as a private company. If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve or maintain profitability. We may incur significant losses in the future for many reasons, including those described in the other risks and uncertainties described in this Annual Report. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in losses in future periods. If our expenses exceed our revenue, our business may be negatively impacted and we may never achieve or maintain profitability.

~~Despite~~Our ~~our~~results ~~security~~of ~~measures,~~operations ~~our information technology and infrastructure~~ may befluctuate ~~vulnerable to attacks by hackers or breached~~ due to ~~employee~~seasonality ~~error,~~and ~~malfeasance or~~ other ~~disruptions.~~factors ~~Any such breach could compromise our networks~~ and ~~the information stored there could be accessed~~, ~~publicly disclosed~~therefore, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of our ~~operations and~~periodic ~~the~~operating ~~services~~results wewill ~~provide~~not tobe ~~users,~~guarantees ~~damage to our reputation, and a loss~~ of ~~confidence~~future ~~in our products and services, which could adversely affect our business~~performance.

~~The~~Our ~~secure~~DFS ~~maintenance~~ and ~~transmission~~Sportsbook ofoperations ~~user~~may ~~information is~~fluctuate adue ~~critical~~to ~~element~~seasonal oftrends ~~our~~and ~~operations~~other factors. ~~Our~~We ~~information~~believe ~~technology~~that ~~and~~significant ~~other~~sporting ~~systems~~events ~~that~~such ~~maintain~~as ~~and~~the ~~transmit~~playoffs ~~user~~and ~~information~~championship games, or ~~those~~tend ofto ~~service providers~~impact, ~~business~~among ~~partners~~other orthings, ~~employee~~revenues ~~information~~from ~~may~~operations, bekey ~~compromised~~metrics byand acustomer ~~malicious~~activity, ~~third-~~and ~~party~~as ~~penetration of~~such, ~~our~~DraftKings’ ~~network~~historical ~~security,~~revenues orgenerally ~~that~~have ofbeen ahighest ~~third-party~~in ~~service~~the ~~provider~~fourth orquarter ~~business~~when ~~partner,~~most orof ~~impacted~~those bygames ~~intentional~~occur. orA ~~unintentional actions~~majority orof ~~inactions~~our bycurrent ~~our~~sports ~~employees,~~betting orand ~~those~~DFS ofrevenue ais ~~third-~~and ~~party~~will ~~service~~continue ~~provider~~to orbe ~~business~~generated ~~partner.~~from Asbets aplaced ~~result~~on, ~~our~~or ~~users’ information~~contests ~~may~~relating ~~be lost~~to, ~~disclosed,~~the ~~accessed~~National orFootball ~~taken~~League ~~without~~and ~~our~~the ~~users’~~National ~~consent.~~Basketball ~~We have experienced cyber-attacks~~Association, ~~attempts to~~each ~~breach~~of ~~our~~which ~~systems~~have ~~and~~their ~~other~~own ~~similar~~respective ~~incidents~~off-seasons, inwhich ~~the~~may ~~past.~~cause ~~For~~decreases ~~example,~~in weour ~~have~~future ~~been~~revenues ~~and~~during ~~expect~~such ~~that~~periods. weOur ~~will~~revenues ~~continue~~may toalso be ~~subject~~ toaffected ~~attempts~~by tothe ~~gain~~scheduling ~~unauthorized~~of ~~access~~major tosporting orevents ~~through~~that ~~our~~do ~~information~~not ~~systems~~occur orannually, ~~those~~such weas ~~develop~~the ~~for~~World ~~our customers~~Cup, ~~whether by~~or ~~our~~the ~~employees~~cancellation or ~~third~~postponement ~~parties,~~of ~~including~~sporting ~~cyber-attacks~~events byand ~~computer~~races, ~~programmers~~such ~~and~~as ~~hackers~~the ~~who~~postponement ~~may~~of ~~develop~~the ~~and~~2020 ~~deploy~~Summer ~~viruses, worms~~Olympic orGames ~~other~~that ~~malicious~~took ~~software~~place ~~programs.~~this Topast ~~date~~summer. ~~these~~In ~~attacks~~addition, ~~have~~certain ~~not~~individuals ~~had~~or ateams ~~material~~advancing ~~impact~~or onfailing ~~our~~to ~~operations~~advance orand ~~financial results,~~their ~~but~~scores weand ~~cannot~~other ~~provide~~results ~~assurance~~within ~~that~~specific ~~they~~tournaments, ~~will~~games ~~not~~or ~~have~~events amay ~~material~~ impact inour ~~the~~financial ~~future~~performance.

WeThe ~~rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information~~success, ~~including~~ credit card numbers. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites are often attacked through compromised credentials, including ~~those obtained~~win ~~through phishing and credential stuffing. Our security measures, and those of our third-party service providers, may not detect~~ or ~~prevent~~hold ~~all attempts to breach our systems~~rates, ~~denial-~~of~~-service~~ ~~attacks,~~existing ~~viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches~~ or ~~other~~future ~~attacks~~sports ~~and~~betting ~~similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, networks~~ and ~~systems~~iGaming orproducts ~~that~~depends weon ora ~~such~~variety third parties otherwise maintain, including payment card systems, which may subject us to fines or higher transaction fees or limit or terminate our access to certain payment methods. We and such third parties may not anticipate or prevent all types of ~~attacks~~factors ~~until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently~~ and ~~may~~is not becompletely ~~known~~controlled ~~until~~by ~~launched against~~ us ~~or our third-party service providers~~.

InThe ~~addition,~~Sportsbook ~~security breaches~~and ~~can~~iGaming ~~also~~industries ~~occur~~are ascharacterized ~~a result of non-technical issues, including intentional or inadvertent breaches~~ by ~~our~~an ~~employees~~element ~~or by~~of ~~third parties~~chance. ~~These~~Accordingly, ~~risks may increase over time as the complexity and number of technical systems and applications~~ we ~~use also~~employ ~~increases.~~theoretical ~~Breaches~~win ofrates ~~our security measures or those of our third-party service providers or cybersecurity incidents could result in unauthorized access~~ to ~~our~~estimate ~~sites,~~what ~~networks~~a ~~and~~certain ~~systems;~~type ~~unauthorized access to and misappropriation~~ of ~~user~~sports ~~information, including~~bet ~~users’ personally identifiable information,~~ or ~~other confidential or proprietary information of ourselves or third parties; viruses~~iGame, ~~worms,~~on ~~spyware or other malware being served from our sites~~average, ~~networks~~will orwin ~~systems; deletion~~ or ~~modification~~lose ~~of content~~in or the ~~display~~long of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation, regulatory action and other potential liabilitiesrun. InNet ~~the~~win ~~past,~~is weimpacted ~~have~~by ~~experienced~~variations ~~social engineering, phishing, malware and similar attacks and threats of denial-of-service attacks, none of which to date has been material to our business; however, such attacks could~~ in the ~~future~~hold ~~have~~percentage a(the ~~material~~ratio ~~adverse effect on our operations. If any~~ of ~~these~~net ~~breaches~~win ~~of security should occur and be material, our reputation and brand could be damaged, our business may suffer, we could be required~~ to ~~expend~~total ~~significant~~amount ~~capital and other resources to alleviate problems caused by such breaches~~wagered), ~~and we could be exposed to a risk of loss, litigation~~ or ~~regulatory~~actual action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costsoutcome, ~~including~~on costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. While we maintain cybersecurity insurance coverage that we believe is adequate for our ~~business,~~iGames ~~such coverage may not cover all potential costs and expenses associated with cybersecurity incidents that may occur in the future.~~

In addition, any party who is able to illicitly obtain a user’s password could access the user’s transaction data or personal information, resulting in the perception that our systems are insecure. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We continue to devote significant resources to protect against security breaches or we may need to in the future to address problems caused by breaches, including notifying affected subscribers and responding to any resulting litigation, which in turn, diverts resources from the growth and expansion of our business.18

21 and sports betting we offer to our users. We use the hold percentage as an indicator of an iGame’s or sports bet’s performance against its expected outcome. Although each iGame or sports bet generally performs within a defined statistical range of outcomes, actual outcomes may vary for any given period. In addition to the element of chance, win rates (hold percentages) may also (depending on the game involved) be affected by the spread of limits and factors that are beyond our control, such as a user’s skill, experience and behavior, the mix of games played, the financial resources of users, the volume of bets placed and the amount of time spent gambling. As a result of the variability in these factors, the actual win rates on our online iGames and sports bets may differ from the theoretical win rates we have estimated and could result in the winnings of our iGame’s or sports bet’s users exceeding those anticipated. The variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows.

WeOur ~~rely~~success onalso ~~Amazon~~depends ~~Web~~in ~~Services~~part on our ability to ~~deliver~~ anticipate and satisfy user preferences in a timely manner. As we will operate in a dynamic environment characterized by rapidly changing industry and legal standards, our products will be subject to changing consumer preferences that cannot be predicted with certainty. We will need to continually introduce new offerings and identify future product offerings that complement our existing technology, respond to our users,’ needs and ~~any~~improve ~~disruption~~and ofenhance orour ~~interference~~existing ~~with~~technology to maintain or increase our ~~use~~user engagement and growth of ~~Amazon~~our ~~Web~~business. ~~Services~~We ~~could~~may ~~adversely~~not ~~affect~~ be able to compete effectively unless our ~~business,~~product ~~financial~~selection ~~condition,~~keeps ~~results~~up ofwith ~~operations~~trends in the digital sports entertainment and ~~prospects~~gaming industries in which we compete, or trends in new gaming products.

We ~~currently~~rely ~~host our~~on ~~sports~~information ~~betting,~~technology ~~iGaming~~ and ~~daily~~other ~~fantasy~~systems ~~sports offerings~~ and ~~support our operations using Amazon Web Services (“AWS”), a third-party provider of cloud infrastructure~~ services, ~~along~~and ~~with~~any ~~other service providers traditionally used by SBT. We do not~~failures, ~~and~~ ~~will not~~errors, ~~have~~defects ~~control over the operations of the facilities~~ or ~~infrastructure~~disruptions ofin ~~the~~our ~~third-party~~systems ~~service providers that we use. Such third parties’ facilities are vulnerable to damage~~ or ~~interruption~~services ~~from~~could ~~natural~~diminish ~~disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct. Our technology’s continuing and uninterrupted performance will be critical to~~ our ~~success.~~brand ~~We have experienced,~~ and ~~we expect that in the future we will experience~~reputation, ~~interruptions, delays~~subject ~~and~~us ~~outages in service and availability from these third-party service providers from time~~ to ~~time due to a variety of factors~~liability, ~~including~~ ~~infrastructure~~disrupt ~~changes,~~our ~~human or software errors~~business, ~~website hosting disruptions and capacity constraints. In addition, any changes in these third parties’ service levels may adversely~~ affect our ability to ~~meet~~scale ~~the requirements of~~ our ~~users. Since~~technical ~~our~~infrastructure ~~technology’s continuing~~ and ~~uninterrupted~~adversely ~~performance~~affect ~~is critical to~~ our ~~success,~~operating ~~sustained~~results orand ~~repeated~~growth ~~system failures would reduce the attractiveness of our offerings~~prospects. ItOur ~~may~~games ~~become~~and ~~increasingly~~other ~~difficult~~software toapplications ~~maintain~~ and ~~improve our performance~~systems, ~~especially~~ ~~during peak usage times, as we expand~~ and the ~~usage~~third-party ofplatforms ~~our~~upon ~~offerings~~which ~~increases.~~they ~~Any~~are ~~negative~~made ~~publicity~~available ~~arising from these disruptions~~ could ~~harm~~contain ~~our~~undetected ~~reputation and brand and may adversely affect the usage of our offerings~~errors.

Our ~~commercial~~technology ~~agreement with~~infrastructure ~~AWS~~is ~~will~~critical ~~remain~~to inthe ~~effect~~performance ~~until~~of ~~terminated~~our byofferings ~~AWS~~and orto ususer satisfaction. ~~AWS~~We ~~may~~devote ~~only~~significant ~~terminate~~resources ~~the~~to ~~agreement~~network ~~for~~and ~~convenience~~data ~~after~~security ~~complying~~ to protect our systems and data. However, our systems may not be adequately designed with the ~~contractual~~necessary 30reliability ~~day~~and ~~prior~~redundancy ~~notice~~to ~~requirement,~~avoid ~~except~~performance ~~for~~delays ~~extraordinary~~or ~~circumstances~~outages asthat ~~laid~~could ~~out~~be inharmful ~~AWS~~to ~~standard~~our ~~terms~~business. ~~AWS~~ ~~may~~We ~~also~~cannot ~~terminate~~assure you that the ~~agreement~~measures ~~for~~we ~~cause~~take ~~upon~~to aprevent ~~breach~~or ofhinder ~~the~~cyber-attacks ~~agreement~~and orprotect ~~for~~our ~~failure~~systems, todata ~~pay~~and ~~amounts~~user ~~due~~information and to prevent outages, indata ~~each~~or ~~case~~information loss, ~~subject~~ fraud and to ~~AWS~~prevent ~~providing~~or ~~prior~~detect ~~written~~security ~~notice~~breaches, ~~and~~including a ~~30-day~~disaster ~~cure~~recovery ~~period.~~strategy Infor ~~the~~server ~~event~~and ~~that~~equipment ~~our~~failure ~~agreement~~and ~~with~~back-office ~~AWS~~systems isand ~~terminated or~~the weuse ~~add~~of ~~additional~~third ~~cloud~~parties ~~infrastructure~~for ~~service~~certain ~~providers~~cybersecurity services, ~~such~~will asprovide ~~the~~absolute ~~one~~security. ~~currently~~We ~~used~~have ~~by SBT~~experienced, and we may in the future experience, ~~significant costs~~website ordisruptions, ~~downtime~~outages inand ~~connection~~other ~~with~~performance ~~the~~problems ~~transfer~~due to, ora ~~the~~variety ~~addition~~ of factors, ~~new~~including ~~cloud~~ infrastructure ~~service~~changes, ~~providers~~human or software errors and capacity constraints. ~~Although alternative~~Such ~~providers~~disruptions ~~could~~have ~~host~~not ~~our~~had ~~offerings~~a material impact on aus; ~~substantially~~however, ~~similar~~future ~~basis~~disruptions from unauthorized access to, ~~AWS~~fraudulent manipulation of, ~~transitioning~~or ~~the~~tampering ~~cloud~~with ~~infrastructure currently~~our ~~hosted~~computer bysystems ~~AWS~~and totechnological ~~alternative~~infrastructure, ~~providers~~or those of third parties, could ~~potentially~~result bein ~~disruptive~~a ~~and~~wide werange of negative outcomes, each of which could ~~incur~~materially ~~significant~~adversely ~~one-time~~affect ~~costs~~our business, financial condition, results of operations and prospects.

~~Any~~Additionally, ofour ~~the~~products ~~above~~may ~~circumstances~~ contain errors, bugs, flaws or ~~events~~corrupted data, and these defects may ~~harm~~only become apparent after their launch. If a particular product offering is unavailable when users attempt to access it or navigation through our ~~reputation~~offerings ~~and~~is ~~brand~~slower than they expect, ~~reduce~~users ~~the~~may ~~availability~~be unable to place their bets or ~~usage~~set oftheir line-ups in time and may be less likely to return to our ~~technology~~products and services as often, ~~lead~~if toat aall. ~~significant~~Furthermore, ~~loss~~programming ~~of revenue~~errors, ~~increase~~defects and data corruption could disrupt our ~~costs~~operations, ~~and~~adversely ~~impair~~affect the experience of our ~~ability~~users, toharm ~~attract~~our ~~new~~reputation, cause our users to stop utilizing our offerings, divert our resources and delay market acceptance of our offerings, any of which could ~~adversely~~result ~~affect~~in legal liability to us or harm our business, financial condition, ~~and~~ results of operations and prospects.

WeIf ~~rely~~our onuser ~~third-party~~base ~~providers~~ and engagement continue to ~~validate~~grow, and the ~~identity~~amount and ~~identify~~types ~~the~~of ~~location~~offerings continue to grow and evolve, we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy our users’ needs. Such infrastructure expansion may be complex, and ifunanticipated ~~such~~delays ~~providers~~in ~~fail~~completing these projects or availability of components may lead to ~~perform~~increased ~~adequately~~project costs, ~~provide~~operational ~~accurate information~~inefficiencies, or weinterruptions doin the delivery or degradation of the quality of our offerings. In addition, there may be issues related to this infrastructure that are not ~~maintain~~identified ~~business~~during ~~relationships~~the ~~with~~testing ~~them~~phases of design and implementation, which may only become evident after we have started to fully use the underlying equipment or software, that could further degrade the user experience or increase our ~~business~~costs. As such, ~~financial~~we ~~condition~~could fail to continue to effectively scale and ~~results~~grow ofour ~~operations could~~technical infrastructure to accommodate increased demands. In addition, our business may be ~~adversely~~subject ~~affected~~to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cyber-attacks, public health emergencies (such as the coronavirus) or other catastrophic events.

~~There~~We isbelieve ~~no guarantee~~ that ~~the~~if ~~third-party geolocation and identity verification systems that we rely on will perform adequately, or be effective. We rely on~~ our ~~geolocation~~users ~~and~~have ~~identity~~a ~~verification~~negative ~~systems~~experience ~~to ensure we are in compliance~~ with ~~certain laws and regulations, and any service disruption to those systems would prohibit us from operating~~ our offerings, ~~and~~or ~~would~~if ~~adversely affect~~ our ~~business. Additionally,~~brand ~~incorrect~~ or ~~misleading~~reputation ~~geolocation~~is ~~and~~negatively ~~identity~~affected, ~~verification data with respect to current or potential~~ users ~~received from third-party service providers~~ may ~~result in us inadvertently allowing access to our offerings to individuals who should not~~ be ~~permitted~~less toinclined ~~access them, or otherwise inadvertently deny access~~ to ~~individuals~~continue ~~who should be able to access our offerings, in each case based on inaccurate identity~~ or ~~geographic~~resume ~~location~~utilizing determination. Our third-party geolocation services provider relies on its ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and other sources. Changes, disruptions or temporary or permanent failure to access such sources by our ~~third-party~~products ~~services providers may result in their inability to accurately determine the location of our users. Moreover, our inability to maintain our existing contracts with third-party services providers,~~ or to ~~replace~~recommend ~~them with equivalent third parties, may result in~~ our ~~inability~~offerings to ~~access~~other geolocation and identity verification data necessary for our day-to-day operations. If any of these risks materializes, we may be subject to disciplinary action, fines, lawsuits, and our business, financial condition and results of operations could be adversely affected.

22 19

~~Our~~potential ~~technology~~users. ~~contains~~As ~~third-party open source software components~~such, ~~and~~a failure toor ~~comply~~significant ~~with~~interruption ~~the~~in ~~terms~~our ofservice ~~the underlying open source software licenses~~ could ~~restrict~~ harm our ~~ability~~reputation, tobusiness ~~provide~~and ~~our~~operating ~~offerings~~results.

~~Our~~Despite our security measures, our information technology ~~contains software~~and ~~modules~~infrastructure ~~licensed~~may be vulnerable to usattacks by ~~third-party~~hackers ~~authors~~or ~~under~~breached ~~“open~~due ~~source”~~to ~~licenses.~~employee ~~Use~~error, ~~and~~malfeasance ~~distribution~~or ofother ~~open~~disruptions. ~~source software~~Any ~~may~~such ~~entail~~breach ~~greater~~could ~~risks~~compromise ~~than~~our ~~use~~networks ofand ~~third-party~~the ~~commercial~~information ~~software~~stored there could be accessed, aspublicly ~~open~~disclosed, ~~source~~lost ~~licensors~~or ~~generally~~stolen. doAny ~~not~~such ~~provide support~~access, ~~warranties,~~disclosure ~~indemnification~~ or other ~~contractual~~loss ~~protections~~of ~~regarding~~information ~~infringement~~could result in legal claims or proceedings, liability under laws that protect the ~~quality~~privacy of ~~the~~personal ~~code. In~~information, ~~addition~~and regulatory penalties, disruption of our operations and the ~~public~~services ~~availability~~we provide to users, damage to our reputation, and a loss of ~~such~~confidence ~~software~~in ~~may~~our ~~make~~products itand ~~easier~~services, ~~for~~which ~~others~~could toadversely ~~compromise~~affect our ~~technology~~business.

~~Some~~The ~~open~~secure ~~source~~maintenance ~~licenses contain~~and ~~requirements~~transmission of user information is a critical element of our operations. Our information technology and other systems that wemaintain ~~make~~and ~~available~~transmit ~~source~~user ~~code~~information, ~~for~~or ~~modifications~~those of service providers, business partners or ~~derivative~~employee ~~works~~information wemay ~~create~~be ~~based~~compromised ~~upon~~by ~~the~~a ~~type~~malicious third- party penetration of ~~open~~ ~~source~~our ~~software~~network wesecurity, ~~use~~or that of a third-party service provider or business partner, or ~~grant~~impacted ~~other~~by ~~licenses~~intentional toor unintentional actions or inaction by our ~~intellectual~~employees, ~~property~~or those of a third- party service provider or business partner. IfAs wea ~~combine~~result, our ~~proprietary~~users’ ~~software~~information ~~with open~~may ~~source~~be ~~software~~lost, disclosed, accessed or taken without our users’ consent. We have experienced cyber-attacks, attempts to breach our systems and other similar incidents in athe ~~certain~~past. ~~manner~~For example, we ~~could,~~have ~~under~~been ~~certain~~and ~~open~~expect ~~source~~that ~~licenses,~~we will continue to be ~~required~~subject to ~~release~~attempts ~~the~~to ~~source~~gain ~~code of~~unauthorized access to or through our ~~proprietary~~information ~~software~~systems toor ~~the~~those ~~public.~~we ~~This~~develop ~~would~~for ~~allow~~our customers, whether by our ~~competitors~~employees toor ~~create~~third ~~similar~~parties, ~~offerings~~including ~~with~~cyber-attacks ~~lower~~by ~~development effort~~computer programmers and ~~time~~hackers ~~and~~who ~~ultimately~~may ~~could~~develop ~~result~~and indeploy aviruses, ~~loss~~worms ofor ~~our~~other ~~competitive~~malicious ~~advantages~~software programs. ~~Alternatively,~~To todate ~~avoid~~these ~~the~~attacks ~~public~~have ~~release of~~not ~~the~~had ~~affected~~a ~~portions~~material ofimpact on our ~~source~~operations ~~code,~~or wefinancial ~~could~~results, bebut ~~required~~we tocannot ~~expend~~provide ~~substantial~~assurance ~~time~~that ~~and~~they ~~resources~~will tonot ~~re-engineer~~have ~~some or~~a ~~all~~material ofimpact ~~our~~in ~~software~~the future.

~~Although~~We werely ~~monitor our~~on ~~use~~encryption ofand ~~open~~authentication ~~source~~technology ~~software~~licensed tofrom ~~avoid~~third ~~subjecting~~parties ~~our~~in ~~technology~~an effort to ~~conditions~~securely wetransmit doconfidential ~~not~~and ~~intend~~sensitive information, ~~the~~including ~~terms~~credit ofcard ~~many~~numbers. ~~open~~Advances ~~source licenses~~in ~~have~~computer ~~not~~capabilities, ~~been~~new ~~interpreted~~technological bydiscoveries ~~U.S.~~ or ~~foreign~~other ~~courts,~~developments ~~and~~may ~~there~~result isin athe ~~risk~~whole ~~that~~or ~~these~~partial ~~licenses~~failure ~~could~~of bethis ~~construed~~technology into aprotect ~~way that~~transaction ~~could~~data ~~impose~~or ~~unanticipated~~other ~~conditions~~confidential orand ~~restrictions~~sensitive oninformation ~~our~~from ~~ability~~being tobreached ~~provide~~ or ~~distribute our technology~~compromised. ~~From~~In ~~time to time~~addition, ~~there~~websites ~~have~~are ~~been~~often ~~claims~~attacked ~~challenging~~through ~~the~~compromised ~~ownership~~credentials, ofincluding ~~open~~those ~~source~~obtained ~~software~~through ~~against~~phishing ~~companies~~and ~~that~~credential ~~incorporate open source software into their solutions~~stuffing. AsOur asecurity ~~result~~measures, weand ~~could~~those beof ~~subject~~our tothird-party ~~lawsuits~~service byproviders, ~~parties~~may ~~claiming~~not ~~ownership~~detect ofor ~~what~~prevent weall ~~believe~~attempts to bebreach ~~open source~~our ~~software. Moreover~~systems, wedenial-of-service ~~cannot~~attacks, ~~assure~~viruses, ~~you~~malicious ~~that~~software, ~~our~~break-ins, ~~processes~~phishing ~~for~~attacks, ~~controlling~~social ~~our~~engineering, ~~use~~security ofbreaches ~~open~~or ~~source~~other ~~software~~attacks inand ~~our~~similar ~~technology will~~disruptions bethat ~~effective.~~may Ifjeopardize wethe ~~are~~security ~~held~~of toinformation ~~have~~stored ~~breached~~in or ~~failed~~transmitted toby ~~fully~~our ~~comply~~websites, ~~with~~networks ~~all the terms~~ and ~~conditions~~systems ofor anthat ~~open~~we ~~source software~~or ~~license,~~such wethird ~~could~~parties ~~face~~otherwise ~~infringement~~maintain, orincluding ~~other~~payment ~~liability~~card systems, orwhich bemay ~~required~~subject us to ~~seek~~fines ~~costly~~or ~~licenses~~higher ~~from~~transaction ~~third~~fees ~~parties~~or tolimit ~~continue providing~~or terminate our ~~offerings~~access onto ~~terms~~certain ~~that~~payment ~~are~~methods. ~~not~~We ~~economically~~and ~~feasible,~~such tothird ~~re-engineer~~parties ~~our~~may ~~technology,~~not toanticipate ~~discontinue~~ or ~~delay~~prevent ~~the provision~~all types of ~~our~~attacks ~~offerings~~until ifafter ~~re-engineering~~they ~~could~~have ~~not~~already bebeen ~~accomplished~~launched. onFurther, atechniques ~~timely~~used ~~basis or~~ to ~~make~~obtain ~~generally~~unauthorized ~~available,~~access into ~~source code~~or ~~form,~~sabotage ~~our~~systems ~~proprietary~~change ~~code,~~frequently ~~any~~and ofmay ~~which~~not ~~could~~be ~~adversely~~known ~~affect~~until ~~our~~launched ~~business,~~against ~~financial~~us ~~condition~~or ~~and~~our ~~results~~third-party ofservice ~~operations~~providers.

WeIn ~~rely~~addition, onsecurity breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by third parties. These risks may increase over time as the complexity and number of technical systems and applications we use also increases. Breaches of our security measures or those of our third-party ~~payment~~service ~~processors~~ providers or cybersecurity incidents could result in unauthorized access to ~~process~~our ~~deposits~~sites, networks and ~~withdrawals~~systems; ~~made~~unauthorized byaccess ~~our~~to and misappropriation of user information, including users’ personally identifiable information, ~~and~~or ifother weconfidential ~~cannot~~or ~~manage~~proprietary ~~our~~information ~~relationships~~of ~~with~~ourselves ~~such~~or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation, regulatory action and other ~~payment~~ potential liabilities. In the past, we have experienced social engineering, phishing, malware and similar attacks and threats of denial-~~related~~of-service ~~risks~~attacks, none of which to date has been material to our business; however, ~~financial~~such ~~condition~~attacks ~~and~~could ~~results~~in ofthe future have a material adverse effect on our operations. If any of these breaches of security should occur and be material, our reputation and brand could be ~~adversely~~damaged, ~~affected~~our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants. While we maintain cybersecurity insurance coverage that we believe is adequate for our business, such coverage may not cover all potential costs and expenses associated with cybersecurity incidents that may occur in the future.

WeIn ~~rely~~addition, ~~on a limited number of third-party payment processors to process deposits and withdrawals made by our users. If~~ any ~~of our third-~~party ~~payment processors~~who ~~terminates~~is ~~its~~able ~~relationship with us or refuses~~ to ~~renew~~illicitly ~~its~~obtain ~~agreement~~a ~~with~~user’s uspassword oncould ~~commercially~~access ~~reasonable~~the ~~terms,~~user’s wetransaction ~~would need~~data toor ~~find~~personal ~~an alternate payment processor~~information, ~~and~~resulting ~~may not be able to secure similar terms or replace such payment processor~~ in ~~an acceptable time frame. Further,~~ the ~~software~~perception ~~and~~that ~~services~~our ~~provided~~systems byare ~~our~~insecure. ~~third-party~~Any ~~payment~~compromise ~~processors~~or ~~may~~breach ~~not~~of ~~meet~~ our ~~expectations, contain~~security ~~errors or vulnerabilities~~measures, ~~be compromised~~ or ~~experience~~those ~~outages. Any~~ of ~~these risks could cause us to lose~~ our ~~ability to~~third-party ~~accept~~service ~~online payments or other payment transactions or make timely payments to our users~~providers, ~~any of which~~ could ~~make~~violate ~~our~~applicable ~~technology less~~privacy, ~~trustworthy~~data ~~and~~protection, ~~convenient~~data ~~and~~security, ~~adversely~~network ~~affect our ability to attract~~ and ~~retain our users.~~

Nearly all of our payments are made by credit card, debit card or through other third-party payment services, which subjects us to certain regulations and to the risk of fraud. We may in the future offer new payment options to users that may be subject to additional regulations and risks. We are also subject to a number of other laws and regulations relating to the payments we accept from our users, including with respect to money laundering, money transfers, privacy and information security. If we fail to comply with applicable rules and regulations, we may be subject to civil or criminal penalties, fines and/or higher transaction fees and may lose our ability to accept online payments or other payment card transactions, which could make our offerings less convenient and attractive to our users. If any of these events were to occur, our business, financial condition and results of operations could be adversely affected.20

~~For~~information ~~example,~~systems ifsecurity weand ~~are~~other ~~deemed to be a money transmitter as defined by applicable regulation, we could be subject to certain~~ laws, ~~rules~~ and ~~regulations~~cause ~~enforced~~significant bylegal ~~multiple authorities~~ and ~~governing~~ ~~bodies~~financial inexposure, ~~the~~adverse ~~United~~publicity ~~States~~ and ~~numerous~~a ~~state~~loss ~~and~~of ~~local~~confidence ~~agencies~~in ~~who~~our ~~may~~security ~~define money transmitter differently. For example~~measures, ~~certain~~ ~~states~~which ~~may~~could have a ~~more~~material ~~expansive~~adverse ~~view~~effect ofon ~~who~~our ~~qualifies as a money transmitter. Additionally~~business, ~~outside~~financial ~~of the United States~~condition, we ~~could~~results ~~be subject to additional laws, rules and regulations related to the provision~~ of ~~payments~~operations and ~~financial~~prospects. ~~services, and~~We ifcontinue ~~we expand into new jurisdictions, the foreign regulations and regulators governing our business that we are subject~~ to ~~will expand~~devote assignificant ~~well.~~resources ~~If we are found~~ to beprotect aagainst ~~money~~security ~~transmitter~~breaches ~~under~~or ~~any applicable regulation and~~ we ~~are not in compliance with such regulations, we~~ may beneed ~~subject~~ to ~~fines or other penalties~~ in ~~one~~the orfuture ~~more~~to ~~jurisdictions~~address ~~levied~~problems caused by ~~federal or state or local regulators~~breaches, including ~~state~~notifying ~~Attorneys~~affected ~~General,~~subscribers asand ~~well~~responding asto ~~those~~any ~~levied~~resulting bylitigation, ~~foreign~~which ~~regulators.~~in ~~In addition to fines~~turn, ~~penalties~~diverts ~~for~~resources ~~failing~~from ~~to comply~~the ~~with~~growth ~~applicable rules~~ and ~~regulations~~expansion ~~could include criminal and civil proceedings, forfeiture~~ of ~~significant assets or other enforcement actions. We could also be required to make changes to~~ our business ~~practices or compliance programs as a result of regulatory scrutiny~~.

23 We rely on Amazon Web Services to deliver our offerings to users, and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, results of operations and prospects.

~~Additionally~~We currently host our sports betting, iGaming and daily fantasy sports offerings and support our ~~payment~~ ~~processors~~operations ~~require~~using usAmazon toWeb ~~comply~~Services ~~with~~(“AWS”), ~~payment~~a ~~card~~third-party ~~network~~provider ~~operating~~of ~~rules~~cloud infrastructure services, ~~which~~along ~~are~~with ~~set~~other ~~and~~service ~~interpreted~~providers traditionally used by SBT. We do not, and will not, have control over the ~~payment card~~operations ~~networks~~of the facilities or infrastructure of the third-party service providers that we use. ~~The~~Such ~~payment~~third ~~card~~parties’ ~~networks~~facilities ~~could~~are ~~adopt~~vulnerable ~~new~~to ~~operating~~damage ~~rules~~ or ~~interpret~~interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or ~~reinterpret~~acts ~~existing~~of ~~rules in ways~~misconduct. Our technology’s continuing and uninterrupted performance will be critical to our success. We have experienced, and we expect that ~~might~~in ~~prohibit~~the usfuture we will experience, interruptions, delays and outages in service and availability from ~~providing~~these ~~certain~~third-party ~~offerings~~service providers from time to ~~some~~time ~~users~~due to a variety of factors, beincluding ~~costly~~infrastructure tochanges, ~~implement~~human or ~~difficult~~software toerrors, ~~follow~~website hosting disruptions and capacity constraints. WeIn ~~have agreed~~addition, any changes in these third parties’ service levels may adversely affect our ability to ~~reimburse~~meet the requirements of our ~~payment~~users. ~~processors~~Since ~~for~~our ~~fines~~technology’s ~~they~~continuing ~~are~~and ~~assessed~~uninterrupted byperformance ~~payment~~is ~~card~~critical ~~networks~~to ifour wesuccess, sustained or repeated system failures would reduce the attractiveness of our ~~users~~offerings. ~~violate~~It ~~these rules~~may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand and the usage of our offerings increases. Any ofnegative ~~the~~publicity ~~foregoing~~arising ~~risks~~from ~~could~~these ~~adversely~~disruptions ~~affect~~could harm our ~~business,~~reputation ~~financial~~and ~~condition~~brand and ~~results~~may adversely affect the usage of ~~operations~~our offerings.

WeOur ~~rely~~commercial onagreement ~~other~~with ~~third-party~~AWS ~~sports data~~will ~~providers~~remain in effect until terminated by AWS or us. AWS may only terminate the agreement for ~~real-time~~convenience ~~and~~after ~~accurate~~complying ~~data~~with the contractual 30 day prior notice requirement, except for ~~sporting~~extraordinary ~~events~~circumstances as laid out in AWS standard terms. AWS may also terminate the agreement for cause upon a breach of the agreement or for failure to pay amounts due, in each case, subject to AWS providing prior written notice and ifa 30-day cure period. In the event that our agreement with AWS is terminated or we add additional cloud infrastructure service providers, such ~~third~~as ~~parties~~the doone ~~not~~currently ~~perform~~used ~~adequately~~by SBT, we may experience significant costs or ~~terminate their~~downtime ~~relationships~~in connection with usthe transfer to, ~~our~~or ~~costs~~the ~~may~~addition ~~increase~~of, ~~and~~new cloud infrastructure service providers. Although alternative providers could host our ~~business~~offerings on a substantially similar basis to AWS, ~~financial~~transitioning ~~condition~~the ~~and~~cloud ~~results~~infrastructure ofcurrently ~~operations~~hosted by AWS to alternative providers could potentially be ~~adversely affected~~disruptive and we could incur significant one-time costs.

WeAny ~~rely on third-party sports data providers such as SportRadar and BetGenius to obtain accurate information regarding schedules, results, performance and outcomes~~ of ~~sporting~~the ~~events.~~above Wecircumstances ~~rely on this data to determine when and how bets are settled~~ or ~~how~~events ~~users~~may ~~rank~~harm inour ~~their~~reputation ~~fantasy contests. We have experienced,~~ and ~~may continue to experience~~brand, ~~errors~~reduce inthe ~~this~~availability ~~data feed which may result in us incorrectly settling bets~~ or ~~ranking~~usage ~~users~~of ~~in their contests. If we cannot adequately resolve the issue with~~ our ~~users~~technology, ~~our~~lead ~~users~~to ~~may have~~ a ~~negative experience~~significant ~~with~~loss ~~our~~of ~~offerings~~revenue, increase our ~~brand~~costs ~~or reputation may be negatively affected~~ and ~~our~~impair ~~users may be less inclined to continue or resume utilizing~~ our ~~products~~ability ~~or recommend our offerings~~ to ~~other~~attract ~~potential~~new users~~. As such~~, aany ~~failure~~of orwhich ~~significant~~could ~~interruption in~~adversely ~~our~~affect ~~service may harm~~ our ~~reputation~~business, ~~business~~financial condition and ~~operating~~ results of operations.

~~Furthermore,~~We ifrely ~~any of~~on ~~our~~third-party ~~sports~~providers ~~data partners terminates its relationship with us or refuses~~ to ~~renew~~validate ~~its~~the ~~agreement~~identity ~~with~~and usidentify onthe ~~commercially~~location ~~reasonable terms,~~of weour ~~would need to find an alternate provider~~users, and ~~may~~if ~~not~~such beproviders ~~able~~fail to ~~secure~~perform ~~similar~~adequately, ~~terms~~provide oraccurate ~~replace~~information ~~such~~or ~~providers~~we indo ~~an acceptable~~not ~~time~~maintain ~~frame.~~business ~~Any~~relationships ofwith ~~these~~them, ~~risks could increase~~ our ~~costs and adversely affect our~~ business, financial condition and results of operations. ~~Further, any negative publicity related to any of our third-party partners, including any publicity related to regulatory concerns,~~ could be adversely ~~affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure~~affected.

There is no guarantee that the third-party geolocation and identity verification systems that we rely on will perform adequately, or be effective. We rely on ~~other~~our geolocation and identity verification systems to ensure we are in compliance with certain laws and regulations, and any service disruption to those systems would prohibit us from operating our offerings, and would adversely affect our business. Additionally, incorrect or misleading geolocation and identity verification data with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our offerings to individuals who should not be permitted to access them, or otherwise inadvertently deny access to individuals who should be able to access our offerings, in each case based on inaccurate identity or geographic location determination. Our third-party geolocation services provider relies on its ability to obtain information necessary to determine geolocation from mobile devices, operating systems, and ifother sources. Changes, disruptions or temporary or permanent failure to access such sources by our third-party ~~parties~~services doproviders ~~not~~may ~~perform~~result ~~adequately~~in their inability to accurately determine the location of our users. Moreover, our inability to maintain our existing contracts with third-party services providers, or ~~terminate~~to ~~their~~replace ~~relationships~~them with usequivalent third parties, may result in our ~~costs~~inability to access geolocation and identity verification data necessary for our day-to-day operations. If any of these risks materializes, we may ~~increase~~ be subject to disciplinary action, fines, lawsuits, and our business, financial condition and results of operations could be adversely affected.

Our ~~success~~technology ~~depends in~~contains ~~part on our relationships with other~~ third-party ~~service~~open ~~providers.~~source ~~For~~software ~~example~~components, ~~we rely on third parties for content delivery, load balancing~~ and ~~protection~~failure against distributed denial-of-service attacks. If those providers do not perform adequately, our users may experience issues or interruptions with their experiences. Furthermore, if any of our partners terminates its relationship with us or refuses to ~~renew~~comply ~~its agreement~~ with usthe ~~on commercially reasonable~~ terms, weof ~~would~~the ~~need~~underlying toopen ~~find~~source ~~an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame. We also rely on other~~ software ~~and~~ ~~services~~licenses supplied by third parties, such as communications and internal software, and our business may be adversely affected to the extent such software and services do not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages. Any of these risks could ~~increase~~restrict our ~~costs~~ability ~~and adversely affect our business, financial condition and results of operations. Further, any negative publicity related~~ to ~~any~~provide of our third- party partners, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposureofferings.

We incorporate technology from third parties into our offerings. We cannot be certain that our licensors are not infringing the intellectual property rights of others or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. Some of our license agreements may be terminated by our licensors for convenience. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our offerings containing that technology could be severely limited and our business could be harmed.21

24 Our technology contains software modules licensed to us by third-party authors under “open source” licenses. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. In addition, the public availability of such software may make it easier for others to compromise our technology.

~~Additionally,~~Some if open source licenses contain requirements that we ~~are~~make ~~unable~~available tosource ~~obtain~~code ~~necessary~~for ~~technology~~modifications ~~from~~or ~~third~~derivative ~~parties,~~works we ~~may~~create bebased ~~forced~~upon tothe ~~acquire~~type orof ~~develop~~open ~~alternate~~source ~~technology~~software we use, ~~which~~ ~~may~~or ~~require~~grant ~~significant~~other ~~time~~licenses ~~and~~to ~~effort~~our ~~and~~intellectual ~~may~~property. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of ~~lower~~our ~~quality~~proprietary orsoftware ~~performance~~to ~~standards~~the public. This would ~~limit~~allow ~~and delay~~ our ~~ability~~competitors to ~~provide~~create ~~new~~similar orofferings ~~competitive~~with ~~offerings~~lower ~~and~~development ~~increase~~effort ~~our~~and ~~costs.~~time Ifand ~~alternate~~ultimately ~~technology~~could ~~cannot~~result bein ~~obtained~~a orloss ~~developed, we~~of ~~may~~our ~~not~~competitive beadvantages. ~~able~~Alternatively, to ~~offer~~avoid ~~certain~~the ~~functionality~~public asrelease ~~part~~of the affected portions of our ~~offerings~~source code, ~~which~~we could ~~adversely~~be ~~affect~~required ~~our~~to ~~business,~~expend ~~financial condition~~substantial time and ~~results~~resources to re-engineer some or all of ~~operations~~our software.

IfAlthough we ~~fail~~monitor our use of open source software to ~~detect~~avoid ~~fraud~~subjecting orour ~~theft~~technology to conditions we do not intend, ~~including~~ the terms of many open source licenses have not been interpreted by ~~our~~U.S. ~~users~~or ~~and~~foreign ~~employees~~courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ~~reputation~~ability ~~may~~to ~~suffer~~provide ~~which~~or distribute our technology. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As a result, we could ~~harm~~be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Moreover, we cannot assure you that our ~~brand~~processes ~~and~~for ~~reputation~~controlling our use of open source software in our technology will be effective. If we are held to have breached or failed to fully comply with all the terms and ~~negatively~~conditions ~~impact~~ of an open source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties to continue providing our ~~business~~offerings on terms that are not economically feasible, ~~financial~~to ~~condition~~re-engineer ~~and~~our ~~results~~technology, to discontinue or delay the provision of ~~operations~~our ~~and~~offerings ~~can~~if ~~subject~~re-engineering uscould not be accomplished on a timely basis or to ~~investigations~~make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and ~~litigation~~results of operations.

We ~~have~~rely inon ~~the~~third-party ~~past incurred,~~payment ~~and~~processors ~~may~~to inprocess ~~the~~deposits ~~future incur, losses from various types of financial fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by a user~~ and ~~attempted~~withdrawals ~~payments~~made by ~~users~~our ~~with insufficient funds. Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information~~users, ~~such as unauthorized use of another person’s identity, account information or payment information~~ and ~~unauthorized~~if ~~acquisition~~we orcannot ~~use~~manage ofour ~~credit~~relationships orwith ~~debit~~such ~~card~~third ~~details,~~parties ~~bank account information~~ and ~~mobile~~other ~~phone~~payment-related ~~numbers and accounts. Under current credit card practices~~risks, ~~we may be liable for use of funds on~~ our ~~products with fraudulent credit card data~~business, ~~even~~financial ifcondition ~~the~~and ~~associated~~results ~~financial~~of ~~institution~~operations ~~approved~~could ~~the~~be ~~credit~~adversely ~~card transaction~~affected.

~~Acts~~We ofrely ~~fraud~~on ~~may involve~~a ~~various~~limited ~~tactics,~~number ~~including~~of ~~collusion.~~third-party ~~Successful~~payment ~~exploitation~~processors ofto ~~our~~process ~~systems~~deposits ~~could~~and ~~have~~withdrawals ~~negative~~made ~~effects~~by on our ~~product offerings,~~users. ~~services~~If ~~and~~any ~~user~~of ~~experience~~our ~~and~~third-party ~~could~~payment ~~harm~~processors ~~our~~terminates ~~reputation.~~its ~~Failure~~relationship with us or refuses to ~~discover~~renew ~~such~~its ~~acts~~agreement orwith ~~schemes~~us inon acommercially ~~timely~~reasonable ~~manner could~~terms, ~~result~~we inwould ~~harm~~need to ~~our~~find ~~operations.~~an Inalternate ~~addition~~payment processor, ~~negative~~and ~~publicity~~may ~~related~~not be able to secure similar terms or replace such ~~schemes~~payment ~~could~~processor ~~have~~in an ~~adverse~~acceptable ~~effect~~time ~~on our~~frame. ~~reputation~~Further, ~~potentially~~the ~~causing~~software aand ~~material~~services ~~adverse~~provided ~~effect~~by onour third-party payment processors may not meet our ~~business~~expectations, ~~financial~~contain ~~condition~~errors or vulnerabilities, ~~results~~be ofcompromised ~~operations~~or ~~and~~experience ~~prospects~~outages. In ~~the~~Any ~~event~~ of ~~the~~these ~~occurrence~~risks ofcould ~~any~~cause ~~such~~us ~~issues~~to ~~with~~lose our ~~existing~~ability ~~technology~~to oraccept ~~product~~online ~~offerings,~~payments ~~substantial~~or ~~engineering~~other ~~and marketing~~payment ~~resources~~transactions ~~and~~or ~~management~~make ~~attention~~timely ~~may~~payments beto ~~diverted~~our ~~from~~users, ~~other~~any ~~projects~~of towhich ~~correct~~could ~~these~~make ~~issues,~~our ~~which~~technology ~~may~~less ~~delay~~trustworthy ~~other projects~~ and ~~the~~convenient ~~achievement~~and ofadversely affect our ~~strategic~~ability ~~objectives~~to attract and retain our users.

InNearly ~~addition,~~all ~~any misappropriation~~ of, orour ~~access~~payments toare made by credit card, ~~users’~~debit card or through other ~~proprietary~~third-party ~~information~~payment orservices, ~~other~~which ~~breach~~subjects ofus ~~our~~to ~~information~~certain ~~security~~regulations ~~could~~and ~~result~~to the risk of fraud. We may in ~~legal claims~~the orfuture ~~legal~~offer ~~proceedings,~~new ~~including~~payment ~~regulatory~~options ~~investigations~~to users that may be subject to additional regulations and ~~actions,~~risks. orWe ~~liability~~are ~~for~~also ~~failure~~subject to ~~comply~~a ~~with~~number ~~privacy~~of other laws and ~~information~~ ~~security~~regulations ~~laws~~relating to the payments we accept from our users, including ~~for~~with ~~failure~~respect to ~~protect~~money ~~personal~~laundering, money transfers, privacy and information orsecurity. ~~for~~If ~~misusing~~we ~~personal~~fail ~~information,~~to ~~which~~comply ~~could disrupt~~with ~~our~~applicable ~~operations~~rules and regulations, ~~force~~we usmay be subject to ~~modify~~civil ~~our~~or ~~business~~criminal ~~practices~~penalties, ~~damage~~fines ~~our~~and/or ~~reputation~~higher transaction fees and ~~expose~~may uslose toour ~~claims~~ability ~~from~~to ~~our~~accept ~~users, regulators,~~online ~~employees~~payments ~~and~~or other ~~persons,~~payment ~~any~~card oftransactions, which could ~~have~~make anour ~~adverse~~offerings ~~effect~~less onconvenient and attractive to our users. If any of these events were to occur, our business, financial condition, and results of operations ~~and~~could ~~prospects~~be adversely affected.

~~Despite~~For ~~measures~~example, if we ~~have~~are ~~taken~~deemed to ~~detect~~ be a money transmitter as defined by applicable regulation, we could be subject to certain laws, rules and ~~reduce~~regulations enforced by multiple authorities and governing bodies in the ~~occurrence~~United States and numerous state and local agencies who may define money transmitter differently. For example, certain states may have a more expansive view of ~~fraudulent~~who orqualifies ~~other~~as ~~malicious~~a ~~activity~~money ontransmitter. ~~our~~Additionally, ~~offerings~~outside of the United States, we ~~cannot~~could ~~guarantee~~be ~~that~~subject ~~any~~to additional laws, rules and regulations related to the provision of ~~our~~payments ~~measures will~~and befinancial ~~effective~~services, orand ~~will~~if ~~scale~~we ~~efficiently~~expand ~~with~~into new jurisdictions, the foreign regulations and regulators governing our business that we are subject to will expand as well. ~~Our~~If ~~failure~~we are found to ~~adequately~~be ~~detect~~a ormoney ~~prevent~~transmitter ~~fraudulent~~under ~~transactions could~~any ~~harm~~applicable ~~our~~regulation ~~reputation~~and orwe ~~brand~~are not in compliance with such regulations, ~~result~~we may be subject to fines or other penalties in ~~litigation~~one or ~~regulatory~~more ~~action~~jurisdictions ~~and~~levied ~~lead~~by tofederal ~~expenses~~or ~~that~~state ~~could~~or ~~adversely~~local ~~affect our~~regulators, ~~business~~including state Attorneys General, ~~financial~~as ~~condition~~well ~~and~~as ~~results~~those oflevied ~~operations~~by foreign regulators. In addition to fines, penalties for failing to comply with applicable

If Internet and other technology-based service providers experience service interruptions, our ability to conduct our business may be impaired and our business, financial condition and results of operations could be adversely affected.22

~~A substantial portion of our network infrastructure is provided by third parties, including Internet service providers~~ rules and ~~other~~regulations ~~technology-based service providers. See “— We rely on Amazon Web Services to deliver our offerings to users and any disruption of or interference with our use of Amazon Web Services~~ could ~~adversely~~include ~~affect~~criminal ~~our business, financial condition, results of operations~~ and ~~prospects.” We~~civil ~~require technology-based service providers to implement cyber-attack-resilient systems and processes. However~~proceedings, ifforfeiture ~~Internet service providers experience service interruptions, including because~~ of ~~cyber-attacks,~~significant orassets ~~due to an event causing an unusually high volume of Internet use (such as a pandemic~~ or ~~public health emergency), communications over the Internet may be interrupted and impair our ability to conduct our business. Internet service providers and~~ other ~~technology-based~~enforcement service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of our users to access our offerings in a timely fashion or at allactions. InWe ~~addition,~~could ~~our~~also ability to process e-commerce transactions depends on bank processing and credit card systems. To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support. Nevertheless, there can be norequired ~~assurance that the Internet infrastructure or our own network systems will continue~~ to bemake ~~able~~changes to ~~meet the demand placed on us by the continued growth of the Internet, the overall online gaming industry and~~ our ~~users. Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our~~ business, ~~and~~practices we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or ~~hardware failure,~~compliance ~~including~~programs as a result of ~~cyber-attacks,~~regulatory which causes a loss of our users’ property or personal information or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to our offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and cause users to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospectsscrutiny.

25Additionally, our payment processors require us to comply with payment card network operating rules, which are set and interpreted by the payment card networks. The payment card networks could adopt new operating rules or interpret or reinterpret existing rules in ways that might prohibit us from providing certain offerings to some users, be costly to implement or difficult to follow. We have agreed to reimburse our payment processors for fines they are assessed by payment card networks if we or our users violate these rules. Any of the foregoing risks could adversely affect our business, financial condition and results of operations.

We rely on ~~strategic~~other ~~relationships with~~third-party ~~casinos,~~sports ~~tribes~~data ~~and~~providers ~~horse~~for real-~~tracks~~time inand ~~order~~accurate todata befor ~~able~~sporting toevents, ~~offer~~and ~~our~~if ~~sports~~such ~~betting~~third ~~and~~parties ~~iGaming~~do ~~products~~not inperform ~~certain~~adequately ~~jurisdictions. If~~or weterminate ~~cannot~~their ~~establish~~relationships ~~and~~with ~~manage~~us, ~~such~~our ~~relationships~~costs ~~with~~may ~~such~~increase ~~partners,~~and our business, financial condition and results of operations could be adversely affected.

~~Under~~We ~~the~~rely ~~sports betting~~on ~~and~~third-party ~~iGaming~~sports ~~laws~~data ofproviders ~~certain~~such ~~states,~~as ~~online~~SportRadar ~~sports betting~~ and ~~iGaming~~BetGenius ~~are limited~~ to aobtain ~~finite~~accurate ~~number~~information ofregarding ~~retail operators~~schedules, ~~such as casinos~~results, ~~tribes~~performance orand ~~tracks,~~outcomes ~~who~~of ~~own~~sporting ~~a “skin” or “skins” under that state’s law~~events. AWe ~~“skin”~~rely ison athis ~~legally-authorized~~data ~~license~~to ~~from~~determine awhen ~~state~~and tohow ~~offer~~bets ~~online~~are ~~sports~~settled ~~betting~~ or ~~iGaming~~how ~~services provided~~users byrank ~~such a retail operator. The “skin” provides a market access opportunity for mobile operators to operate~~ in ~~the~~their ~~jurisdiction~~fantasy ~~pending licensure and other required approvals by the state’s regulator~~contests. ~~The~~We ~~entities~~have ~~that control those “skins~~experienced,” and ~~the~~may ~~numbers~~continue ofto ~~“skins” available~~experience, ~~are~~errors ~~typically~~in ~~determined~~this bydata ~~a state’s~~feed ~~law~~which ~~authorizing~~may ~~sports~~result ~~betting~~in orus ~~iGaming.~~incorrectly Insettling ~~most~~bets ofor ~~the~~ranking ~~jurisdictions~~users in ~~which~~their wecontests. ~~offer~~If ~~sports~~we ~~betting~~cannot ~~and iGaming,~~adequately weresolve ~~currently~~the ~~rely~~issue onwith aour ~~casino~~users, ~~tribe~~our orusers ~~track~~may inhave ~~order~~a tonegative ~~get~~experience awith ~~“skin.”~~our ~~These~~offerings, ~~“skins”~~our ~~are what~~brand ~~allows~~or usreputation tomay ~~gain~~be ~~access~~negatively toaffected ~~jurisdictions~~and ~~where~~our ~~online~~users ~~operators~~may ~~are~~be ~~required~~less inclined to ~~have~~continue aor ~~retail~~resume ~~relationship.~~utilizing Ifour ~~we cannot~~products ~~establish, renew~~ or ~~manage~~recommend our ~~relationships,~~offerings ~~our~~to ~~relationships~~other ~~could~~potential ~~terminate~~users. ~~and~~As wesuch, ~~would~~a ~~not~~failure beor ~~allowed~~significant tointerruption ~~operate~~ in ~~those~~our ~~jurisdictions~~service ~~until~~may weharm ~~enter~~our ~~into new ones. As a result~~reputation, ~~our~~ business, ~~financial condition~~ and ~~results~~operating ~~of operations could be adversely affected~~results.

~~Our~~Furthermore, ~~growth~~if ~~will~~any ~~depend~~of our sports data partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, inwe ~~part~~would need to find an alternate provider, on ~~the~~and ~~success~~may not be able to secure similar terms or replace such providers in an acceptable time frame. Any of these risks could increase our ~~strategic~~costs ~~relationships~~and ~~with~~adversely ~~third~~affect ~~parties.~~our ~~Overreliance~~business, onfinancial ~~certain~~condition ~~third~~and ~~parties~~results of operations. Further, orany ~~our~~negative ~~inability~~publicity related to ~~extend existing~~any ~~relationships~~of orour ~~agree~~third-party partners, including any publicity related to ~~new~~regulatory ~~relationships~~concerns, ~~may~~could ~~cause~~adversely ~~unanticipated~~affect ~~costs~~our ~~for~~reputation usand brand, and ~~impact~~could ~~our~~potentially ~~financial~~lead ~~performance in~~to ~~the~~increased ~~future~~regulatory or litigation exposure.

We rely on ~~relationships with sports leagues and teams, professional athletes and athlete organizations, advertisers, casinos and~~ other third-party ~~parties~~service ~~in order to attract users to our offerings. These relationships along with~~ providers ~~of online services, search engines, social media, directories~~ and ~~other~~if ~~websites~~such and ecommerce businesses direct consumers to our offerings. In addition, many of the parties with whom we have advertising arrangements provide advertising services to other companies, including other fantasy sports and gaming products with whom we compete. While we believe there are other third parties ~~that~~do ~~could~~not ~~drive~~perform ~~users~~adequately ~~to our offerings, adding~~ or ~~transitioning~~ toterminate ~~them~~their ~~may disrupt our business and increase our costs. In the event that any of our existing~~ relationships ~~or our future relationships fails to provide services to us in accordance~~ with ~~the terms of our arrangement~~us, ~~or at all, and we are not able to find suitable alternatives, this could impact~~ our ~~ability~~costs tomay ~~attract~~increase ~~consumers cost effectively~~ and ~~harm~~ our business, financial condition, and results of operations ~~and~~could ~~prospects~~be adversely affected.

Our ~~growth~~success ~~prospects~~depends ~~may~~in ~~suffer~~part ~~if we~~on ~~are~~our ~~unable~~relationships towith ~~develop~~other ~~successful~~third-party ~~offerings~~service orproviders. ifFor example, we ~~fail~~rely toon ~~pursue~~third ~~additional~~parties ~~offerings~~for content delivery, load balancing and protection against distributed denial-of-service attacks. InIf ~~addition~~those providers do not perform adequately, our users may experience issues or interruptions with their experiences. Furthermore, if any of our partners terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we ~~fail~~would need to ~~make~~find ~~the right~~an ~~investment~~alternate ~~decisions~~provider, and may not be able to secure similar terms or replace such providers in ~~our~~an ~~offerings~~acceptable time frame. We also rely on other software and ~~technology~~services supplied by third parties, wesuch as communications and internal software, and our business may ~~not~~be ~~attract~~adversely affected to the extent such software and ~~retain~~services ~~key~~do ~~users~~not meet our expectations, contain errors or vulnerabilities, are compromised or experience outages. Any of these risks could increase our costs and adversely affect our ~~revenue~~business, financial condition and results of operations. ~~may~~Further, ~~decline~~any negative publicity related to any of our third- party partners, including any publicity related to regulatory concerns, could adversely affect our reputation and brand, and could potentially lead to increased regulatory or litigation exposure.

~~DraftKings~~We ~~was~~incorporate ~~founded in~~technology ~~2011~~from ~~with~~third aparties ~~singular~~into ~~focus~~our onofferings. We cannot be certain that our licensors are not infringing the ~~DFS~~intellectual ~~industry~~property ~~and~~rights ~~initially~~of ~~focused~~others ~~its~~or ~~efforts~~that onthe ~~growing~~suppliers and licensors have sufficient rights to the ~~DFS~~technology ~~product~~in ~~offering~~all jurisdictions in which we may operate. InSome ~~2018, DraftKings~~of ~~expanded~~our ~~its~~license ~~product~~agreements ~~offerings~~may tobe ~~include~~terminated ~~its~~by ~~Sportsbook~~our ~~and~~licensors ~~iGaming~~for ~~offerings~~convenience. ~~DraftKings~~If ~~has~~we ~~rapidly~~are ~~expanded~~unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we ~~anticipate~~are ~~expanding~~unable ~~further~~to ascontinue to obtain the technology or enter into new ~~product~~agreements on commercially reasonable terms, our ability to develop our offerings ~~mature~~containing ~~and~~that astechnology wecould ~~pursue~~be severely limited and our ~~growth~~business ~~strategies~~could be harmed.

~~The~~Additionally, ~~industries~~if ~~in which~~ we ~~operate~~ are ~~subject~~unable to ~~rapid~~obtain ~~and~~necessary ~~frequent~~technology ~~changes~~from inthird ~~standards~~parties, ~~technologies,~~we ~~products~~may ~~and~~be ~~service~~forced ~~offerings,~~to asacquire ~~well as~~or indevelop ~~customer~~alternate ~~demands~~technology, ~~and expectations and regulations. We must continuously make decisions regarding in~~ which ~~offerings~~may ~~and~~require ~~technology we~~significant ~~should~~time ~~invest to meet customer demand in compliance with evolving industry standards~~ and ~~regulatory~~effort ~~requirements~~ and ~~must~~may ~~continually introduce~~be ~~and~~of ~~successfully~~lower ~~market~~quality ~~new~~or ~~and~~performance ~~innovative technologies, offerings and enhancements to remain competitive and effectively stimulate customer demand, acceptance and engagement~~standards. ~~Our~~This ~~ability~~would tolimit ~~engage, retain,~~ and ~~increase~~delay our ~~user base and to increase our revenue will depend heavily on our~~ ability to ~~successfully~~provide ~~create~~ new ~~offerings,~~or ~~both~~competitive ~~independently~~offerings and ~~together~~increase ~~with~~our ~~third parties~~costs. WeIf ~~may~~alternate ~~introduce significant changes to our existing~~ technology ~~and~~cannot ~~offerings~~be obtained or ~~develop and introduce new and unproven products and services~~developed, ~~with which~~ we ~~have little or no prior development or operating experience. The process of developing new offerings and systems is inherently complex and uncertain, and new offerings~~ may not be ~~well~~able ~~received~~to byoffer ~~users,~~certain ~~even~~functionality ifas ~~well-reviewed and~~part of ~~high quality. If we are unable to develop technology and products that address users’ needs or enhance and improve~~ our ~~existing technology and~~ offerings ~~in a timely manner~~, ~~that~~which could ~~have~~adversely aaffect ~~material adverse effect on~~ our business, financial condition, and results of operations ~~and prospects~~.

26 23

~~Although~~If we ~~intend~~ ~~to continue investing in our research and development efforts, if new or enhanced offerings~~ fail to ~~engage~~detect ~~our~~fraud ~~users~~ or ~~partners~~theft, weincluding ~~may~~by ~~fail~~our ~~to attract or retain~~ users orand ~~to generate sufficient revenue~~employees, ~~operating margin, or other value to justify~~ our ~~investments,~~reputation ~~any~~may ofsuffer which ~~may~~could ~~seriously~~ harm our ~~business.~~brand ~~In addition, management may not properly ascertain or assess the risks of new initiatives,~~ and ~~subsequent~~reputation events may alter the risks that were evaluated at the time we decided to execute any new initiative. Creating additional offerings can also divert our management’s attention from other business issues and opportunities. Even if our new offerings attain market acceptance, those new offerings could exploit the market share of our existing product offerings or share of our users’ wallets in a manner that could negatively impact ~~their~~ ~~ecosystem. Furthermore, such expansion of~~ our business ~~increases the complexity of our business and places an additional burden on our management~~, ~~operations, technical systems and~~ financial ~~resources~~condition and weresults ~~may not recover the often-substantial up-front costs~~ of ~~developing and marketing new offerings, or recover the opportunity cost of diverting management and financial resources away from other offerings. In the event of continued growth of our~~ operations, ~~products or in the number of third-party relationships, we may not have adequate resources, operationally, technologically or otherwise to support such growth~~ and ~~the~~can ~~quality~~subject ofus ~~our technology, offerings or our relationships with third parties could suffer. In addition, failure~~ to ~~effectively~~investigations ~~identify, pursue~~ and execute new business initiatives, or to efficiently adapt our processes and infrastructure to meet the needs of our innovations, may adversely affect our business, financial condition, results of operations and prospectslitigation.

~~Any~~We ~~new~~have ~~offerings may~~in ~~also~~the ~~require~~past ~~our~~incurred, ~~users~~and tomay ~~utilize~~in ~~new~~the ~~skills~~future toincur, ~~use~~losses ~~our~~from ~~offerings.~~various ~~This~~types ~~could~~of ~~create~~financial afraud, ~~lag~~including inuse ~~adoption~~ of ~~new~~stolen ~~offerings~~or ~~and new~~fraudulent ~~user~~credit ~~additions~~card ~~related to any new offerings. To date~~data, ~~new~~claims ~~offerings and enhancements~~ of ~~our~~unauthorized ~~existing~~payments ~~technology~~by ~~have~~a ~~not hindered our~~ user ~~growth~~and orattempted ~~engagement,~~payments ~~but~~by ~~that~~users ~~may~~with beinsufficient ~~the~~funds. ~~result~~Bad ofactors ause ~~large~~increasingly ~~portion~~sophisticated ofmethods ~~our~~to ~~user~~engage ~~base being~~ in aillegal ~~younger~~activities ~~demographic~~involving ~~and more~~personal ~~willing~~information, tosuch ~~invest~~as ~~the~~unauthorized ~~time to learn to~~ use ~~our~~of ~~products~~another ~~most~~person’s ~~effectively.~~identity, Toaccount ~~the~~information ~~extent~~or ~~that~~payment ~~future~~information ~~users,~~and ~~including~~unauthorized ~~those in~~acquisition ~~older~~or ~~demographics,~~use ~~are~~of ~~less~~credit ~~willing~~or todebit ~~invest~~card ~~the~~details, ~~time~~bank toaccount ~~learn~~information toand ~~use~~mobile ~~our~~phone ~~products,~~numbers and ifaccounts. weUnder ~~are~~current ~~unable~~credit tocard ~~make~~practices, ~~our~~we ~~products easier~~may tobe ~~learn~~liable tofor use, ~~our~~of ~~user~~funds ~~growth~~on ~~or engagement could be affected, and~~ our ~~business~~products ~~could~~with befraudulent ~~harmed.~~credit Wecard ~~may~~data, ~~develop~~even ~~new~~if ~~products that~~the ~~increase~~associated ~~user~~financial ~~engagement~~institution ~~and~~approved ~~costs~~the ~~without~~credit ~~increasing~~card ~~revenue~~transaction.

~~Additionally,~~Acts weof fraud may ~~make~~ ~~bad~~involve orvarious ~~unprofitable~~tactics, ~~decisions~~including ~~regarding~~collusion. ~~these~~Successful ~~investments.~~exploitation Ifof ~~new~~our orsystems ~~existing~~could ~~competitors~~have ~~offer~~negative ~~more~~effects ~~attractive~~on our product offerings, we ~~may~~services ~~lose~~and ~~users~~user experience and could harm our reputation. Failure to discover such acts or ~~users~~schemes ~~may~~in ~~decrease~~a ~~their~~timely ~~spending~~manner oncould result in harm to our ~~offerings~~operations. ~~New~~In ~~customer demands~~addition, ~~superior~~negative ~~competitive~~publicity ~~offerings, new~~related ~~industry~~to ~~standards~~such orschemes ~~changes~~could inhave ~~the~~an ~~regulatory~~adverse ~~environment~~effect ~~could~~on ~~render~~our reputation, potentially causing a material adverse effect on our ~~existing~~business, ~~offerings~~financial ~~unattractive~~condition, ~~unmarketable or~~results ~~obsolete~~of operations and ~~require~~prospects. usIn tothe ~~make~~event ~~substantial~~of ~~unanticipated~~the ~~changes~~occurrence toof any such issues with our existing technology or ~~business~~product ~~model.~~offerings, ~~Our~~substantial ~~failure~~engineering toand ~~adapt to~~marketing aresources ~~rapidly~~and ~~changing~~management ~~market~~attention ormay ~~evolving~~be ~~customer~~diverted ~~demands~~from ~~could~~other ~~harm~~projects ~~our~~to ~~business,~~correct ~~financial~~these ~~condition~~issues, ~~results~~which ofmay ~~operations~~delay other projects and ~~prospects~~ the achievement of our strategic objectives.

~~Our~~In ~~growth~~addition, ~~will~~any ~~depend~~misappropriation onof, ~~our~~or ~~ability~~ access to, ~~attract~~users’ ~~and~~or ~~retain~~other ~~users,~~proprietary ~~and~~information ~~the~~or ~~loss~~other breach of our ~~users~~information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to ~~attract~~comply ~~new~~with ~~users~~privacy inand ainformation ~~cost-effective~~security ~~manner~~laws, orincluding for failure to ~~effectively~~ ~~manage~~protect personal information or for misusing personal information, which could disrupt our ~~growth~~operations, force us to modify our business practices, damage our reputation and expose us to claims from our users, regulators, employees and other persons, any of which could ~~adversely~~have ~~affect~~an adverse effect on our business, financial condition, results of operations and prospects.

~~Our~~Despite ~~ability~~measures towe ~~achieve growth~~have intaken ~~revenue in the future will depend, in large part, upon our ability~~ to ~~attract~~detect ~~new users to our offerings, retain existing users of our offerings~~ and ~~reactivate~~reduce ~~users~~the inoccurrence ~~a cost-effective manner. Achieving growth in our community~~ of ~~users~~fraudulent ~~may~~or ~~require us~~other tomalicious ~~increasingly~~activity ~~engage in sophisticated and costly sales and marketing efforts, which may not make sense in terms of return~~ on ~~investment. We have used and expect to continue to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve~~ our ~~objectives. For paid marketing~~offerings, we ~~intend~~cannot toguarantee ~~leverage~~that aany ~~broad array~~ of ~~advertising~~our ~~channels, including~~measures ~~television,~~will ~~radio,~~be ~~social~~effective media platforms, such as Facebook, Instagram, Twitter and Snap, affiliates and paid and organic search, and other digital channels, such as mobile display. If the search engines on which we rely modify their algorithms, change their terms around gaming, or ifwill ~~the~~scale ~~prices~~efficiently atwith ~~which we may purchase listings increase, then~~ our ~~costs could increase, and fewer users may click through to our website~~business. IfOur ~~links~~failure to ~~our~~adequately ~~website~~detect ~~are~~or ~~not~~prevent ~~displayed~~fraudulent ~~prominently~~transactions incould ~~online~~harm ~~search results, if fewer users click through to~~ our ~~website,~~reputation ifor ~~our other digital marketing campaigns are not effective~~brand, ofresult itin ~~the~~litigation ~~costs~~or ofregulatory ~~attracting users~~action ~~using~~and ~~any~~lead ~~of our current methods significantly increase, then our ability~~ to ~~efficiently~~expenses ~~attract~~that ~~new users~~ could beadversely ~~reduced, our~~affect ~~revenue could decline and~~ our business, financial condition and results of operations ~~could be harmed~~.

InIf ~~addition,~~Internet ~~our~~and ~~ability to~~other ~~increase~~technology-based ~~the~~service ~~number~~providers ofexperience ~~users~~service ofinterruptions, our ~~offerings~~ability ~~will~~to ~~depend~~conduct onour ~~continued~~business ~~user~~may ~~adoption~~be ofimpaired ~~DFS, Sportsbook~~ and ~~iGaming.~~our ~~Growth in the DFS~~business, ~~Sportsbook~~financial ~~and~~condition ~~iGaming industries~~ and ~~the~~results ~~level~~ of ~~demand~~operations ~~for~~could ~~and market acceptance of our product offerings will~~ be ~~subject~~ toadversely ~~a high degree of uncertainty~~affected. ~~We cannot assure that consumer adoption of our product offerings will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.~~

27 A substantial portion of our network infrastructure is provided by third parties, including Internet service providers and other technology-based service providers. See “— We rely on Amazon Web Services to deliver our offerings to users and any disruption of or interference with our use of Amazon Web Services could adversely affect our business, financial condition, results of operations and prospects.” We require technology-based service providers to implement cyber-attack-resilient systems and processes. However, if Internet service providers experience service interruptions, including because of cyber-attacks, or due to an event causing an unusually high volume of Internet use (such as a pandemic or public health emergency), communications over the Internet may be interrupted and impair our ability to conduct our business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of our users to access our offerings in a timely fashion or at all. In addition, our ability to process e-commerce transactions depends on bank processing and credit card systems. To prepare for system problems, we continuously seek to strengthen and enhance our current facilities and the capabilities of our system infrastructure and support. Nevertheless, there can be no assurance that the Internet infrastructure or our own network systems will continue to be able to meet the demand placed on us by the continued growth of the Internet, the overall online gaming industry and our users. Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (i.e., lack of net neutrality), may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of our users’ property or personal information or a delay or interruption in our online services and products and e-commerce services, including our ability to handle existing or increased traffic, could result in a loss of anticipated revenue, interruptions to our offerings, cause us to incur significant legal, remediation and notification costs, degrade the customer experience and cause users to lose confidence in our offerings, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Additionally, as technological or regulatory standards change and we modify our offerings to comply with those standards, we may need users to take certain actions to continue playing, such as performing age verification checks or accepting new terms and conditions. Users may stop using our offerings at any time, including if the quality of the user experience, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the customer experience generally offered by competitive offerings.24

~~Our~~We ~~core~~rely ~~values~~on ofstrategic ~~focusing~~relationships onwith casinos, tribes and horse-tracks in order to be able to offer our ~~users~~ ~~first~~sports betting and ~~acting~~iGaming ~~for~~products ~~the~~in ~~long~~certain ~~term~~jurisdictions. ~~may~~If ~~conflict~~we ~~with~~cannot ~~the~~establish ~~short-term~~and ~~interests~~manage ofsuch relationships with such partners, our business, financial condition and results of operations could be adversely affected.

~~One~~Under the sports betting and iGaming laws of ~~our~~certain ~~operating principles~~states, isonline sports betting and iGaming are limited to ~~put~~a ~~our~~finite ~~users~~number ~~first~~of retail operators, ~~which~~such weas ~~believe~~casinos, tribes or tracks, who own a “skin” or “skins” under that state’s law. A “skin” is ~~essential~~a legally-authorized license from a state to ~~our~~offer ~~success~~online sports betting or iGaming services provided by such a retail operator. The “skin” provides a market access opportunity for mobile operators to operate in the jurisdiction pending licensure and ~~serves~~other required approvals by the ~~best~~state’s regulator. The entities that control those “skins,” ~~long-term~~and ~~interests~~the numbers of ~~our~~ ~~company~~“skins” ~~and~~available, ~~our~~are ~~stakeholders~~typically determined by a state’s law authorizing sports betting or iGaming. ~~Therefore,~~In wemost ~~have~~of ~~made~~the jurisdictions in ~~the~~which ~~past~~we offer sports betting and iGaming, we ~~may~~currently ~~make~~rely inon ~~the~~a ~~future~~casino, ~~certain~~tribe ~~investments~~ or ~~changes~~ track in ~~strategy~~order ~~that~~to get a “skin.” These “skins” are what allows us to gain access to jurisdictions where online operators are required to have a retail relationship. If we ~~think~~cannot ~~will~~establish, ~~benefit~~renew or manage our ~~users~~relationships, ~~even~~our ifrelationships ~~our~~could ~~decision~~terminate ~~negatively~~and ~~impacts~~we would not be allowed to operate in those jurisdictions until we enter into new ones. As a result, our ~~operating~~business, financial condition and results inof ~~the~~operations ~~short~~could ~~term~~be adversely affected.

Our ~~business~~growth ~~model~~will ~~depends~~depend, ~~upon the~~in ~~continued~~part, ~~compatibility~~on ~~between our app and~~ the ~~major~~success ~~mobile~~of ~~operating~~our ~~systems~~strategic ~~and~~relationships ~~upon~~with third~~-party~~ ~~platforms~~parties. ~~for~~Overreliance ~~the~~on ~~distribution of~~certain ~~our~~third ~~product~~parties, ~~offerings. If Google Play~~ or ~~the~~our ~~Apple~~inability ~~App~~to ~~Store~~extend ~~prevent~~existing ~~users~~relationships ~~from downloading our apps~~ or ~~block~~agree ~~advertising from being delivered~~ to ~~our~~new ~~users,~~relationships ~~our~~may ~~ability~~cause tounanticipated ~~grow~~costs ~~our~~for ~~revenue,~~us ~~profitability~~ and ~~prospects~~impact ~~may~~our befinancial ~~adversely~~performance ~~affected~~in the future.

~~The~~We ~~substantial~~rely ~~majority of~~on ~~our~~relationships ~~users~~with ~~access~~sports ~~our~~leagues ~~DFS, Sportsbook~~ and ~~iGaming~~teams, ~~product~~professional ~~offerings~~athletes ~~primarily~~and onathlete ~~mobile~~organizations, ~~devices~~advertisers, casinos and weother ~~believe~~third ~~that~~parties ~~this~~in ~~will continue~~order to beattract ~~increasingly~~users ~~important~~ to our ~~long-term success~~offerings. ~~Our~~These ~~business~~relationships ~~model~~along ~~depends~~with ~~upon~~providers ~~the~~of ~~continued~~online ~~compatibility~~services, ~~between our~~search ~~app~~engines, social media, directories and ~~the~~other ~~major~~websites ~~mobile~~and ~~operating~~e-commerce ~~systems~~businesses direct consumers to our offerings. ~~Third~~In addition, many of the parties with whom we dohave ~~not~~advertising ~~have~~arrangements ~~any~~provide ~~formal~~advertising ~~relationships~~services ~~control~~to ~~the~~other ~~design of~~companies, ~~mobile~~including ~~devices~~other fantasy sports and ~~operating~~gaming ~~systems~~products with whom we compete. ~~These~~While we believe there are other third parties ~~frequently~~that ~~introduce~~could ~~new~~drive ~~devices~~users to our offerings, adding or transitioning to them may disrupt our business and ~~from~~increase ~~time~~our costs. In the event that any of our existing relationships or our future relationships fails to ~~time~~provide ~~they~~services ~~may~~to ~~introduce new~~us ~~operating~~in ~~systems~~accordance with the terms of our arrangement, or ~~modify~~at ~~existing~~all, ~~ones.~~and ~~Network~~we ~~carriers~~are ~~may~~not ~~also~~able to find suitable alternatives, this could impact ~~the~~our ability to ~~download~~attract ~~apps~~consumers orcost ~~access~~effectively ~~specified content~~and onharm ~~mobile~~our ~~devices~~business, financial condition, results of operations and prospects.

InOur ~~addition,~~growth weprospects ~~rely upon~~may ~~third-party~~suffer ~~platforms~~if ~~for~~we ~~distribution~~are ofunable ~~our~~to ~~product~~develop ~~offerings.~~successful The DFS product offering is delivered as a free application through both the Apple App Store and the Google Play Store and is also accessible via mobile and traditional websites. The Sportsbook and iGaming product offerings ~~are~~or ~~primarily~~if ~~distributed~~we ~~through~~fail ~~the~~to ~~Apple~~pursue ~~App~~additional ~~Store and a traditional website~~offerings. ~~The~~In ~~Google~~addition, ~~Play store~~if ~~and~~we ~~Apple~~fail ~~App~~to ~~Store~~make ~~are global application distribution platforms and~~ the ~~main~~right ~~distribution~~investment ~~channels~~decisions ~~for~~in our ~~app.~~offerings ~~As such, the promotion, distribution~~ and ~~operation of our app are subject to the respective distribution platforms’ standard terms and policies for application developers~~technology, ~~which~~we ~~are very broad and subject to frequent changes and interpretation. Furthermore, the distribution platforms~~ may not ~~enforce~~attract ~~their standard terms~~ and ~~policies~~retain ~~for~~key ~~application~~users ~~developers consistently~~ and ~~uniformly across~~our ~~all~~revenue ~~applications~~ and ~~with~~results ~~all~~of ~~publishers~~operations may decline.

~~There~~DraftKings iswas nofounded ~~guarantee~~in ~~that~~2011 ~~popular~~with ~~mobile~~a ~~devices~~singular ~~will~~focus ~~start or continue to support or feature our product offerings, or that mobile device users will continue to use our product offerings rather than competing products. We are dependent~~ on the ~~interoperability~~DFS ofindustry ~~our technology with popular mobile operating systems, technologies, networks~~ and ~~standards~~initially ~~that~~focused weits doefforts ~~not~~on ~~control,~~growing ~~such as~~ the ~~Android~~DFS ~~and~~product ~~iOS~~offering. ~~operating~~In ~~systems~~2018, ~~and~~DraftKings ~~any~~expanded ~~changes,~~its ~~bugs, technical~~product orofferings ~~regulatory~~to ~~issues~~include inits ~~such~~Sportsbook ~~systems, our relationships with mobile manufacturers~~ and ~~carriers,~~iGaming ~~or in their terms of service or policies that degrade our~~ offerings’. ~~functionality,~~DraftKings ~~reduce~~has orrapidly ~~eliminate~~expanded ~~our~~and ~~ability~~we toanticipate ~~distribute~~expanding ~~our~~further ~~offerings, give~~as ~~preferential~~new ~~treatment~~product ~~to competitive products, limit our ability to deliver high quality~~ offerings, ormature ~~impose~~and ~~fees~~as orwe ~~other charges~~pursue ~~related to delivering~~ our ~~offerings,~~growth ~~could adversely affect our product usage and monetization on mobile devices~~strategies.

~~Moreover,~~The ~~our~~industries ~~products~~in ~~require~~which ~~high-bandwidth~~we ~~data~~operate ~~capabilities in~~are ~~order~~subject to ~~place~~rapid ~~time-sensitive~~and ~~bets.~~frequent Ifchanges ~~the~~in ~~growth~~standards, ~~of high-bandwidth capabilities~~technologies, ~~particularly~~products ~~for~~and ~~mobile~~service ~~devices~~offerings, isas ~~slower than~~well weas ~~expect,~~in ~~our~~customer ~~user~~demands ~~growth,~~and ~~retention,~~expectations and ~~engagement~~regulations. ~~may~~We bemust ~~seriously~~continuously ~~harmed.~~make ~~Additionally,~~decisions toregarding ~~deliver~~in ~~high-quality~~which ~~content over~~offerings ~~mobile~~and ~~cellular~~technology ~~networks,~~we ~~our~~should ~~product~~invest ~~offerings~~to ~~must~~meet ~~work~~customer ~~well~~demand ~~with~~in acompliance ~~range~~with ofevolving ~~mobile~~industry ~~technologies,~~standards ~~systems,~~and ~~networks,~~regulatory ~~regulations,~~ requirements and ~~standards~~must ~~that~~continually weintroduce doand ~~not~~successfully ~~control.~~market Innew ~~particular~~and innovative technologies, ~~any~~offerings ~~future~~and ~~changes~~enhancements to ~~the~~remain ~~iOS~~competitive orand ~~Android~~effectively ~~operating~~stimulate ~~systems~~customer ~~may~~demand, ~~impact~~acceptance ~~the accessibility,~~and ~~speed~~engagement. Our ability to engage, ~~functionality~~retain, and ~~other~~increase ~~performance~~our ~~aspects~~user ofbase and to increase our ~~offerings,~~revenue ~~which~~will ~~issues~~depend ~~are~~heavily ~~likely~~on our ability to ~~occur~~successfully increate ~~the~~new ~~future from~~offerings, ~~time~~both toindependently ~~time~~and together with third parties. InWe ~~addition,~~may ~~the~~introduce ~~adoption~~significant ofchanges ~~any~~to ~~laws~~our existing technology and offerings or ~~regulations~~develop ~~that~~and ~~adversely~~introduce ~~affect~~new ~~the~~and ~~growth,~~unproven ~~popularity~~products and services, orwith ~~use~~which ~~of the~~we ~~Internet,~~have ~~including~~little ~~laws~~or ~~governing~~no ~~Internet~~prior ~~neutrality,~~development ~~could~~or ~~decrease~~operating ~~the~~experience. ~~demand~~The ~~for~~process ~~our~~of ~~products~~developing new offerings and ~~increase~~systems ~~our~~is ~~cost~~inherently ~~of doing~~complex ~~business.~~and ~~Specifically~~uncertain, ~~any~~and ~~laws~~new ~~that~~offerings ~~would~~may ~~allow~~not ~~mobile~~be ~~providers~~well inreceived ~~the~~by ~~United~~users, ~~States~~even toif ~~impede~~well-reviewed ~~access~~and toof ~~content,~~high orquality. ~~otherwise discriminate~~If ~~against~~we ~~content~~are ~~providers~~unable ~~like~~to ~~us,~~develop ~~such~~technology asand ~~providing~~products ~~for~~that ~~faster~~address users’ needs or ~~better~~enhance ~~access~~and toimprove our ~~competitors,~~existing ~~over~~technology ~~their~~and ~~data networks~~offerings in a timely manner, that could have a material adverse effect on our business, financial condition, results of operations and prospects.

28 Although we intend to continue investing in our research and development efforts, if new or enhanced offerings fail to engage our users or partners, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, any of which may seriously harm our business. In addition, management may not properly ascertain or assess the risks of new initiatives, and subsequent events may alter the risks that were evaluated at the time we decided to execute any new initiative. Creating additional offerings can also divert our management’s attention from other business issues and opportunities. Even if our new offerings attain market acceptance, those new offerings could exploit the market share of our existing product offerings or share of our users’ wallets in a manner that could negatively impact their

Furthermore, we may not successfully cultivate relationships with key industry participants or develop product offerings that operate effectively with these technologies, systems, networks, regulations, or standards. If it becomes more difficult for our users to access and use our offerings on their mobile devices, if our users choose not to access or use our offerings on their mobile devices, or if our users choose to use mobile products that do not offer access to our offerings, our user growth, retention, and engagement could be seriously harmed.25

Inecosystem. ~~addition~~Furthermore, ifsuch ~~any~~ expansion of our business increases the ~~third-party~~complexity ~~platforms~~of ~~used~~our ~~for~~business ~~distribution~~and ofplaces an additional burden on our ~~product~~management, ~~offerings~~operations, ~~were~~technical tosystems ~~limit~~and orfinancial ~~disable~~resources ~~advertising~~and onwe ~~their~~may ~~platforms, either~~not ~~because~~recover the often-substantial up-front costs of ~~technological~~developing ~~constraints~~and marketing new offerings, or ~~because~~recover the ~~owner~~opportunity cost of ~~these~~diverting ~~distribution~~management ~~platforms~~and ~~wished~~financial toresources ~~impair~~away ~~our~~from ~~ability to~~other ~~serve~~offerings. ~~ads~~In onthe ~~them,~~event of continued growth of our ~~ability~~operations, toproducts ~~generate~~or ~~revenue~~in ~~could~~the benumber ~~harmed.~~of ~~Also~~third-party relationships, ~~technologies~~we may benot ~~developed~~have ~~that~~adequate ~~can~~resources, ~~block~~operationally, technologically or otherwise to support such growth and the ~~display~~ quality of our ~~ads.~~technology, ~~These~~offerings ~~changes~~or our relationships with third parties could ~~materially~~suffer. ~~impact~~In ~~the~~addition, ~~way~~failure weto doeffectively ~~business~~identify, pursue and ifexecute wenew orbusiness ~~our~~initiatives, ~~advertising~~or ~~partners~~to ~~are~~efficiently ~~unable to~~adapt ~~quickly~~our processes and ~~effectively~~infrastructure ~~adjust~~ to ~~those~~meet ~~changes,~~the ~~there~~needs ~~could~~of beour aninnovations, ~~adverse~~may ~~effect~~adversely onaffect our business, financial condition, results of operations orand prospects.

WeAny new offerings may also require ~~additional~~our ~~capital~~ users to ~~support~~utilize new skills to use our ~~growth~~offerings. ~~plans~~This could create a lag in adoption of new offerings and new user additions related to any new offerings. To date, new offerings and ~~such~~enhancements ~~capital~~of ~~may~~our existing technology have not hindered our user growth or engagement, but that may be ~~available~~the onresult ~~terms~~of ~~acceptable~~a large portion of our user base being in a younger demographic and more willing to usinvest the time to learn to use our products most effectively. To the extent that future users, including those in older demographics, are less willing to invest the time to learn to use our products, and if atwe ~~all.~~are ~~This~~unable ~~could~~to ~~hamper~~make our products easier to learn to use, our user growth ~~and~~or ~~adversely~~engagement ~~affect~~could be affected, and our business could be harmed. We may develop new products that increase user engagement and costs without increasing revenue.

WeAdditionally, ~~intend~~we tomay make ~~significant~~bad ~~investments~~or tounprofitable ~~support~~decisions ~~our~~regarding ~~business growth~~these ~~and~~investments. ~~may~~If ~~require additional funds to respond to business challenges, including the need to develop~~ new ~~offerings and features~~ or ~~enhance our~~ existing ~~offerings~~competitors ~~and~~offer ~~features,~~more ~~improve~~attractive ~~our operating infrastructure or acquire complementary businesses~~offerings, ~~personnel and technologies. Accordingly,~~ we may ~~need~~lose tousers ~~engage in equity~~ or ~~debt~~users ~~financings~~may todecrease ~~secure~~their ~~additional~~spending ~~funds. Our ability to obtain additional capital, if and when required, will depend~~ on our ~~business plans, investor demand, our operating performance, capital markets conditions and other factors~~offerings. IfNew wecustomer ~~raise additional funds by issuing equity~~demands, ~~equity-linked~~superior orcompetitive ~~debt securities~~offerings, ~~those~~new ~~securities may~~industry ~~have~~standards ~~rights, preferences~~ or ~~privileges~~changes ~~senior~~in to the ~~rights~~regulatory ofenvironment ~~our~~could ~~currently~~render ~~issued~~our ~~and~~existing ~~outstanding~~offerings ~~equity~~unattractive, unmarketable or ~~debt,~~obsolete and ~~our existing~~require ~~shareholders~~us ~~may~~to ~~experience~~make ~~dilution.~~substantial Ifunanticipated wechanges ~~are unable~~ to ~~obtain~~our ~~additional~~technology ~~capital when required,~~ or onbusiness ~~satisfactory terms,~~model. ~~our~~Our ~~ability~~failure to ~~continue~~adapt to ~~support~~a ~~our~~rapidly ~~business~~changing ~~growth~~market or toevolving ~~respond~~customer todemands ~~business opportunities, challenges or unforeseen circumstances~~ could beharm ~~adversely~~our ~~affected~~business, ~~and~~financial ~~our~~condition, ~~business~~results ~~may~~of beoperations ~~harmed~~and prospects.

WeOur ~~may~~growth ~~invest~~will independ oron ~~acquire~~our ~~other businesses,~~ability to attract and ~~our~~retain ~~business~~users, ~~may~~and ~~suffer~~the ifloss weof ~~are~~our ~~unable~~users, failure to ~~successfully~~attract ~~integrate~~new ~~acquired~~users ~~businesses~~in ~~into~~a ~~our~~cost-effective ~~company~~manner, or ~~otherwise~~ failure to effectively manage ~~the~~our growth ~~associated~~could ~~with~~adversely ~~multiple~~affect ~~acquisitions~~our business, financial condition, results of operations and prospects.

AsOur ~~part~~ability ofto ~~our~~achieve ~~business strategy~~growth in revenue in the future will depend, wein ~~have~~large ~~made~~part, ~~and~~upon weour ~~intend~~ability to ~~continue~~attract new users to ~~make~~our offerings, ~~acquisitions~~retain asexisting ~~opportunities~~users ~~arise~~of toour ~~add~~offerings ~~new~~and orreactivate ~~complementary~~users ~~businesses, products,~~in ~~brands~~a orcost-effective ~~technologies~~manner. InAchieving ~~some~~growth ~~cases,~~in ~~the~~our ~~costs~~community of ~~such~~users ~~acquisitions~~ may berequire ~~substantial,~~us ~~including~~to asincreasingly aengage ~~result~~in ofsophisticated ~~professional fees~~ and ~~due~~costly ~~diligence~~sales and marketing efforts., ~~There~~which ismay nonot ~~assurance~~make ~~that~~sense ~~the~~in ~~time~~terms of return on investment. We have used and ~~resources~~expect ~~expended~~to oncontinue ~~pursuing~~to use a ~~particular~~variety ~~acquisition will~~of ~~result~~free inand apaid ~~completed~~marketing ~~transaction~~channels, orin ~~that~~combination ~~any~~with ~~completed~~compelling ~~transaction~~offers ~~will~~and ~~ultimately~~exciting begames ~~successful~~to achieve our objectives. InFor ~~addition~~paid marketing, we ~~may~~intend ~~be unable~~ to ~~identify~~leverage ~~suitable~~a ~~acquisition~~broad orarray ~~strategic~~of ~~investment~~advertising ~~opportunities~~channels, orincluding ~~may~~television, beradio, ~~unable~~social tomedia ~~obtain~~platforms, ~~any~~such ~~required~~as ~~financing or~~Facebook, Instagram, ~~regulatory~~Twitter ~~approvals~~and Snap, affiliates and ~~therefore~~paid ~~may~~and beorganic ~~unable~~search, toand ~~complete~~other digital channels, such ~~acquisitions~~as ormobile ~~strategic~~display. ~~investments~~If onthe ~~favorable~~search ~~terms, if~~engines aton ~~all.~~which Wewe ~~may~~rely ~~decide~~modify totheir ~~pursue~~algorithms, ~~acquisitions~~change ~~with~~their ~~which~~terms ~~our~~around ~~investors~~gaming, ~~may~~or ~~not~~if ~~agree~~the ~~and~~prices at which we ~~cannot~~may ~~assure~~purchase ~~investors~~listings ~~that~~increase, ~~any acquisition~~then orour ~~investment~~costs ~~will~~could beincrease, ~~successful~~and orfewer ~~otherwise~~users ~~provide~~may aclick ~~favorable~~through ~~return~~to onour ~~investment~~website. InIf ~~addition,~~links ~~acquisitions and~~to ~~the~~our ~~integration~~website ~~thereof~~are ~~require~~not ~~significant~~displayed ~~time~~prominently ~~and~~in ~~resources~~online ~~and~~search ~~place~~results, ~~significant~~if ~~demands~~fewer onusers ~~our~~click ~~management,~~through asto ~~well~~our ~~as on~~website, if our ~~operational~~other ~~and~~digital ~~financial~~marketing ~~infrastructure.~~campaigns Inare ~~addition~~not effective, ifof weit ~~fail~~the tocosts ~~successfully~~of ~~close~~attracting ~~transactions~~users orusing ~~integrate~~any ~~new~~of ~~teams, or~~our ~~integrate~~current ~~the~~methods ~~products~~significantly ~~and~~increase, ~~technologies~~then ~~associated~~our ~~with~~ability ~~these~~to ~~acquisitions~~efficiently ~~into~~attract ~~our~~new ~~company~~users could be reduced, our ~~business~~revenue could bedecline ~~seriously harmed.~~and ~~Acquisitions~~our ~~may~~business, ~~expose~~financial uscondition toand ~~operational~~results ~~challenges~~of ~~and~~operations ~~risks,~~could ~~including:~~be harmed.

·In ~~the~~addition, our ability to ~~profitably~~increase ~~manage~~the ~~acquired~~number ~~businesses~~of orusers ~~successfully~~of ~~integrate~~our ~~the~~offerings ~~acquired~~will ~~businesses’~~depend ~~operations,~~on ~~personnel,~~continued ~~financial~~user ~~reporting~~adoption of DFS, ~~accounting~~Sportsbook and ~~internal~~iGaming. ~~controls~~Growth in the DFS, ~~technologies~~Sportsbook and ~~products~~iGaming ~~into~~industries and the level of demand for and market acceptance of our ~~business;~~product offerings will be subject to a high degree of uncertainty. We cannot assure that consumer adoption of our product offerings will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.

·Additionally, ~~increased~~as ~~indebtedness~~technological or regulatory standards change and we modify our offerings to comply with those standards, we may need users to take certain actions to continue playing, such as performing age verification checks or accepting new terms and conditions. Users may stop using our offerings at any time, including if the ~~expense~~quality of ~~integrating~~the ~~acquired~~user ~~businesses~~experience, including ~~significant~~our ~~administrative,~~support ~~operational,~~capabilities ~~economic~~in the event of a problem, ~~geographic~~does not meet their expectations or ~~cultural~~keep ~~challenges~~pace inwith ~~managing~~the ~~and~~quality ~~integrating~~of the ~~expanded~~customer orexperience ~~combined~~generally ~~operations;~~offered by competitive offerings.

·Our ~~entry~~core ~~into~~values ~~jurisdictions or acquisition~~ of ~~products~~focusing oron ~~technologies~~our ~~with~~users ~~which~~first weand ~~have~~acting ~~limited~~for ~~or no prior experience, and~~ the ~~potential~~long ofterm ~~increased~~may ~~competition~~conflict with ~~new~~the orshort-term ~~existing~~interests ~~competitors as a result~~ of ~~such~~our ~~acquisitions;~~business.

·One ~~diversion~~ of ~~management’s~~our ~~attention~~operating principles is to put our users first, which we believe is essential to our success and serves the ~~over~~best, long-~~extension~~term interests of our ~~operating~~company ~~infrastructure~~ and our ~~management~~stakeholders. ~~systems~~Therefore, ~~information~~we ~~technology~~have ~~systems,~~made ~~and~~in ~~internal~~the ~~controls~~past and ~~procedures,~~we ~~which~~ may bemake ~~inadequate~~in tothe ~~support~~future, ~~growth;~~

· the ability to fund our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and26

·certain ~~the~~investments ~~ability~~or tochanges ~~retain~~in orstrategy ~~hire~~that ~~qualified~~we ~~personnel~~think ~~required~~will ~~for~~benefit ~~expanded~~our ~~operations~~users, even if our decision negatively impacts our operating results in the short term.

29 Our business model depends upon the continued compatibility between our app and the major mobile operating systems and upon third-party platforms for the distribution of our product offerings. If Google Play or the Apple App Store prevent users from downloading our apps or block advertising from being delivered to our users, our ability to grow our revenue, profitability and prospects may be adversely affected.

~~Our~~The ~~acquisition~~substantial ~~strategy may~~majority ~~not~~of ~~succeed~~our ifusers access our DFS, Sportsbook and iGaming product offerings primarily on mobile devices, and we ~~are~~believe ~~unable~~that tothis ~~remain~~will ~~attractive~~continue to ~~target~~be ~~companies~~increasingly orimportant ~~expeditiously~~to ~~close~~our ~~transactions~~long-term success. ~~Issuing~~Our ~~shares of~~business ~~Class A~~model ~~common~~depends ~~stock~~upon tothe ~~fund~~continued ancompatibility ~~acquisition~~between ~~would~~our ~~cause~~app ~~economic~~and ~~dilution~~the tomajor ~~existing~~mobile ~~stockholders~~operating systems. IfThird parties with whom we ~~develop~~do anot ~~reputation for~~have ~~being~~any aformal ~~difficult~~relationships ~~acquirer~~control orthe ~~having~~design anof ~~unfavorable~~mobile ~~work~~devices ~~environment,~~and oroperating ~~target~~systems. ~~companies~~These ~~view~~parties ~~our~~frequently ~~Class A~~introduce ~~common~~new ~~stock unfavorably~~devices, weand from time to time they may beintroduce ~~unable~~new tooperating ~~consummate~~systems ~~key~~or ~~acquisition~~modify ~~transactions~~existing ~~essential~~ones. Network carriers may also impact the ability to ~~our~~download ~~corporate~~apps ~~strategy~~or ~~and~~access ~~our~~specified ~~business may~~content beon ~~seriously~~mobile ~~harmed~~devices.

WeIn ~~are~~addition, we rely upon third-party toplatforms ~~pending~~for ~~litigation in~~distribution ~~various~~of ~~jurisdictions~~our product offerings. The DFS product offering is delivered as a free application through both the Apple App Store and ~~with~~the ~~various~~Google ~~plaintiffs~~Play Store and weis ~~may~~also beaccessible ~~subject~~via tomobile ~~future~~and ~~litigation~~traditional inwebsites. The Sportsbook and iGaming product offerings are primarily distributed through the Apple App Store and a traditional website. The Google Play store and Apple App Store are global application distribution platforms and the main distribution channels for our app. As such, the promotion, distribution and operation of our ~~business~~app are subject to the respective distribution platforms’ standard terms and policies for application developers, which are very broad and subject to frequent changes and interpretation. An ~~adverse~~Furthermore, ~~outcome~~the indistribution ~~one~~platforms ormay ~~more~~not ~~proceedings~~enforce ~~could~~their ~~adversely~~standard ~~affect~~terms ~~our~~and ~~business~~policies for application developers consistently and uniformly across all applications and with all publishers.

InThere ~~the~~is ~~past~~no weguarantee ~~have been~~that ~~party~~popular mobile devices will start or continue to support or feature our product offerings, ~~and~~or wethat ~~may~~mobile indevice ~~the~~users ~~future~~will ~~increasingly~~continue ~~face~~to use our product offerings rather than competing products. We are dependent on the ~~risk~~interoperability of, ~~claims~~our technology with popular mobile operating systems, ~~lawsuits~~technologies, networks and ~~other~~standards ~~proceedings~~that ~~involving~~we ~~competition and~~do ~~antitrust~~not control, ~~intellectual~~such ~~property,~~as ~~privacy,~~the ~~consumer~~Android ~~protection,~~and ~~accessibility~~iOS ~~claims~~operating systems, ~~securities~~and any changes, ~~tax~~bugs, ~~labor~~technical ~~and~~or ~~employment, commercial~~regulatory ~~disputes~~issues in such systems, ~~services~~our ~~and~~relationships ~~other~~with ~~matters.~~mobile ~~See~~manufacturers ~~“Business~~and —carriers, ~~Legal~~or ~~Proceedings.”~~in ~~Litigation~~their toterms ~~defend~~of ~~us against~~service ~~claims~~or bypolicies ~~third~~that ~~parties,~~degrade orour toofferings’ ~~enforce~~functionality, ~~any~~reduce ~~rights~~or ~~that~~eliminate weour ~~may~~ability ~~have~~to ~~against~~distribute ~~third~~our ~~parties~~offerings, ~~may~~give bepreferential ~~necessary,~~treatment ~~which~~to ~~could result~~competitive inproducts, ~~substantial~~limit ~~costs~~our ~~and~~ability ~~diversion~~to ofdeliver ~~our~~high ~~resources~~quality offerings, ~~causing~~or aimpose ~~material~~fees ~~adverse~~or ~~effect~~other oncharges related to delivering our ~~business~~offerings, ~~financial~~could ~~condition, results~~adversely ofaffect ~~operations~~our product usage and ~~prospects~~monetization on mobile devices.

~~Any~~Moreover, ~~litigation~~our products require high-bandwidth data capabilities in order to ~~which~~ weplace ~~are~~time-sensitive abets. ~~party~~If ~~may~~the ~~result~~growth inof anhigh-bandwidth ~~onerous~~capabilities, orparticularly ~~unfavorable~~for ~~judgment~~mobile ~~that~~devices, ~~may~~is ~~not~~slower than we expect, our user growth, retention, and engagement may be ~~reversed~~seriously ~~upon~~harmed. ~~appeal~~Additionally, orto indeliver ~~payments~~high-quality ~~of substantial~~content ~~monetary~~over ~~damages~~mobile orcellular ~~fines~~networks, ~~the~~our ~~posting~~product offerings must work well with a range of ~~bonds~~mobile ~~requiring~~technologies, ~~significant~~systems, ~~collateral~~networks, ~~letters~~regulations, ofand ~~credit~~standards orthat ~~similar~~we ~~instruments~~do not control. In particular, any future changes to the iOS or weAndroid operating systems may ~~decide~~impact tothe ~~settle~~accessibility, ~~lawsuits~~speed, onfunctionality, ~~similarly~~and ~~unfavorable~~other ~~terms.~~performance ~~These~~aspects ~~proceedings~~of ~~could~~our ~~also~~offerings, ~~result~~which issues are likely to occur in ~~reputational~~the ~~harm, criminal~~future ~~sanctions~~from time to time. In addition, ~~consent~~the ~~decrees~~adoption of any laws or ~~orders~~regulations ~~preventing~~that usadversely ~~from~~affect ~~offering~~the ~~certain~~growth, ~~products~~popularity, or ~~requiring~~use aof ~~change~~the inInternet, including laws governing Internet neutrality, could decrease the demand for our products and increase our cost of doing business ~~practices~~. inSpecifically, ~~costly~~any ~~ways~~laws orthat ~~requiring~~would ~~development~~allow ofmobile ~~non-infringing~~providers orin ~~otherwise~~the ~~altered~~United ~~products~~States orto ~~technologies.~~impede ~~Litigation and~~access ~~other~~to ~~claims~~content, ~~and~~or ~~regulatory~~otherwise ~~proceedings~~discriminate against content providers like us, ~~could~~such ~~result~~as inproviding ~~unexpected~~for ~~disciplinary~~faster ~~actions~~or better access to our competitors, ~~expenses~~over ~~and~~their ~~liabilities~~data networks, ~~which~~ could have a material adverse effect on our business, financial condition, results of operations and prospects.

~~Our~~Furthermore, ~~business~~we ismay ~~subject~~not tosuccessfully acultivate ~~variety of~~relationships ~~U.S.~~with ~~and~~key ~~foreign~~industry ~~laws,~~participants ~~many~~or ofdevelop ~~which~~product ~~are~~offerings ~~unsettled~~that ~~and~~operate ~~still~~effectively ~~developing~~with ~~and~~these ~~which~~technologies, ~~could~~systems, ~~subject~~networks, usregulations, ~~to claims~~ or ~~otherwise harm our business~~standards. ~~Any~~If ~~change~~it inbecomes ~~existing~~more ~~regulations~~difficult orfor ~~their~~our ~~interpretation,~~users orto ~~the~~access ~~regulatory~~and ~~climate~~use ~~applicable~~our toofferings ~~our~~on ~~products and~~their ~~services~~mobile devices, orif ~~changes~~our inusers ~~tax~~choose ~~rules and~~not ~~regulations~~to access or ~~interpretation~~use ~~thereof~~our ~~related~~offerings toon ~~our~~their ~~products~~mobile ~~and services~~devices, ~~could adversely~~or ~~impact~~if our ~~ability~~users choose to ~~operate~~use ~~our~~mobile ~~business~~products asthat ~~currently~~do ~~conducted~~not oroffer asaccess ~~we seek~~ to ~~operate~~our ~~in the future~~offerings, ~~which~~our ~~could have~~user agrowth, ~~material~~retention, ~~adverse~~and ~~effect~~engagement oncould ~~our~~be ~~financial~~seriously ~~condition and results of operations~~harmed.

WeIn ~~are~~addition, ~~generally subject~~if toany ~~laws~~of ~~and~~the ~~regulations~~third-party ~~relating~~platforms toused ~~fantasy~~for ~~sports,~~distribution ~~sports~~of ~~betting~~our ~~and~~product ~~iGaming~~offerings inwere ~~the~~to ~~jurisdictions~~limit inor ~~which~~disable weadvertising ~~conduct our~~on ~~business~~their orplatforms, ineither ~~some~~because ~~circumstances,~~ of ~~those~~technological ~~jurisdictions~~constraints ~~in which we offer our services~~ or ~~those~~because ~~are available, as well as~~ the ~~general~~owner ~~laws~~of ~~and~~these ~~regulations~~distribution ~~that~~platforms ~~apply~~wished to ~~all~~impair ~~e-commerce~~our ~~businesses,~~ability ~~such as those related~~ to ~~privacy~~serve ~~and~~ads ~~personal~~on ~~information~~them, ~~tax~~ ~~and~~our ~~consumer~~ability ~~protection. These laws and regulations vary from one jurisdiction~~ to ~~another~~generate ~~and~~revenue ~~future~~could ~~legislative~~be ~~and~~harmed. ~~regulatory action~~Also, ~~court~~technologies ~~decisions or other governmental action, which~~ may be ~~affected~~developed ~~by,~~that ~~among~~can ~~other~~block ~~things,~~the ~~political~~display ~~pressures,~~of ~~attitudes and climates, as well as personal biases, may have a material impact on~~ our ~~operations and financial results~~ads. InThese ~~particular,~~changes ~~some jurisdictions~~could ~~have~~materially ~~introduced~~impact ~~regulations~~the ~~attempting~~way towe ~~restrict~~do ~~or prohibit online gaming~~business, ~~while others have taken the position that online gaming should be licensed~~ and ~~regulated~~if ~~and~~we ~~have adopted~~ or ~~are~~our inadvertising ~~the~~partners ~~process~~are ofunable ~~considering~~to ~~legislation~~quickly and ~~regulations to~~effectively ~~enable~~adjust ~~that~~ to ~~happen.~~those ~~Additionally~~changes, ~~some~~there ~~jurisdictions in which we may operate~~ could ~~presently~~ be ~~unregulated~~an oradverse ~~partially regulated~~effect ~~and~~on ~~therefore~~our ~~more~~business, ~~susceptible~~financial tocondition, ~~the~~results ~~enactment or change~~ of ~~laws~~operations ~~and~~or ~~regulations~~prospects.

We offer our DFS product offering in 22 states that have adopted legislation permitting online fantasy sports. In those states that currently require a license or registration, we have either obtained the appropriate license or registration, have obtained a provisional license, or are operating pursuant to a grandfathering clause that allows operation pending the availability of licensing applications and subsequent grant of a license. We also have three foreign licenses and operates under those licenses in eight countries.27

We ~~operate~~may inrequire ~~21 states~~additional ~~and~~capital ~~one~~to ~~country,~~support ~~Canada,~~our ~~that~~growth ~~do not have fantasy sports-specific laws or regulations. In those jurisdictions~~plans, ~~our business may be subject to future legislative~~ and ~~regulatory~~such ~~action,~~capital ~~court~~may ~~decisions~~not orbe ~~other~~available ~~governmental~~on ~~action~~terms ~~that~~acceptable ~~could alter or eliminate our ability~~ to ~~operate. On February 6~~us, ~~2020,~~if aat ~~state intermediate appellate court in New York determined in a split decision that a law specifically authorizing paid fantasy sports contests in New York violated the New York constitution~~all. This ~~decision is currently stayed and has been appealed to the New York Court of Appeals (the highest court in New York). If upheld, it~~ could ~~jeopardize~~ ~~our~~hamper ~~ability to operate~~ our ~~DFS~~growth ~~offering in New York. In addition, in certain states in which DraftKings operates, including Texas~~ and ~~Florida,~~adversely ~~the~~affect applicable office of the Attorney General has issued an adverse legal opinion regarding DFS. In the event that one of those Attorneys General decides to take action on the opinion from their office, we may have to withdraw our ~~operations from such state, which could have a material adverse effect on our~~ business~~, financial condition and results of operations~~.

30 We intend to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new offerings and features or enhance our existing offerings and features, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. Our ability to obtain additional capital, if and when required, will depend on our business plans, investor demand, our operating performance, capital markets conditions and other factors. If we raise additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing shareholders may experience dilution. If we are unable to obtain additional capital when required, or on satisfactory terms, our ability to continue to support our business growth or to respond to business opportunities, challenges or unforeseen circumstances could be adversely affected, and our business may be harmed.

InWe ~~May 2018,~~may ~~the~~invest ~~U.S.~~in ~~Supreme~~or ~~Court~~acquire ~~struck~~other down PASPA as unconstitutional. This decision has the effect of lifting federal restrictions on sports betting and thus allowing states to determine the legality of sports betting for themselves. Since the repeal of PASPAbusinesses, ~~several states (~~and Washington D.C.) have legalized online sports betting. To the extent new real money gaming or sports betting jurisdictions are established or expanded, we cannot guarantee that we will be successful in penetrating such new jurisdictions or expanding our business ormay ~~user~~suffer ~~base~~if ~~in line with the growth of existing jurisdictions. If~~ we are unable to ~~effectively develop and operate directly or indirectly within these new jurisdictions or if our competitors are able to~~ successfully ~~penetrate~~integrate ~~geographic~~acquired ~~jurisdictions~~businesses that we cannot access or where we face other restrictions, there could be a material adverse effect on our business, operating results and financial condition. Our failure to obtain or maintain the necessary regulatory approvals in jurisdictions, whether individually or collectively, would have a material adverse effect on our business. See “Business — Government Regulation.” To expand into ~~new jurisdictions, we may need to be licensed and obtain approvals of~~ our ~~product~~company ~~offerings. This is a time-consuming process that can be costly. Any delays in obtaining~~ or ~~difficulty~~otherwise inmanage ~~maintaining regulatory approvals needed for expansion within existing jurisdictions or into new jurisdictions can negatively affect our opportunities for growth, including~~ the growth ofassociated ~~our~~with ~~customer~~multiple ~~base, or delay our ability to recognize revenue from our offerings in any such jurisdictions~~acquisitions.

~~Future~~As ~~legislative~~part ~~and~~of ~~regulatory~~our ~~action~~business strategy, we have made, and ~~court~~we ~~decisions or~~intend ~~other~~to ~~governmental~~continue ~~action~~to make, ~~may~~acquisitions ~~have~~as aopportunities ~~material~~arise ~~impact~~to onadd ~~our~~new ~~operations~~or ~~and~~complementary ~~financial~~businesses, ~~results~~products, brands or technologies. ~~Governmental~~In ~~authorities~~some ~~could view~~cases, usthe ascosts ~~having~~of ~~violated~~such ~~local~~acquisitions ~~laws~~may be substantial, ~~despite~~including ~~our~~as ~~efforts~~a toresult ~~obtain~~of ~~all~~professional ~~applicable~~fees ~~licenses~~and ordue ~~approvals~~diligence efforts. There is ~~also~~no aassurance ~~risk~~ that ~~civil~~the time and ~~criminal~~resources ~~proceedings,~~expended ~~including~~on ~~class~~pursuing ~~actions,~~a ~~brought~~particular byacquisition orwill onresult ~~behalf~~in ofa ~~prosecutors~~completed transaction, or ~~public~~that ~~entities~~any orcompleted ~~incumbent monopoly~~transaction ~~providers~~will ultimately be successful. In addition, we may be unable to identify suitable acquisition or ~~private~~strategic ~~individuals~~investment opportunities, ~~could~~or may be ~~initiated~~unable ~~against~~to ~~us, Internet~~obtain ~~service~~any ~~providers,~~required ~~credit~~financing ~~card~~or regulatory approvals, and ~~other payment~~therefore ~~processors,~~may ~~advertisers~~be ~~and~~unable ~~others~~to ~~involved~~complete insuch ~~the~~acquisitions ~~DFS,~~or ~~sports~~strategic ~~betting~~investments ~~and~~on ~~iGaming~~favorable ~~industries~~terms, if at all. ~~Such~~We ~~potential~~may ~~proceedings could~~decide ~~involve~~to ~~substantial~~pursue ~~litigation~~acquisitions ~~expense,~~with ~~penalties,~~which ~~fines,~~our ~~seizure~~investors ofmay ~~assets,~~not ~~injunctions~~agree orand ~~other~~we ~~restrictions~~cannot ~~being~~assure ~~imposed upon~~investors usthat any acquisition or ~~our~~investment ~~licensees~~will be successful or ~~other~~otherwise ~~business~~provide ~~partners~~a favorable return on investment. In addition, ~~while~~acquisitions ~~diverting~~and the ~~attention~~integration ofthereof ~~key~~require ~~executives.~~significant ~~Such~~time ~~proceedings~~and ~~could~~resources ~~have a~~and ~~material~~place ~~adverse~~significant ~~effect~~demands on our ~~business~~management, as well as on our operational and financial ~~condition~~infrastructure. In addition, ~~results~~if ofwe ~~operations~~fail ~~and~~to ~~prospects~~successfully close transactions or integrate new teams, asor ~~well~~integrate asthe ~~impact~~products and technologies associated with these acquisitions into our ~~reputation~~company, our business could be seriously harmed. Acquisitions may expose us to operational challenges and risks, including:

~~There~~•the ~~can~~ability ~~be no assurance that legally enforceable legislation will not be proposed and passed in jurisdictions relevant or potentially relevant~~ to ~~our business~~profitably tomanage ~~prohibit,~~acquired ~~legislate~~businesses or ~~regulate~~successfully ~~various~~integrate ~~aspects~~the ofacquired ~~the~~businesses’ ~~DFS~~operations, iGaming and sports betting industries (or that existing laws in those jurisdictions will not be interpreted negatively). Compliance with any such legislation may have a material adverse effect on our businesspersonnel, financial ~~condition and results of operations~~reporting, ~~either~~accounting asand ainternal ~~result of our determination that a jurisdiction should be blocked~~controls, ortechnologies ~~because~~and aproducts ~~local~~into ~~license or approval may be costly for us or~~ our business ~~partners to obtain and/or such licenses or approvals may contain other commercially undesirable conditions.~~;

In•increased ~~the~~indebtedness ~~context of our EU-facing operations, we may be subject to specific compliance obligations under the General Data Protection Regulation (EU) 2016/679 (the “GDPR”)~~ and ~~associated laws and regulations in different EU Member States in which we operate. In addition, portions of our business established outside~~ the EUexpense ~~may be required to comply with the requirements~~ of ~~the~~integrating ~~GDPR~~acquired ~~and associated EU legislation with respect to the offering of products or services to~~businesses, orincluding ~~the~~significant ~~monitoring of~~administrative, individuals in the EU. We may also be subject to the local privacy and data protection laws of the EU Member States in which we offer products or services. Failure to comply with these EU data protection and privacy lawsoperational, ~~can carry penalties and potential criminal sanctions~~economic, asgeographic ~~well~~or ascultural ~~the~~challenges ~~risk~~in ofmanaging ~~litigation. In addition, Directive 2002/58/EC (as amended by Directive 2009/136/EC) (together, the “e-Privacy Directive”) governs, among other things, the use of cookies~~ and ~~the~~integrating ~~sending of electronic direct marketing within~~ the ~~European~~expanded ~~Union~~or ~~and,~~combined as such, will apply to our marketing activities within the EU. Following Brexit, the UK has adopted its own data protection and direct marketing laws (the "UK data protection laws") which are currently based on the corresponding EU legislation. Our UK-facing operations ~~may therefore be subject to specific compliance obligations under the UK data protection laws.~~;

In•entry ~~our~~into ~~efforts~~jurisdictions to comply with these requirements, we rely on positions and interpretations of the law that have yet to be fully tested before the relevant courts and regulators. While the UK data protection laws are currently similar to the corresponding EU laws, it is possible that those laws will diverge in the future; to the extent that those laws do diverge, then that may increase the costs of maintaining regulatory compliance. There is also a risk that it may become more difficult to make cross-border transfers of personal data, as a result of diverging data protection regimes in the territories where our customers are located and the territories where our operations are based. If a regulator or ~~court~~acquisition of ~~competent~~products ~~jurisdiction determined that one~~ or ~~more~~technologies ofwith ~~our~~which ~~compliance~~we ~~efforts does~~have ~~not~~limited ~~satisfy the applicable requirements of the GDPR~~ or ~~the~~no ~~e-Privacy~~prior ~~Directive~~experience, orand the ~~UK data protection laws, or if any party brought a claim in this regard, there could be~~ potential ~~governmental~~of orincreased ~~regulatory~~competition ~~investigations,~~with ~~enforcement~~new ~~actions, regulatory fines, compliance orders, litigation~~ or ~~public~~existing ~~statements~~competitors ~~against~~as ~~us by consumer advocacy groups or others, and that could cause customers to lose trust in us and damage our reputation. Likewise,~~ a ~~change~~result inof ~~guidance~~such ~~could be costly and have an adverse effect on our business.~~acquisitions;

31 •diversion of management’s attention and the over-extension of our operating infrastructure and our management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth;

~~Our growth prospects depend on~~ •the ~~legal~~ ~~status~~ability ofto ~~real-money~~fund ~~gaming~~our incapital ~~various~~needs ~~jurisdictions,~~and ~~predominantly~~any ~~within~~cash ~~the~~flow ~~United~~shortages ~~States,~~that ~~and legalization~~ may ~~not~~ occur in asif ~~many~~anticipated ~~states~~revenue asis wenot ~~expect,~~realized or ~~may~~is ~~occur at a slower pace than we anticipate. Additionally~~delayed, ~~even~~whether ~~if jurisdictions legalize real money gaming, this may be accompanied~~ by ~~legislative~~general oreconomic ~~regulatory restrictions and/~~or ~~taxes~~market ~~that make it impracticable or less attractive to operate in those jurisdictions~~conditions, or ~~the~~unforeseen ~~process~~internal ofdifficulties; ~~implementing regulations or securing the necessary licenses to operate in a particular jurisdiction may take longer than we anticipate, which could adversely affect our future results of operations~~ and ~~make it more difficult to meet our expectations for financial performance.~~

A number of states have legalized, or are currently considering legalizing, real money gaming, and our business, financial condition, results of operations and prospects are significantly dependent upon legalization of real money gaming. Our business plan is partially based upon •the ~~legalization~~ability of real money gaming for a specific percent of the population on a yearly basis and the legalization may not occur as we have anticipated. Additionally, if a large number of additional states or the federal government enact real money gaming legislation and we are unable to ~~obtain,~~retain or ~~are~~hire ~~otherwise~~qualified ~~delayed~~personnel inrequired ~~obtaining~~for ~~the~~expanded ~~necessary licenses to operate online sports betting or iGaming websites in U~~operations.~~S. jurisdictions where such games are legalized, our future growth in online sports betting and iGaming could be materially impaired.~~

AsOur weacquisition ~~enter~~strategy ~~into new jurisdictions, states or the federal government~~ may ~~legalize~~not ~~real~~succeed ~~money~~if ~~gaming in a manner that is unfavorable to us. As a result,~~ we ~~may encounter legal, regulatory and political challenges that~~ are ~~difficult~~unable ~~or impossible~~ to ~~foresee~~remain ~~and~~attractive ~~which~~to ~~could~~target ~~result~~companies ~~in an unforeseen adverse impact on planned revenues~~ or ~~costs~~expeditiously ~~associated~~close ~~with the new opportunity~~transactions. ~~For~~Issuing ~~example,~~shares ~~certain~~of ~~states~~Class A ~~require~~common usstock to ~~have~~fund aan ~~relationship~~acquisition ~~with~~would acause ~~retail~~economic ~~operator for~~dilution ~~online Sportsbook access, which tends~~ to ~~increase~~existing ~~our costs of revenue~~stockholders. ~~States~~If ~~that~~we ~~have~~develop ~~established~~a ~~state-run~~reputation ~~monopolies may limit opportunities~~ for ~~private~~being ~~sector~~a ~~participants~~difficult ~~like~~acquirer ~~us.~~or ~~States~~having ~~also~~an ~~impose~~unfavorable ~~substantial~~work ~~tax rates on online sports betting and iGaming revenue~~environment, inor ~~addition~~target tocompanies ~~the~~view ~~federal~~our ~~excise~~Class A ~~tax~~common ofstock ~~25 basis points on the amount of each wager. As most state product taxes apply to various measures of modified gross profit~~unfavorably, ~~tax rates, whether federal- or state-based, that are higher than~~ we ~~expect will~~may ~~make~~be itunable ~~more~~to ~~costly~~consummate ~~and~~key ~~less~~acquisition ~~desirable~~transactions ~~for~~essential us to ~~launch~~our incorporate astrategy ~~given~~and ~~jurisdiction, while tax increases in any of~~ our ~~existing jurisdictions~~business may ~~adversely~~be ~~impact~~seriously ~~our profitability~~harmed.

Therefore, even in cases in which a jurisdiction purports to license and regulate DFS, sports betting or iGaming, the licensing and regulatory regimes can vary considerably in terms of their business-friendliness and at times may be intended to provide incumbent operators with advantages over new licensees. Therefore, some “liberalized” regulatory regimes are considerably more commercially attractive than others.28

~~Failure~~We toare ~~comply~~party ~~with regulatory requirements in a particular jurisdiction, or the failure~~ to ~~successfully~~pending ~~obtain~~litigation ain ~~license~~various orjurisdictions ~~permit~~and ~~applied~~with ~~for~~various inplaintiffs aand ~~particular jurisdiction,~~we ~~could~~may ~~impact~~be ~~our~~subject ~~ability~~ to ~~comply~~future ~~with~~litigation ~~licensing and regulatory requirements~~ in ~~other jurisdictions, or could cause~~ the ~~rejection~~operation of ~~license~~our ~~applications~~business. orAn ~~cancelation~~adverse ofoutcome ~~existing licenses~~ in ~~other~~one ~~jurisdictions,~~ or ~~could~~more ~~cause~~proceedings ~~financial~~could ~~institutions, online~~adversely ~~and~~affect ~~mobile platforms, advertisers and distributors to stop providing services to us which we rely upon to receive payments from, or distribute amounts to,~~ our ~~users, or otherwise to deliver and promote our services~~business.

~~Compliance~~In ~~with~~ the ~~various~~ ~~regulations~~past ~~applicable~~we tohave ~~fantasy~~been ~~sports~~party ~~and~~to, ~~real money gaming is costly~~ and ~~time-consuming.~~we ~~Regulatory~~may ~~authorities~~in at the ~~non-U.S.,~~future ~~U.S.~~increasingly ~~federal,~~face ~~state and local levels have broad powers with respect to~~ the ~~regulation~~risk ~~and licensing~~ of ~~fantasy sports and real money gaming operations and may revoke~~, ~~suspend~~claims, ~~condition or limit our fantasy sports or real money gaming licenses~~lawsuits, ~~impose~~ ~~substantial fines on us~~ and ~~take~~ other ~~actions,~~proceedings ~~any~~involving ~~one~~competition ofand ~~which~~antitrust, ~~could~~intellectual ~~have~~property, aprivacy, ~~material~~consumer ~~adverse~~protection, ~~effect~~accessibility onclaims, ~~our business~~securities, ~~financial~~ ~~condition~~tax, ~~results~~labor ~~of operations~~ and ~~prospects.~~employment, ~~These~~commercial ~~laws and regulations are dynamic and subject to potentially differing interpretations~~disputes, ~~and~~services ~~various legislative~~ and ~~regulatory~~other ~~bodies~~matters. ~~may~~See ~~expand~~“Business ~~current~~— ~~laws~~Legal ~~or regulations or enact new laws and regulations regarding these matters~~Proceedings.” WeLitigation ~~will strive~~ to ~~comply~~defend ~~with~~us ~~all~~against ~~applicable~~claims ~~laws~~by ~~and~~third ~~regulations~~parties, ~~relating~~or to ~~our~~enforce ~~business.~~any Itrights ~~is possible, however,~~ that ~~these~~we ~~requirements~~ may behave ~~interpreted~~against ~~and~~third ~~applied~~parties, inmay abe ~~manner~~necessary, ~~that~~which iscould ~~inconsistent~~result ~~from~~in ~~one~~substantial ~~jurisdiction~~costs ~~to another~~ and ~~may~~diversion ~~conflict~~of ~~with~~our ~~other rules. Non-compliance with any such law or regulations could expose us to claims~~resources, ~~proceedings,~~causing ~~litigation and~~a ~~investigations~~material byadverse ~~private~~effect ~~parties~~on ~~and~~our ~~regulatory authorities~~business, asfinancial ~~well as substantial fines and negative publicity~~condition, ~~each~~results of ~~which~~ ~~may~~operations ~~materially~~ and ~~adversely affect our business~~prospects.

Any ~~fantasy~~litigation ~~sports or~~to ~~real~~which ~~money~~we ~~gaming~~are ~~license~~a ~~could~~party bemay ~~revoked,~~result ~~suspended~~in oran ~~conditioned~~onerous ator ~~any~~unfavorable ~~time.~~judgment ~~The~~that ~~loss~~may ofnot abe ~~license~~reversed inupon ~~one~~appeal, ~~jurisdiction could~~or ~~trigger~~in ~~the~~payments ~~loss~~ of asubstantial ~~license~~monetary damages or ~~affect~~fines, ~~our~~the ~~eligibility~~posting ~~for~~of ~~such~~bonds arequiring ~~license~~significant ~~in another jurisdiction~~collateral, ~~and~~letters ~~any~~ of ~~such~~credit ~~losses,~~ or ~~potential~~similar ~~for such loss~~instruments, ~~could~~or ~~cause~~we usmay decide to ~~cease~~settle ~~offering~~lawsuits ~~some~~on orsimilarly ~~all~~unfavorable ~~of our offerings in the impacted jurisdictions~~terms. WeThese ~~may be~~proceedings ~~unable~~could toalso ~~obtain~~result orin ~~maintain~~reputational ~~all necessary registrations~~harm, ~~licenses,~~criminal ~~permits or approvals~~sanctions, ~~and~~consent ~~could~~decrees ~~incur fines~~ or ~~experience delays~~orders ~~related~~preventing tous ~~the~~from ~~licensing~~offering ~~process,~~certain ~~which~~products ~~could adversely affect our operations. Our delay~~ or ~~failure~~requiring toa ~~obtain~~change ~~or maintain licenses~~ in ~~any jurisdiction may prevent us from distributing~~ our ~~offerings,~~business ~~increasing~~practices ~~our~~in ~~customer~~costly ~~base~~ways ~~and/~~or ~~generating~~requiring ~~revenues. We~~development ~~cannot~~of ~~assure~~non-infringing ~~you~~or ~~that~~otherwise wealtered ~~will~~products beor ~~able~~technologies. toLitigation ~~obtain~~ and ~~maintain~~other ~~the~~claims ~~licenses~~ and ~~related~~regulatory ~~approvals~~proceedings ~~necessary~~against tous ~~conduct~~could ~~our~~result ~~DFS, Sportsbook~~in ~~and~~unexpected ~~iGaming~~disciplinary ~~operations.~~actions, ~~Any~~expenses ~~failure~~and ~~to maintain or renew our existing licenses~~liabilities, ~~registrations,~~which ~~permits or approvals~~ could have a material adverse effect on our business, financial condition, results of operations and prospects.

32Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business. Any change in existing regulations or their interpretation, or the regulatory climate applicable to our products and services, or changes in tax rules and regulations or interpretation thereof related to our products and services, could adversely impact our ability to operate our business as currently conducted or as we seek to operate in the future, which could have a material adverse effect on our financial condition and results of operations.

~~Our~~We ~~growth~~are ~~prospects~~generally subject to laws and ~~market potential~~regulations ~~will~~relating ~~depend~~to onfantasy ~~our~~sports, ~~ability~~sports tobetting ~~obtain~~and ~~licenses~~iGaming toin ~~operate~~the jurisdictions in awhich ~~number~~we conduct our business or in some circumstances, of those jurisdictions ~~and~~in ifwhich we ~~fail~~offer our services or those are available, as well as the general laws and regulations that apply to ~~obtain~~all e-commerce businesses, such ~~licenses~~ ~~our~~as ~~business~~those related to privacy and personal information, ~~financial~~tax ~~condition~~and consumer protection. These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. In particular, some jurisdictions have introduced legislation or regulations attempting to restrict or prohibit online gaming, while others have taken the position that online gaming should be licensed and regulated and have adopted or are in the process of ~~operations~~considering legislation and ~~prospects~~regulations to enable that to happen. Additionally, some jurisdictions in which we may operate could presently be ~~impaired~~unregulated or partially regulated and therefore more susceptible to the enactment or change of laws and regulations.

~~Our~~We ~~ability to grow our business will depend on our ability to obtain and maintain licenses to~~ offer our DFS product ~~offerings~~offering in a25 ~~large~~states ~~number~~that ofhave ~~jurisdictions or~~adopted inlegislation ~~heavily~~permitting ~~populated~~online ~~jurisdictions~~fantasy sports. IfIn wethose ~~fail~~states tothat ~~obtain~~currently ~~and~~require ~~maintain~~a ~~licenses~~license ~~in large jurisdictions~~ or ~~in a greater number of mid-market jurisdictions~~registration, ~~this~~we ~~may~~have ~~prevent~~either usobtained ~~from expanding~~ the ~~footprint~~appropriate oflicense ~~our~~or ~~product offerings~~registration, ~~increasing~~have ~~our~~obtained ~~user~~a ~~base and/or~~provisional ~~generating~~license, ~~revenues.~~or Weare ~~cannot~~operating bepursuant ~~certain that we will be able~~ to ~~obtain~~a ~~and~~grandfathering ~~maintain~~clause ~~licenses~~that ~~and~~allows ~~related~~operation ~~approvals~~pending ~~necessary to~~the ~~conduct~~availability ~~our~~of ~~DFS,~~licensing ~~Sportsbook~~applications and ~~iGaming~~subsequent ~~operations.~~grant ~~Any~~of ~~failure~~a tolicense. ~~obtain~~We ~~and~~also ~~maintain licenses, registrations, permits or approvals could~~ have athree ~~material~~foreign ~~adverse~~licenses ~~effect~~and onoperates ~~our~~under ~~business,~~those ~~financial~~licenses ~~condition,~~in ~~results~~five ~~of operations and prospects~~countries.

We operate in 20 states, Washington D.C. and one country, Canada, that do not have ~~been~~fantasy sports-specific laws or regulations. In those jurisdictions, our business may be subject to future legislative and ~~continue~~regulatory action, court decisions or other governmental action that could alter or eliminate our ability to beoperate. On February 6, 2020, a state intermediate appellate court in New York determined in a split decision that a law specifically authorizing paid fantasy sports contests in New York violated the ~~subject~~New ofYork ~~governmental~~constitution. ~~investigations~~This decision is currently stayed and ~~inquiries~~has ~~with~~been ~~respect~~appealed to the ~~operation~~New York Court of ~~our~~Appeals ~~businesses~~(the ~~and~~highest wecourt in New York), which heard oral arguments on February 8, 2022. If upheld, it could bejeopardize ~~subject~~ our ability to ~~future~~offer ~~governmental~~paid ~~investigations~~DFS in New York. In addition, in certain states in which DraftKings operates, including Texas and ~~inquiries~~Florida, the applicable office of the Attorney General has issued an adverse legal ~~proceedings~~opinion regarding DFS and ~~enforcement~~other ~~actions~~fantasy sports. ~~Any~~In ~~such~~the ~~investigation,~~event ~~inquiry, proceeding~~that orone of those Attorneys General decides to take action on the opinion from their office, we may have to withdraw our paid DFS operations from such state, which could ~~adversely~~have ~~affect~~a material adverse effect on our business, financial condition and results of operations.

WeIn ~~have received formal and informal inquiries from time to time~~May 2018, ~~from~~the ~~government~~U.S. ~~authorities~~Supreme ~~and~~Court ~~regulators,~~struck ~~including~~down ~~tax~~PASPA ~~authorities~~as ~~and~~unconstitutional. ~~gaming regulators,~~This ~~regarding~~decision ~~compliance~~has ~~with laws and other matters, and we may receive such inquiries in~~ the ~~future,~~effect ~~particularly as we grow and expand our operations. Violation~~ of ~~existing~~lifting orfederal ~~future~~restrictions ~~regulations,~~on ~~regulatory~~sports ~~orders~~betting orand ~~consent~~thus ~~decrees~~allowing ~~could~~states ~~subject us~~ to ~~substantial~~determine ~~monetary~~the ~~fines~~legality ~~and~~of ~~other~~sports ~~penalties~~betting ~~that~~for ~~could negatively affect our financial condition and results of operations~~themselves. In ~~addition,~~Since itthe is possible that future orders issued by, or inquiries or enforcement actions initiated by, government or regulatory authorities could cause us to incur substantial costs, expose us to unanticipated liability or penalties, or require us to change our business practices in a manner materially adverse to our business.

Participation in the sports betting industry exposes us to trading, liability management and pricing risk. We may experience lower than expected profitability and potentially significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of its sports risk management processes.29

~~Our~~repeal ~~fixed-odds betting products involve betting where winnings are paid on the basis~~ of ~~the~~PASPA, ~~stake~~several ~~placed~~states (and ~~the~~Washington ~~odds quoted~~D.C.) ~~Odds~~have ~~are~~legalized ~~determined~~online ~~with the~~sports ~~objective~~betting. ofTo ~~providing an average return to~~ the ~~bookmaker~~extent ~~over~~new areal ~~large~~money ~~number~~gaming ofor ~~events~~sports ~~and~~betting ~~therefore,~~jurisdictions ~~over~~are ~~the~~established ~~long~~or ~~term~~expanded, ~~our~~ ~~gross~~we ~~win~~cannot ~~percentage~~guarantee ~~has~~that ~~remained~~we ~~fairly~~will ~~constant. However, there can~~ be ~~significant~~successful ~~variation~~ in ~~gross~~penetrating ~~win~~such ~~percentage~~new ~~event- by-event~~jurisdictions ~~and~~or ~~day-by-day.~~expanding Weour ~~have~~business ~~systems~~or ~~and~~user ~~controls~~base ~~that~~in ~~seek~~line towith ~~reduce~~ the ~~risk~~growth of ~~daily~~existing ~~losses~~jurisdictions. ~~occurring~~If onwe aare ~~gross-win~~unable ~~basis, but~~to ~~there~~effectively ~~can~~develop beand nooperate ~~assurance~~directly ~~that~~or ~~these~~indirectly ~~will~~within bethese ~~effective~~new injurisdictions ~~reducing~~or if our ~~exposure,~~competitors ~~and~~are ~~consequently~~able ~~our~~to ~~exposure~~successfully topenetrate ~~this~~geographic ~~risk in~~jurisdictions ~~the~~that ~~future.~~we Ascannot aaccess ~~result,~~or inwhere ~~the~~we ~~short~~face ~~term~~other restrictions, there iscould ~~less~~be ~~certainty~~a ofmaterial ~~generating~~adverse aeffect ~~positive~~on ~~gross~~our ~~win~~business, ~~and~~operating weresults ~~may experience (~~and wefinancial ~~have~~condition. ~~from~~Our ~~time~~failure to ~~time~~obtain ~~experienced)~~or ~~significant~~maintain ~~losses~~the ~~with~~necessary ~~respect~~regulatory toapprovals ~~individual~~in ~~events~~jurisdictions, orwhether ~~betting~~individually ~~outcomes~~or collectively, inwould ~~particular if~~have ~~large~~a ~~individual~~material ~~bets~~adverse ~~are~~effect ~~placed~~ on anour ~~event~~business. orSee ~~betting~~“Business ~~outcome~~— orGovernment ~~series of events or betting outcomes~~Regulation.” ~~Odds~~To ~~compilers~~expand ~~and risk~~into ~~managers~~new ~~are capable of human error~~jurisdictions, ~~thus~~we ~~even~~may ~~allowing~~need ~~for~~to ~~the~~be ~~fact~~licensed ~~that~~and aobtain ~~number~~approvals of ~~betting~~our ~~products~~product ~~are subject to capped pay-outs, significant volatility can occur~~offerings. InThis ~~addition, it~~ is ~~possible that there may be such~~ a ~~high~~time-consuming ~~volume~~process ~~of trading during any particular period~~ that ~~even~~can ~~automated systems would~~ be ~~unable to address and eradicate all risks~~costly. Any ~~significant~~delays ~~losses~~in ~~on a~~obtaining ~~gross-~~or ~~win~~difficulty ~~basis~~in ~~could~~maintaining ~~have~~regulatory aapprovals ~~material~~needed ~~adverse~~for ~~effect~~expansion onwithin ~~our~~existing ~~business,~~jurisdictions ~~financial condition and results of operations. In addition, if a jurisdiction where we hold~~ or ~~wish~~into tonew ~~apply~~jurisdictions ~~for~~can anegatively ~~license~~affect ~~imposes~~our aopportunities ~~high turnover tax~~ for ~~betting~~growth, ~~(as~~including ~~opposed~~the togrowth aof ~~gross-win tax),~~our ~~this~~customer ~~too would impact profitability~~base, ~~particularly~~or ~~with~~delay ~~high~~our ~~value/low~~ability ~~margin~~to ~~bets,~~recognize ~~and~~revenue ~~likewise~~from ~~have~~our aofferings ~~material~~in ~~adverse effect~~any onsuch ~~our business~~jurisdictions.

33Future legislative and regulatory action, and court decisions or other governmental action, may have a material impact on our operations and financial results. Governmental authorities could view us as having violated local laws, despite our efforts to obtain all applicable licenses or approvals. There is also a risk that civil and criminal proceedings, including class actions, brought by or on behalf of prosecutors or public entities or incumbent monopoly providers, or private individuals, could be initiated against us, Internet service providers, credit card and other payment processors, advertisers and others involved in the DFS, Sportsbook and iGaming industries. Such potential proceedings could involve substantial litigation expense, penalties, fines, seizure of assets, injunctions or other restrictions being imposed upon us or our licensees or other business partners, while diverting the attention of key executives. Such proceedings could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as impact our reputation.

~~Palpable~~There ~~(obvious)~~can ~~errors~~be inno ~~Sportsbook odds~~assurance ~~making~~that ~~may~~legally ~~occasionally~~enforceable ~~occur~~legislation will not be proposed and passed in ~~the~~jurisdictions ~~normal~~relevant ~~course~~or ofpotentially relevant to our business to prohibit, ~~sometimes~~legislate ~~for~~or ~~large~~regulate ~~liabilities~~various aspects of the DFS, iGaming and Sportsbook industries (or that existing laws in those jurisdictions will not be interpreted negatively). ~~While~~Compliance itwith isany such legislation may have a ~~worldwide standard~~material adverse effect on our business, ~~practice~~financial tocondition ~~void~~and ~~bets~~results ~~associated~~of ~~with~~operations, ~~palpable~~either ~~errors~~as ora toresult ~~correct~~of ~~the~~our ~~odds~~determination that a jurisdiction should be blocked, ~~there~~or isbecause noa ~~guarantee~~local ~~regulators will~~license ~~approve~~or ~~voiding~~approval ~~palpable~~may ~~errors~~be incostly ~~every~~for ~~case~~us or our business partners to obtain and/or such licenses or approvals may contain other commercially undesirable conditions.

~~Our~~In ~~Sportsbook~~the ~~offers a~~context ~~huge~~of ~~spectrum~~our ofEU-facing ~~betting~~operations, ~~markets~~we ~~across~~may ~~dozens~~be ofsubject ~~sports,~~to ~~and~~specific compliance obligations under the ~~odds~~General ~~are~~Data ~~set~~Protection ~~through~~Regulation a(EU) ~~combination~~2016/679 of(the ~~algorithmic~~“GDPR”) and ~~manual odds~~associated ~~making.~~laws ~~Bet~~and ~~acceptance~~regulations isin ~~also~~different aEU ~~combination~~Member ofStates ~~automatic~~in ~~and~~which ~~manual~~we ~~acceptance~~operate. In ~~some cases~~addition, ~~the~~portions ~~odds~~of ~~offered~~our onbusiness established outside the ~~website constitute~~EU anmay ~~obvious~~be ~~error.~~required ~~Examples~~to ofcomply ~~such~~with ~~errors~~the ~~are~~requirements ~~inverted~~of ~~lines~~the ~~between~~GDPR ~~teams,~~and orassociated ~~odds~~EU ~~that~~legislation ~~are~~with ~~significantly~~respect ~~different from~~to the ~~true~~offering ~~odds~~ of products or services to, or the ~~outcome~~monitoring of, individuals in athe ~~way~~EU. ~~that~~We ~~all~~may ~~reasonable~~also ~~persons~~be ~~would~~subject ~~agree~~to isthe anlocal ~~error.~~privacy Itand isdata ~~commonplace~~protection ~~virtually~~laws ~~worldwide for~~of ~~operators~~the toEU ~~void~~Member ~~bets~~States ~~associated~~in ~~with~~which ~~such~~we ~~palpable~~offer ~~errors,~~products ~~and~~or inservices. ~~most~~Failure ~~mature~~to ~~jurisdictions~~comply with these ~~bets~~EU data protection and privacy laws, can becarry ~~voided~~penalties ~~without regulatory~~and ~~approval~~potential atcriminal ~~operator~~sanctions, ~~discretion.~~as Inwell as the Urisk of litigation.S. In addition, itDirective is2002/58/EC ~~unclear~~(as ~~long~~amended ~~term~~by ifDirective ~~state~~2009/136/EC) (together, the “e-~~by-state~~Privacy ~~regulators~~Directive”) ~~will~~governs, ~~consistently approve~~among ~~voids~~other orthings, ~~re-setting~~the ~~odds~~use toof ~~correct~~cookies ~~odds~~and onthe ~~such~~sending ~~bets.~~of Inelectronic ~~some~~direct ~~cases~~marketing within the European Union and, weas ~~require~~such, ~~regulatory~~will ~~approval~~apply to ~~void~~our ~~palpable errors~~marketing ~~ahead~~activities ofwithin ~~time~~the EU. IfFollowing ~~regulators~~Brexit, ~~were~~the toUK ~~not~~has ~~allow~~adopted ~~voiding~~its ofown ~~bets~~data ~~associated~~protection ~~with~~and ~~large~~direct ~~obvious~~marketing ~~errors~~laws in(the ~~odds~~"UK ~~making,~~data ~~we could~~protection laws") which are currently based on the corresponding EU legislation. Our UK-facing operations may therefore be subject to ~~covering~~specific ~~significant~~compliance ~~liabilities~~obligations under the UK data protection laws.

WeIn ~~follow~~our ~~the~~efforts ~~industry~~to ~~practice of~~comply ~~restricting~~with ~~and~~these ~~managing~~requirements, ~~betting~~we ~~limits~~rely aton positions and interpretations of the ~~individual~~law ~~customer~~that ~~level~~have ~~based~~yet onto ~~individual~~be ~~customer~~fully ~~profiles~~tested before the relevant courts and ~~risk~~regulators. ~~level~~ While the UK data protection laws are currently similar to the ~~enterprise~~corresponding EU laws, it is possible that those laws will diverge in the future; ~~however~~to ~~there~~the extent that those laws do diverge, then that may increase the costs of maintaining regulatory compliance. There is noalso ~~guarantee~~a risk that ~~states~~it ~~will~~may ~~allow~~become ~~operators~~more ~~such~~difficult to make cross-border transfers of personal data, as a result of diverging data protection regimes in the territories where our customers are located and the territories where our operations are based. If a regulator or court of competent jurisdiction determined that one or more of our compliance efforts does not satisfy the applicable requirements of the GDPR or the e-Privacy Directive, or the UK data protection laws, or if any party brought a claim in this regard, there could be potential governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation or public statements against us by consumer advocacy groups or others, and that could cause customers to ~~limit~~lose ontrust ~~the~~in ~~individual~~us ~~customer level~~and damage our reputation. Likewise, a change in guidance could be costly and have an adverse effect on our business.

~~Similar~~Our togrowth aprospects ~~credit card~~depend ~~company managing individual risk~~ on the ~~customer~~legal ~~level~~status ~~through~~of ~~credit~~real-money ~~limits,~~gaming itin isvarious ~~customary~~jurisdictions, ~~for~~predominantly ~~sports~~within ~~betting operators to manage customer betting limits at~~ the ~~individual~~United ~~level to manage enterprise risk levels. We believe this practice is beneficial overall~~States, ~~because~~and iflegalization itmay ~~were~~ not ~~possible,~~occur ~~the~~in ~~betting~~as ~~options~~many ~~would~~states beas ~~restricted~~we ~~globally and limits available to customers would be much lower to insulate overall risk due to the existence of a very small segment of highly sophisticated syndicates and algorithmic bettors~~expect, or ~~bettors~~may ~~looking~~occur toat ~~take~~a ~~advantage~~slower ofpace ~~site~~than ~~errors~~we ~~and omissions~~anticipate. WeAdditionally, ~~believe~~even ~~virtually~~if ~~all~~jurisdictions ~~operators~~legalize ~~balance~~real ~~taking reasonable~~money ~~action~~gaming, ~~from~~this ~~all~~may ~~customers~~be ~~against~~accompanied ~~the~~by ~~risk~~legislative ofor ~~individual~~regulatory ~~customers~~restrictions ~~significantly~~and/or ~~harming~~taxes ~~the business viability. We cannot assure you~~ that ~~all~~make ~~state~~it ~~legislation~~impracticable ~~and~~or ~~regulators~~less ~~will~~attractive ~~always allow operators~~ to ~~execute~~operate ~~limits~~in atthose ~~the individual customer level~~jurisdictions, or atthe ~~their sole discretion.~~

Negative events or negative media coverage relating to, or a declining popularity of, daily fantasy sports, sports betting, the underlying sports or athletes, online sports betting or iGaming in particular, or other negative coverage may adversely impact our ability to retain or attract users, which could have an adverse impact on our business.30

~~Public~~process ~~opinion can significantly influence our business. Unfavorable publicity regarding us, for example, our product changes, product quality, litigation, or regulatory activity, or regarding the actions~~ of ~~third~~implementing ~~parties~~regulations ~~with whom we have relationships~~ or ~~the~~securing ~~underlying sports (including declining popularity of~~ the ~~sports~~necessary orlicenses ~~athletes)~~to ~~could~~operate ~~seriously~~in ~~harm our reputation. In addition,~~ a ~~negative~~particular ~~shift~~jurisdiction inmay ~~the~~take ~~perception of~~longer ~~sports~~than betting and iGaming by the public or by politicians, lobbyists or others could affect future legislation of sports betting and iGaming, which could cause jurisdictions to abandon proposals to legalize sports betting and iGaming, thereby limiting the number of jurisdictions in which we ~~can operate. Furthermore~~anticipate, illegal betting activity by athletes could result in negative publicity for our industry and could harm our brand reputation. Negative public perception could also lead to new restrictions on or to the prohibition of iGaming or sports betting in jurisdictions in which ~~we currently operate. Such negative publicity~~ could ~~also~~ adversely affect ~~the~~our ~~size,~~future ~~demographics,~~results ~~engagement, and loyalty~~ of ~~our~~operations ~~customer base~~ and ~~result~~make init ~~decreased~~more ~~revenue~~difficult orto ~~slower user~~meet ~~growth~~our ~~rates,~~expectations ~~which~~for ~~could~~financial ~~seriously harm our business~~performance.

WeA ~~may~~number of states have ~~difficulty~~legalized, ~~accessing~~ or are currently considering legalizing, real money gaming, and our business, financial condition, results of operations and prospects are significantly dependent upon legalization of real money gaming. Our business plan is partially based upon the ~~service~~legalization of ~~banks~~real money gaming for a specific percent of the population on a yearly basis and the legalization may not occur as we have anticipated. Additionally, ~~credit~~if ~~card~~a ~~issuers~~large number of additional states or the federal government enact real money gaming legislation and ~~payment~~we ~~processing~~are ~~services~~unable ~~providers~~to obtain, ~~which~~or ~~may~~are ~~make~~otherwise itdelayed ~~difficult~~in obtaining the necessary licenses to ~~sell~~operate online sports betting or iGaming websites in U.S. jurisdictions where such games are legalized, our ~~products~~ future growth in online sports betting and ~~services~~iGaming could be materially impaired.

~~Although~~As ~~financial~~we ~~institutions~~enter ~~and~~into ~~payment~~new ~~processors~~jurisdictions, ~~are~~states ~~permitted to~~or ~~provide~~the ~~services~~federal togovernment usmay ~~and~~legalize ~~others~~real money gaming in ~~our~~a ~~industry,~~manner ~~banks~~that is unfavorable to us. As a result, ~~credit~~we ~~card~~may ~~issuers~~encounter legal, regulatory and ~~payment~~political ~~processing~~challenges ~~service~~that ~~providers~~are ~~may~~difficult ~~be hesitant~~or impossible to ~~offer~~foresee ~~banking~~ and ~~payment~~which ~~processing~~could ~~services~~result toin ~~real~~an ~~money~~unforeseen ~~gaming~~adverse ~~and~~impact ~~fantasy~~on ~~sports~~planned ~~businesses~~revenues or costs associated with the new opportunity. ~~Consequently~~For example, ~~those businesses~~certain ~~involved~~states inrequire ~~our~~us ~~industry~~to have a relationship with a retail operator for online Sportsbook access, ~~including~~which tends to increase our ~~own,~~costs of revenue. States that have established state-run monopolies may ~~encounter~~limit ~~difficulties~~opportunities infor ~~establishing~~private ~~and~~sector ~~maintaining~~participants ~~banking~~like ~~and payment~~us. ~~processing~~States ~~relationships~~also ~~with~~impose asubstantial ~~full~~tax ~~scope~~rates ofon ~~services~~online sports betting and ~~generating~~iGaming ~~market~~revenue, ~~rate~~in ~~interest.~~addition Ifto wethe ~~were~~federal ~~unable~~excise totax ~~maintain our~~of ~~bank~~25 ~~accounts~~basis orpoints ~~our~~on ~~users~~the ~~were~~amount ~~unable~~of each wager. As most state product taxes apply to ~~use~~various ~~their~~measures ~~credit~~of ~~cards~~modified gross profit, ~~bank~~tax ~~accounts~~rates, orwhether efederal-~~wallets~~ toor ~~make~~state-based, ~~deposits~~that ~~and~~are ~~withdrawals from~~higher ~~our~~than ~~offerings~~we itexpect ~~would~~will make it ~~difficult~~more ~~for~~costly usand toless ~~operate~~desirable ~~our~~for ~~business,~~us ~~increase~~to ~~our~~launch ~~operating~~in ~~costs,~~a ~~and~~given ~~pose additional operational~~jurisdiction, ~~logistical~~while ~~and~~tax ~~security~~increases ~~challenges~~in ~~which~~any ~~could~~of ~~result~~our inexisting anjurisdictions ~~inability~~may toadversely ~~implement~~impact our ~~business plan~~profitability.

34 Therefore, even in cases in which a jurisdiction purports to license and regulate DFS, Sportsbook or iGaming, the licensing and regulatory regimes can vary considerably in terms of their business-friendliness and at times may be intended to provide incumbent operators with advantages over new licensees. Therefore, some “liberalized” regulatory regimes are considerably more commercially attractive than others.

~~The~~Failure to comply with regulatory requirements ofin ~~being~~a particular jurisdiction, or the failure to successfully obtain a ~~public company~~license ~~may~~or ~~strain~~permit applied for in a particular jurisdiction, could impact our ~~resources~~ability to comply with licensing and ~~divert~~regulatory ~~management’s~~requirements ~~attention~~in other jurisdictions, ~~and~~or could cause the ~~increases~~rejection of license applications or cancellation of existing licenses in ~~legal~~other jurisdictions, ~~accounting~~or could cause financial institutions, online and ~~compliance expenses~~mobile ~~may~~platforms, beadvertisers ~~greater~~and ~~than~~distributors to stop providing services to us which we ~~anticipate~~rely upon to receive payments from, or distribute amounts to, our users, or otherwise to deliver and promote our services.

WeCompliance ~~became~~with ~~a public company following~~ the ~~Closing~~various ofregulations ~~the~~applicable ~~Business~~to ~~Combination,~~fantasy ~~and~~sports ~~as such, have incurred,~~ and ~~will~~real ~~continue~~money togaming ~~incur,~~is ~~significant legal,~~costly ~~accounting~~ and ~~other expenses that DraftKings and SBT did not incur as private companies~~time-consuming. WeRegulatory ~~are~~authorities ~~subject~~at to the ~~reporting requirements~~non-U.S., ofU.S. ~~the Exchange Act~~federal, state and ~~are~~local ~~required~~levels tohave ~~comply~~broad powers with ~~the~~respect ~~applicable~~to ~~requirements of~~ the ~~Sarbanes-Oxley~~regulation ~~Act~~ and ~~the Dodd-Frank~~licensing ~~Wall~~of ~~Street~~fantasy ~~Reform~~sports and ~~Consumer~~real ~~Protection~~money ~~Act,~~gaming asoperations ~~well as the rules~~ and ~~regulations~~may ~~subsequently~~revoke, ~~implemented by~~suspend, ~~the~~condition ~~SEC~~or ~~and~~limit ~~the~~our ~~listing~~fantasy ~~standards~~sports ofor ~~The~~real ~~Nasdaq~~money ~~Stock~~gaming ~~Market~~licenses, ~~including~~impose ~~changes~~substantial infines ~~corporate~~on ~~governance~~us ~~practices~~ and ~~the~~take ~~establishment and maintenance of effective disclosure and financial controls. Compliance with these rules and regulations can be burdensome. Our management and~~ other ~~personnel~~actions, ~~need~~any toone ~~devote a substantial amount~~ of ~~time~~which tocould ~~these~~have ~~compliance~~a ~~initiatives.~~material ~~Moreover,~~adverse ~~these rules and~~effect ~~regulations~~on ~~will increase~~ our ~~historical~~business, ~~legal and~~ financial ~~compliance~~condition, ~~costs~~results ~~and~~of ~~will~~operations ~~make some activities more time-consuming~~ and ~~costly~~prospects. ~~For~~These ~~example,~~laws ~~we expect that these rules~~ and regulations ~~may~~are ~~make~~dynamic ~~it more difficult~~ and ~~more~~subject ~~expensive for~~to uspotentially todiffering ~~attract~~interpretations, and ~~retain~~various ~~qualified~~legislative ~~members of our Board as compared to DraftKings~~ and ~~SBT~~regulatory asbodies ~~private~~may ~~companies.~~expand ~~Additionally, as~~current welaws ~~are~~or noregulations ~~longer~~or anenact ~~“emerging~~new ~~growth~~laws ~~company”,~~and weregulations ~~have~~regarding ~~incurred~~these ~~significant~~matters. ~~expenses~~We ~~and~~will ~~devoted~~strive ~~substantial~~to ~~management effort~~comply ~~toward ensuring compliance~~ with ~~the~~all ~~requirements~~applicable oflaws ~~Section 404 of the Sarbanes-Oxley Act~~ and ~~expect~~regulations torelating ~~continue~~ to do soour ~~in the future~~business. WeIt ~~will~~is ~~need~~possible, tohowever, ~~continue~~that tothese ~~hire~~requirements ~~additional~~may ~~accounting~~be ~~and~~interpreted ~~financial staff,~~ and ~~engage~~applied ~~outside~~in ~~consultants, all~~a ~~with~~manner ~~appropriate~~that ~~public~~is ~~company~~inconsistent ~~experience~~from ~~and~~one ~~technical~~jurisdiction ~~accounting~~to ~~knowledge~~another and ~~maintain~~may anconflict ~~internal~~with ~~audit~~other ~~function,~~rules. ~~which will~~Non-compliance ~~increase~~with ~~our~~any ~~operating~~such ~~expenses.~~law ~~Moreover,~~or weregulations could ~~incur~~expose ~~additional~~us ~~compensation costs in the event that we decide~~ to ~~pay cash~~claims, ~~compensation closer to that of other publicly-listed companies~~proceedings, ~~which~~litigation ~~would increase our general~~ and ~~administrative~~investigations ~~expenses and~~by ~~could~~private ~~materially~~parties and ~~adversely~~regulatory ~~affect~~authorities, ~~our~~as ~~profitability.~~well Weas ~~are~~substantial ~~evaluating~~fines ~~these rules~~ and ~~regulations~~negative publicity, ~~and~~each ~~cannot predict or estimate the amount~~ of ~~additional~~which ~~costs we~~ may ~~incur~~materially orand ~~the~~adversely ~~timing~~affect ofour ~~such costs~~business.

~~Failure~~Any tofantasy ~~maintain~~sports ~~adequate~~or ~~financial~~real money gaming license could be revoked, ~~information~~ ~~technology~~suspended ~~and~~or ~~management~~conditioned ~~processes~~at ~~and~~any ~~controls~~time. The loss of a license in one jurisdiction could ~~result~~trigger the loss of a license or affect our eligibility for such a license in ~~material~~another ~~weaknesses~~jurisdiction, ~~which~~and any of such losses, or potential for such loss, could ~~lead~~cause us to ~~errors~~cease in offering some or all of our ~~financial~~offerings ~~reporting~~in the impacted jurisdictions. We may be unable to obtain or maintain all necessary registrations, licenses, permits or approvals, and could incur fines or experience delays related to the licensing process, which could adversely affect our ~~business~~operations. ~~now~~Our delay or failure to obtain or maintain licenses in any jurisdiction may prevent us from distributing our offerings, increasing our customer base and/or generating revenues. We cannot assure you that we ~~are~~will be able to obtain and maintain the licenses and related approvals necessary to conduct our DFS, Sportsbook and iGaming operations. Any failure to maintain or renew our existing licenses, registrations, permits or approvals could have a ~~public~~material ~~company~~adverse effect on our business, financial condition, results of operations and prospects.

Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud. If we are unable to maintain adequate internal controls over financial reporting, our business and operating results could be harmed. Effective December 31, 2020, we are no longer an “emerging growth company”, and therefore under applicable SEC rules we must maintain internal controls over financial reporting to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the related rules of the SEC, which require, among other things, our management to assess annually the effectiveness of our internal control over financial reporting and our independent registered public accounting firm to issue a report on the effectiveness of internal control over financial reporting with our Annual Report.

~~The~~Our ~~internal~~growth ~~control assessment~~prospects ~~required by Section 404 of Sarbanes-Oxley may divert internal resources~~ and wemarket ~~may~~potential ~~experience~~will ~~higher~~depend ~~operating expenses,~~on ~~higher~~our ~~independent~~ability ~~auditor~~to ~~and~~obtain ~~consulting~~licenses ~~fees during the implementation of these changes. We may not be able~~ to ~~complete our~~operate ~~evaluation, testing and any required remediation~~ in a ~~timely~~number ~~fashion.~~of Injurisdictions ~~addition, our current controls~~ and ~~any~~if ~~new controls that~~ we ~~develop~~fail ~~may~~to ~~become~~obtain ~~inadequate~~such ~~because~~licenses ~~of poor design and changes in~~ our business, ~~including increased complexity resulting from any international expansion. Any failure to implement and maintain effective internal controls over~~ financial ~~reporting~~condition, ~~could adversely affect the~~ results of ~~assessments~~operations ~~by our independent registered public accounting firm~~ and ~~their~~prospects ~~attestation~~could ~~reports~~be impaired.

~~If we~~Our ~~are~~ability ~~unable~~ to ~~certify~~grow ~~the~~our ~~effectiveness~~business ofwill depend on our ~~internal~~ability ~~controls,~~to orobtain ifand maintain licenses to offer our ~~internal~~product ~~controls~~offerings ~~have~~in a ~~material~~large ~~weakness,~~number ~~we may~~of ~~not~~jurisdictions ~~detect~~or ~~errors~~in ~~timely,~~heavily ~~our~~populated ~~consolidated~~jurisdictions. ~~financial~~If ~~statements~~we ~~could~~fail beto ~~misstated,~~obtain weand ~~could~~maintain belicenses ~~subject~~in tolarge ~~regulatory scrutiny~~jurisdictions ~~and~~or in a ~~loss~~greater number of ~~confidence~~mid-market ~~by stakeholders~~jurisdictions, ~~which~~this ~~could~~may ~~harm~~prevent ~~our~~us ~~business~~from ~~and~~expanding ~~adversely~~the ~~affect~~footprint ~~the~~of ~~market~~our ~~price~~product ofofferings, increasing our ~~common~~ ~~stock~~user base and/or generating revenues. ~~Failure~~We cannot be certain that we will be able to ~~comply~~obtain ~~with~~and ~~Section 404~~maintain oflicenses ~~Sarbanes-Oxley~~and ~~could~~related ~~potentially~~approvals ~~subject~~necessary usto conduct our DFS, Sportsbook and iGaming operations. Any failure to ~~sanctions~~obtain orand ~~investigations by~~maintain ~~the~~licenses, ~~SEC~~registrations, ~~FINRA~~permits or ~~other~~approvals ~~regulatory~~could ~~authorities,~~have asa ~~well~~material asadverse ~~increase~~effect ~~the~~on ~~risk~~our ofbusiness, ~~liability~~financial ~~arising~~condition, ~~from~~results ~~litigation~~of ~~based~~operations ~~on securities~~and ~~law~~prospects.

~~Continued~~We ~~growth~~have been, and ~~success~~continue ~~will depend~~to onbe, the ~~performance~~subject of ~~our~~governmental ~~current~~investigations and ~~future~~inquiries ~~employees,~~with ~~including~~respect ~~certain~~to ~~key~~the ~~employees.~~operation ~~Recruitment~~of ~~and~~our ~~retention~~businesses ofand ~~these individuals~~we iscould ~~vital~~be subject to ~~growing~~future ~~our~~governmental ~~business~~investigations and ~~meeting~~inquiries, ~~our~~legal ~~business~~proceedings ~~plans.~~and ~~The~~enforcement ~~loss~~actions. ofAny ~~any~~such ofinvestigation, ~~our~~inquiry, ~~key~~proceeding ~~executives~~ or ~~other~~action, ~~key employees~~ could ~~harm~~adversely affect our business.

We ~~depend~~have onreceived aformal ~~limited number of key personnel to manage~~ and ~~operate~~informal ~~our~~inquiries ~~business,~~from ~~including~~time ~~DraftKings’~~to ~~co-founders~~time, ~~our~~from ~~Chief~~government ~~Financial~~authorities ~~Officer~~ and ~~our~~regulators, ~~Chief~~including ~~Legal~~tax ~~Officer.~~authorities ~~The~~and ~~leadership~~gaming ofregulators, ~~these~~regarding ~~key~~compliance ~~personnel~~with ~~was~~laws aand ~~critical~~other ~~element~~matters, ~~of Old DK’s success~~ and we ~~expect that~~may receive such ~~leadership~~inquiries ~~will~~in ~~continue~~the tofuture, beparticularly aas ~~critical~~we ~~element~~grow ofand ~~DraftKings’~~expand ~~future~~our ~~success~~operations. ~~The~~Violation ~~departure,~~of ~~death~~existing or ~~disability of~~future ~~any~~regulations, ~~one~~regulatory oforders ~~our executive officers~~ or ~~other~~consent ~~extended~~decrees orcould ~~permanent~~subject ~~loss~~us ofto ~~any~~substantial ofmonetary ~~their~~fines ~~services,~~and orother ~~any~~penalties ~~negative~~that ~~market~~could ornegatively ~~industry perception~~affect ~~with~~our ~~respect~~financial tocondition ~~any~~and results of ~~them~~operations. orIn ~~their loss~~addition, ~~could~~it ~~have~~is apossible ~~material~~that ~~adverse~~future ~~effect~~orders onissued ~~our~~by, ~~business.~~or Weinquiries ~~are~~or ~~the~~enforcement ~~beneficiary of~~actions ainitiated $2by, ~~million~~government ~~key~~or ~~man~~regulatory ~~insurance~~authorities ~~policy~~could ~~covering~~cause ~~our~~us ~~Chief~~to ~~Executive~~incur ~~Officer~~substantial costs, ~~but~~expose weus ~~are~~to ~~not~~unanticipated ~~protected~~liability byor ~~key~~penalties, ~~man~~ or ~~similar life~~require ~~insurance~~us ~~covering~~to ~~other~~change ~~executive~~our ~~officers~~business orpractices ~~members~~in ofa ~~senior~~manner ~~management~~materially adverse to our business.

35 Participation in the sports betting industry exposes us to trading, liability management and pricing risk. We may experience lower than expected profitability and potentially significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of its sports risk management processes.

InOur ~~addition,~~fixed-odds ~~certain of~~betting ~~our~~products ~~other~~involve ~~employees~~betting ~~have~~where ~~made~~winnings ~~significant~~are ~~contributions~~paid toon ~~our~~the ~~growth~~basis ~~and~~of ~~success.~~the Westake ~~believe~~placed ~~our~~and ~~success~~the ~~and~~odds ~~our~~quoted. ~~ability~~Odds ~~to compete~~are ~~and~~determined ~~grow~~with ~~will~~the ~~depend~~objective inof ~~large~~providing ~~part~~an onaverage return to the ~~efforts~~bookmaker ~~and~~over ~~talents~~a oflarge ~~our~~number ~~employees~~of events and ontherefore, over the long term, our ~~ability~~gross towin ~~retain~~percentage ~~highly~~has ~~skilled personnel~~remained fairly constant. ~~The~~However, ~~competition~~there ~~for~~can ~~these~~be ~~types~~significant ofvariation ~~personnel~~in isgross ~~intense~~win percentage event- by-event and weday-by-day. ~~compete~~We ~~with~~have ~~other~~systems ~~potential~~and ~~employers~~controls ~~for~~that seek to reduce the ~~services~~ risk of ~~our~~daily ~~employees.~~losses Asoccurring on a ~~result~~gross-win basis, webut ~~may~~there ~~not~~can ~~succeed~~be no assurance that these will be effective in ~~retaining~~reducing ~~the~~our ~~executives~~exposure, and ~~other~~consequently ~~key~~our ~~employees~~exposure ~~that~~to wethis ~~need~~risk in the future. ~~Employees~~As a result, ~~particularly~~ ~~analysts~~in ~~and~~the ~~engineers~~short term, ~~are~~there inis ~~high~~less ~~demand~~certainty of generating a positive gross win, and we ~~devote~~may experience (and we have from time to time experienced) significant ~~resources~~losses with respect to ~~identifying,~~individual ~~hiring,~~events ~~training~~or betting outcomes, ~~successfully~~ ~~integrating~~in ~~and~~particular ~~retaining~~if ~~these~~large ~~employees.~~individual Webets ~~cannot~~are ~~provide~~placed ~~assurance~~on ~~that~~an weevent ~~will~~or bebetting ~~able~~outcome toor ~~attract~~series of events or ~~retain such~~betting ~~highly~~outcomes. ~~qualified~~Odds ~~personnel~~compilers inand risk managers are capable of human error, thus even allowing for the ~~future~~fact that a number of betting products are subject to capped pay-outs, significant volatility can occur. In addition, ~~the~~it ~~loss~~is possible that there may be such a high volume of ~~employees~~trading orduring ~~the~~any ~~inability~~particular period that even automated systems would be unable to ~~hire~~address ~~additional~~and ~~skilled employees~~eradicate asall ~~necessary~~risks. Any significant losses on a gross- win basis could ~~result~~have ina ~~significant~~material ~~disruptions~~adverse toeffect on our business, ~~and~~financial ~~the~~condition ~~integration~~and results of ~~replacement~~operations. ~~personnel~~In ~~could be~~addition, ~~time~~if a jurisdiction where we hold or wish to apply for a license imposes a high turnover tax for betting (as opposed to a gross-~~consuming~~win ~~and~~tax), ~~expensive~~this too would impact profitability, particularly with high value/low margin bets, and ~~cause~~likewise ~~additional~~have ~~disruptions~~a tomaterial adverse effect on our business.

~~All~~Palpable of(obvious) ~~our~~errors ~~named executive~~in ~~officers~~Sportsbook ~~are~~odds ~~employees-at-will.~~making ~~The~~may ~~unexpected~~occasionally ~~loss~~occur ofin ~~services~~the ofnormal ~~one~~course orof ~~more~~business, ofsometimes ~~these~~for ~~key~~large ~~employees~~liabilities. ~~could~~While ~~have~~it is a ~~material adverse~~worldwide ~~effect~~standard onbusiness ~~our~~practice ~~business,~~to ~~financial~~void ~~condition~~bets associated with palpable errors or to correct the odds, ~~results~~there ofis ~~operations~~no ~~and~~guarantee ~~prospects~~regulators will approve voiding palpable errors in every case.

~~Additionally~~Our Sportsbook offers a huge spectrum of betting markets across dozens of sports, ~~as we~~and ~~grow~~the odds are set through a combination of algorithmic and ~~develop~~manual ~~the~~odds ~~infrastructure~~making. asBet acceptance is also a ~~public~~combination ~~company~~of automatic and manual acceptance. In some cases, wethe ~~may~~odds ~~find~~offered iton ~~difficult~~the towebsite ~~maintain~~constitute ~~our~~an ~~entrepreneurial~~obvious error. Examples of such errors are inverted lines between teams, ~~innovative and~~or ~~team-based~~odds ~~culture.~~that ~~Our~~are ~~retention~~significantly ~~and~~different ~~recruiting~~from ~~may~~the ~~require~~true ~~significant~~odds ~~increases~~of the outcome in ~~compensation~~a ~~expense~~way asthat weall ~~transition~~ reasonable persons would agree is an error. It is commonplace virtually worldwide for operators to avoid ~~public~~bets ~~company~~associated with such palpable errors, ~~which~~and ~~would~~in ~~adversely~~most ~~affect~~mature ~~our~~jurisdictions ~~results~~these ofbets ~~operation~~can be voided without regulatory approval at operator discretion. ~~Moreover~~In the U.S., ~~there~~it ~~may~~is ~~also~~unclear belong ~~disparities~~term ofif ~~wealth between~~state-by-state ~~those~~regulators ofwill ~~our~~consistently ~~employees~~approve ~~who~~voids ~~were~~or ~~employees~~re-setting odds to correct odds on such bets. In some cases, we require regulatory approval to void palpable errors ahead of ~~DraftKings~~time. orIf ~~SBT~~regulators ~~prior~~were to ~~the~~not ~~Business~~allow ~~Combination~~voiding ~~and~~of ~~those~~bets ~~who~~associated ~~join~~with ~~us after~~large ~~the~~obvious ~~Closing,~~errors ~~which~~in ~~may~~odds ~~harm~~making, ~~our~~we ~~culture~~could ~~and~~be ~~relations~~subject ~~among~~to ~~employees~~covering significant liabilities.

If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow effectively and our business could be seriously harmed.32

InWe ~~some~~follow ~~jurisdictions our key executives, certain employees or other individuals related to~~ the ~~business~~industry ~~will~~practice beof ~~subject~~restricting toand ~~licensing~~managing orbetting ~~compliance~~limits ~~requirements.~~at ~~Failure by such individuals to obtain~~ the ~~necessary~~individual ~~licenses~~customer orlevel ~~comply~~based ~~with~~on individual ~~regulatory~~customer ~~obligations,~~profiles ~~could~~and ~~cause~~risk ~~the~~level ~~business~~ to bethe ~~non-compliant~~enterprise; ~~with~~however ~~its~~there ~~obligations,~~is orno ~~imperil~~guarantee ~~its~~that ~~ability~~states towill ~~obtain~~allow oroperators ~~maintain~~such ~~licenses~~as ~~necessary~~us ~~for the conduct of the business. In some cases, the remedy~~ to ~~such~~limit ~~situation~~on ~~may require~~ the ~~removal~~individual ofcustomer ~~a key executive or employee and the mandatory redemption or transfer of such person’s equity securities~~level.

AsSimilar ~~part~~to ofa ~~obtaining~~credit ~~real~~card ~~money~~company ~~gaming~~managing ~~licenses,~~individual ~~the~~risk ~~responsible gaming~~on ~~authority~~the ~~will~~customer ~~generally~~level ~~determine~~through ~~suitability~~credit ~~of certain directors~~limits, ~~officers~~it ~~and~~is ~~employees~~customary ~~and,~~for insports ~~some~~betting ~~instances,~~operators ~~significant shareholders.~~to ~~The~~manage ~~criteria~~customer ~~used~~betting bylimits ~~gaming~~at ~~authorities~~the toindividual ~~make~~level ~~determinations as~~ to ~~who~~manage ~~requires~~enterprise arisk ~~finding~~levels. ofWe ~~suitability~~believe orthis ~~the suitability~~practice ofis anbeneficial ~~applicant~~overall, tobecause ~~conduct~~if ~~gaming~~it ~~operations~~were ~~varies~~not ~~among jurisdictions~~possible, ~~but~~the ~~generally~~betting ~~requires~~options ~~extensive~~would ~~and~~be ~~detailed application~~restricted ~~disclosures~~globally ~~followed~~and bylimits aavailable ~~thorough~~to ~~investigation.~~customers Ifwould ~~any~~be ~~gaming~~much ~~authority~~lower ~~with~~to ~~jurisdiction~~insulate ~~over~~overall ~~our~~risk ~~business~~due ~~were~~ to ~~find~~the anexistence ~~applicable~~of ~~officer,~~a ~~director,~~very ~~employee~~small orsegment ~~significant~~of ~~shareholder~~highly ofsophisticated ~~ours~~syndicates ~~unsuitable~~and ~~for~~algorithmic ~~licensing~~bettors, or ~~unsuitable~~bettors looking to ~~continue~~ ~~having~~take aadvantage ~~relationship~~of ~~with~~site ~~us,~~errors weand ~~would~~omissions. beWe ~~required~~believe tovirtually ~~sever~~all ~~our~~operators ~~relationship~~balance ~~with~~taking ~~that~~reasonable ~~person.~~action ~~Furthermore,~~from ~~such~~all ~~gaming authorities~~customers ~~may~~against ~~require~~the usrisk toof ~~terminate~~individual customers significantly harming the ~~employment~~business ofviability. ~~any~~We ~~person~~cannot ~~who~~assure ~~refuses~~you tothat ~~file~~all ~~required~~state ~~applications.~~legislation ~~Either~~and ~~result~~regulators ~~could have~~will aalways ~~material~~allow ~~adverse~~operators ~~effect~~to onexecute ~~our~~limits ~~business~~at the individual customer level, ~~operations~~or ~~and~~at ~~prospects~~their sole discretion.

InNegative ~~addition,~~events ~~our amended~~or ~~and~~negative ~~restated~~media ~~articles~~coverage ofrelating ~~incorporation~~to, ~~provides~~or ~~that~~a ~~any~~declining popularity of, ~~our~~daily ~~common~~fantasy ~~stock~~sports, orsports ~~other~~betting, ~~equity~~the ~~securities~~underlying ~~owned~~sports or ~~controlled by~~athletes, ~~any~~online ~~stockholder~~sports ~~whom~~betting ~~the~~or ~~Board~~iGaming ~~determines~~ in ~~good~~particular, ~~faith~~or ~~(following~~other ~~consultation~~negative ~~with~~coverage ~~reputable~~may ~~outside~~adversely ~~gaming~~impact ~~regulatory~~our ~~counsel), pursuant~~ability to aretain ~~resolution~~or ~~adopted~~attract byusers, ~~the~~which ~~unanimous~~could ~~affirmative~~have ~~vote of all of the disinterested members of the Board, is~~ an ~~unsuitable person,~~adverse ~~will~~impact beon ~~subject~~our ~~to mandatory sale and transfer to either us or one or more third-party transferees~~business.

~~Additionally,~~Public aopinion ~~gaming regulatory~~can ~~body~~significantly ~~may~~influence ~~refuse~~our tobusiness. ~~issue~~Unfavorable orpublicity ~~renew~~regarding aus, ~~gaming~~for ~~license or restrict or condition the same~~example, ~~based on~~ our ~~present~~product ~~activities or~~changes, ~~the~~product ~~past~~quality, ~~activities of DraftKings or SBT~~litigation, or ~~the~~regulatory ~~past~~activity, or ~~present~~regarding ~~activities~~the actions of ~~their or our current or former directors, officers, employees, shareholders or~~ third parties with whom we have relationships, ~~which~~or ~~could~~the ~~adversely~~underlying ~~affect~~sports ~~our~~(including ~~operations~~declining orpopularity ~~financial condition.~~of Ifthe ~~additional~~sports ~~gaming~~or ~~regulations~~athletes) ~~are~~could ~~adopted~~seriously inharm aour ~~jurisdiction~~reputation. inIn ~~which we operate~~addition, ~~such~~a ~~regulations~~negative ~~could~~shift ~~impose~~in ~~restrictions or~~the ~~costs~~perception ~~that~~of ~~could~~sports ~~have~~betting aand ~~significant~~iGaming ~~adverse~~by ~~effect~~the onpublic ~~us.~~or ~~From~~by ~~time to time~~politicians, ~~various~~lobbyists ~~proposals~~or ~~are~~others ~~introduced~~could inaffect ~~the~~future ~~legislatures of~~legislation ~~some~~ of ~~the~~sports ~~jurisdictions~~betting inand iGaming, which wecould ~~have~~cause ~~existing~~jurisdictions orto ~~planned~~abandon ~~operations~~proposals ~~that,~~to iflegalize ~~enacted,~~sports ~~could~~betting ~~adversely~~and ~~affect our directors~~iGaming, ~~officers,~~ ~~key~~thereby ~~employees,~~limiting orthe ~~other~~number ~~aspects~~ of ~~our~~jurisdictions ~~operations.~~in Towhich ~~date,~~ we ~~have~~can ~~obtained~~operate. ~~all~~Furthermore, ~~governmental~~illegal ~~licenses,~~betting ~~findings~~activity ~~of suitability,~~by ~~registrations,~~athletes ~~permits~~could ~~and~~result ~~approvals~~in ~~necessary~~negative publicity for our ~~operations.~~industry ~~However,~~and wecould ~~can~~harm ~~give~~our nobrand ~~assurance~~reputation. ~~that~~Negative ~~any~~public ~~additional licenses,~~perception ~~permits~~could ~~and~~also ~~approvals~~lead ~~that~~to ~~may~~new berestrictions ~~required~~on ~~will be given~~ or ~~that~~to ~~existing~~the ~~ones~~prohibition ~~will~~of beiGaming ~~renewed~~ or ~~will~~sports ~~not~~betting bein ~~revoked. Renewal~~jurisdictions isin ~~subject~~which ~~to,~~we ~~among~~currently ~~other~~operate. ~~things,~~Such ~~continued~~negative ~~satisfaction~~publicity ofcould ~~suitability~~also ~~requirements~~adversely ofaffect ~~our~~the ~~directors~~size, ~~officers~~demographics, ~~key employees~~engagement, and ~~shareholders.~~loyalty ~~Any~~of ~~failure~~our tocustomer ~~renew~~base orand ~~maintain~~result ~~our~~in ~~licenses~~decreased revenue or toslower ~~receive~~user ~~new~~growth ~~licenses~~rates, ~~when~~which ~~necessary~~could ~~would~~seriously ~~have a~~harm ~~material~~our ~~adverse effect on us~~business.

36 We may have difficulty accessing the service of banks, credit card issuers and payment processing services providers, which may make it difficult to sell our products and services.

~~Due~~Although financial institutions and payment processors are permitted to ~~the~~provide ~~nature~~services ofto us and others in our ~~business~~industry, we ~~are~~banks, ~~subject~~credit tocard ~~taxation~~issuers inand apayment ~~number~~processing ofservice ~~jurisdictions~~providers may be hesitant to offer banking and ~~changes~~payment ~~in,~~processing orservices ~~new~~to ~~interpretations~~real ~~of,~~money ~~tax~~gaming ~~laws~~and fantasy sports businesses. Consequently, ~~tax~~those ~~rulings~~businesses orinvolved ~~their application~~in byour ~~tax~~industry, ~~authorities~~including ~~could~~our ~~result~~own, may encounter difficulties in ~~additional~~establishing ~~tax~~and ~~liabilities~~maintaining banking and ~~could~~payment ~~materially~~processing ~~affect~~relationships ~~our~~with ~~financial~~a ~~condition and~~full ~~results~~scope of ~~operations~~services and generating market rate interest. WeIf ~~are~~we ~~also~~were ~~subject~~unable to ~~periodic~~maintain ~~audits~~our ~~and~~bank ~~examinations~~accounts byor ~~the~~our ~~IRS~~users were unable to use their credit cards, asbank ~~well~~accounts asor ~~state~~e-wallets to make deposits and ~~local~~withdrawals ~~taxing authorities,~~from ~~the~~our ~~results~~offerings ofit ~~which~~would ~~may~~make ~~materially~~it ~~impact~~difficult for us to operate our ~~financial~~business, ~~statements~~increase inour ~~the~~operating ~~period~~costs, inand pose additional operational, logistical and security challenges which ~~the~~could ~~audit~~result orin ~~examination occurs~~an inability to implement our business plan.

~~Our~~The ~~tax~~requirements ~~obligations will be varied and include U.S. federal, state and international taxes due to the nature~~ of ~~our~~being ~~business.~~a ~~The~~public ~~tax~~company ~~laws~~may ~~that~~strain ~~will be applicable to~~ our ~~business~~resources ~~are subject to interpretation,~~ and ~~significant~~divert ~~judgment~~management’s ~~will be required in determining our worldwide provision for income taxes. In the course of our business~~attention, ~~there will be many transactions~~ and ~~calculations where~~ the ~~ultimate tax~~increases determination is uncertain. For example, compliance with the 2017 United States Tax Cuts and Jobs Act (“TCJA”) may require the collection of information not regularly produced within our Company, the use of estimates in ~~our consolidated financial statements~~legal, ~~and the exercise of significant judgment in~~ accounting ~~for its provisions. As regulations~~ and ~~guidance~~compliance ~~evolve with~~expenses ~~respect~~may tobe ~~the~~greater ~~TCJA,~~than ~~and as~~ we ~~gather more information and perform more analysis, our results may differ from previous estimates and may materially affect our consolidated financial statements~~anticipate.

~~The~~We ~~gaming~~became ~~industry represents~~ a ~~significant~~public ~~source~~company offollowing ~~tax~~the ~~revenue~~Closing toof the ~~jurisdictions~~Business inCombination, ~~which~~and weas such, have incurred, and will ~~operate.~~continue ~~Gaming~~to incur, significant legal, accounting and other expenses that DraftKings and SBT did not incur as private companies. We are subject to the reporting requirements of the Exchange Act, and ~~business-~~are required to comply with the applicable requirements of the Sarbanes-~~business providers~~Oxley inAct and the ~~gaming~~Dodd-Frank ~~industry~~Wall ~~(directly~~Street Reform and~~/or~~ ~~indirectly~~Consumer byProtection ~~way~~Act, ofas ~~their~~well ~~commercial~~as ~~relationships~~the ~~with~~rules and ~~operators)~~regulations ~~are~~subsequently ~~currently subject~~implemented toby ~~significant~~the ~~taxes~~SEC and ~~fees~~the inlisting ~~addition~~standards toof ~~normal~~The ~~corporate~~Nasdaq ~~income~~Stock ~~taxes~~Market, including changes in corporate governance practices and ~~such~~the ~~taxes~~establishment and ~~fees~~maintenance ~~are~~of ~~subject~~effective todisclosure ~~increase at~~and ~~any~~financial ~~time~~controls. ~~From~~Compliance ~~time~~with tothese ~~time,~~rules and ~~various~~regulations ~~legislators~~can be burdensome. Our management and other ~~government~~personnel ~~officials~~need ~~have~~to ~~proposed~~devote ~~and~~a ~~adopted~~substantial ~~changes~~amount inof ~~tax~~time ~~laws~~to these compliance initiatives. Moreover, or inthese ~~the~~rules and ~~administration~~regulations orwill ~~interpretation~~increase ofour ~~such~~historical ~~laws,~~legal ~~affecting~~and ~~the~~financial ~~gaming~~compliance ~~industry~~costs and will make some activities more time-consuming and costly. InFor ~~addition~~example, ~~any~~we ~~worsening~~expect ofthat ~~economic conditions~~these rules and ~~the~~regulations ~~large~~may ~~number~~make ofit ~~jurisdictions~~more ~~with~~difficult ~~significant~~and ~~current~~more orexpensive ~~projected~~for ~~budget~~us ~~deficits~~to ~~could~~attract ~~intensify~~and ~~the~~retain ~~efforts~~ qualified members of ~~governments~~our Board as compared to ~~raise~~DraftKings ~~revenues~~and ~~through~~SBT ~~increases~~as inprivate ~~gaming~~companies. ~~taxes~~Additionally, ~~and/or~~as ~~other~~we ~~taxes.~~are Itno islonger ~~not~~an ~~possible~~“emerging togrowth ~~determine~~company”, we have incurred significant expenses and devoted substantial management effort toward ensuring compliance with ~~certainty~~ the ~~likelihood~~requirements of ~~changes~~Section 404 inof ~~tax~~the ~~laws~~Sarbanes-Oxley orAct inand ~~the~~expect ~~administration~~to orcontinue ~~interpretation~~to ordo ~~enforcement~~so ofin ~~such~~the ~~laws~~future. ~~Any~~We ~~material~~will ~~increase, or~~need ~~the~~to ~~adoption~~continue ofto hire additional ~~taxes~~accounting orand ~~fees~~financial staff, ~~could~~and ~~have~~engage aoutside ~~material~~consultants, ~~adverse~~all ~~effect~~with onappropriate ~~our~~public ~~business,~~company ~~financial~~experience ~~condition,~~and ~~results of~~technical ~~operations~~accounting knowledge and ~~prospects.~~maintain an internal audit function, which will increase our operating

Additionally, tax authorities may impose indirect taxes on Internet-related commercial activity based on existing statutes and regulations which, in some cases, were established prior to the advent of the Internet. Tax authorities may interpret laws originally enacted for mature industries and apply it to newer industries, such as DraftKings. The application of such laws may be inconsistent from jurisdiction to jurisdiction. Our in-jurisdiction activities may vary from period to period which could result in differences in nexus from period to period.33

~~We are subject to periodic review and audit by domestic and foreign tax authorities~~expenses. ~~Tax~~Moreover, ~~authorities~~we ~~may~~could ~~disagree~~incur ~~with~~additional ~~certain~~compensation ~~positions~~costs ~~DraftKings or~~in ~~SBT~~the ~~has~~event ~~taken or~~ that we ~~will~~decide ~~take,~~to ~~and~~pay ~~any~~cash ~~adverse~~compensation ~~outcome~~closer ofto ~~such~~that aof ~~review~~other orpublicly-listed ~~audit could have a negative effect on our business~~companies, ~~financial~~ ~~condition~~which ~~and~~would ~~results~~increase ~~of operations. Although we believe that~~ our ~~tax~~general ~~provisions, positions~~ and ~~estimates~~administrative ~~are~~expenses ~~reasonable~~ and ~~appropriate,~~could ~~tax~~materially ~~authorities may disagree with certain positions we have taken. In addition, economic~~ and ~~political~~adversely ~~pressures to~~affect ~~increase~~our ~~tax revenue in various jurisdictions may make resolving tax disputes favorably more difficult~~profitability. We are ~~currently~~evaluating ~~under IRS~~these ~~audit for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests~~ rules and ~~informational reporting and withholding. The final resolution of that audit~~regulations, and ~~other~~cannot ~~audits~~predict or ~~litigation,~~estimate ~~may differ from~~ the ~~amounts~~amount ~~recorded in~~of ~~Old~~additional ~~DK’s~~costs ~~consolidated~~we ~~financial statements included herein and~~ may ~~materially~~incur ~~affect~~or ~~our consolidated financial statements in~~ the ~~period~~timing orof ~~periods~~such ~~in which that determination is made~~costs.

~~Although~~Failure ~~SBT’s corporate and tax structure resulted in relatively low effective corporate tax rate for the business, we cannot guarantee the same tax efficiency due~~ to ~~the~~maintain ~~change~~adequate ~~in corporate structures~~financial, asinformation ~~well~~technology ~~as developments in the cross-border taxation of international businesses with particular focus on the digital economy, as contemplated under The Organization for Economic Cooperation~~ and ~~Development’s Base~~management ~~Erosion~~processes and ~~Profit~~controls ~~Shifting~~could ~~initiative~~result ~~and transfer pricing legislation. Further,~~ in ~~light~~material ofweaknesses ~~such~~which ~~structure,~~could welead ~~may be exposed~~ to aerrors ~~substantial tax liability if the relevant authorities raise claims with regards to SBT’s tax status~~ in ~~various~~our ~~jurisdictions~~financial reporting, ~~including~~ ~~in particular the manner in~~ which itcould ~~allocated~~adversely oraffect ~~allocates~~our ~~profit~~business ~~amongst~~now ~~relevant~~that ~~jurisdictions~~we ~~for~~are ~~tax~~a ~~purposes~~public company.

37Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud. If we are unable to maintain adequate internal controls over financial reporting, our business and operating results could be harmed. Effective December 31, 2020, we were no longer an “emerging growth company”, and therefore under applicable SEC rules we must maintain internal controls over financial reporting to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the related rules of the SEC, which require, among other things, our management to assess annually the effectiveness of our internal control over financial reporting and our independent registered public accounting firm to issue a report on the effectiveness of internal control over financial reporting with our Annual Report.

~~Failure~~The tointernal ~~protect~~control orassessment ~~enforce~~required ~~our intellectual~~by ~~property~~Section 404 ~~rights~~of orSarbanes-Oxley may divert internal resources and we may experience higher operating expenses, higher independent auditor and consulting fees during the ~~costs~~implementation ~~involved~~of these changes. We may not be able to complete our evaluation, testing and any required remediation in ~~such~~a ~~enforcement~~timely ~~could~~fashion. ~~harm~~In addition, our current controls and any new controls that we develop may become inadequate because of poor design and changes in our business, ~~financial~~including ~~condition~~increased complexity resulting from any international expansion. Any failure to implement and maintain effective internal controls over financial reporting could adversely affect the results of ~~operations~~assessments by our independent registered public accounting firm and their attestation reports.

WeIf ~~rely~~we onare ~~trademark, copyright,~~unable ~~patent, trade secret, and domain-name-protection laws~~ to ~~protect~~certify ~~our proprietary rights. In~~ the ~~United~~effectiveness ~~States and internationally, we have filed various applications to protect aspects~~ of our ~~intellectual~~internal ~~property~~controls, ~~and~~or ~~currently~~if ~~hold~~our ainternal ~~number~~controls ofhave ~~issued~~a ~~patents in~~material ~~multiple~~weakness, ~~jurisdictions. In the future~~ we may ~~acquire~~not ~~additional~~detect ~~patents~~errors ~~or patent portfolios~~timely, ~~which~~our ~~could~~consolidated ~~require~~financial ~~significant cash~~statements ~~expenditures.~~could ~~However~~be misstated, ~~third~~we ~~parties~~could ~~may~~be ~~knowingly~~subject orto ~~unknowingly~~regulatory ~~infringe~~scrutiny ~~our~~and ~~proprietary~~a ~~rights,~~loss ~~third~~of ~~parties~~confidence ~~may challenge proprietary rights held~~ by usstakeholders, ~~and~~which ~~pending~~could ~~and~~harm ~~future~~our ~~trademark~~business and ~~patent~~adversely ~~applications~~affect ~~may~~the ~~not~~market beprice ~~approved.~~of Inour ~~addition,~~common ~~effective intellectual~~stock. ~~property~~Failure ~~protection may not be available in every country in which we operate or intend~~ to ~~operate~~comply ~~our~~with ~~business. In~~Section 404 ~~any~~ of ~~these~~Sarbanes-Oxley ~~cases,~~could wepotentially ~~may~~subject beus ~~required~~ to ~~expend~~sanctions ~~significant~~or ~~time~~investigations ~~and~~by ~~expense~~the toSEC, ~~prevent~~FINRA ~~infringement~~ or toother ~~enforce~~regulatory ~~our~~authorities, ~~rights. There~~as ~~can~~well beas noincrease ~~assurance~~the ~~that~~risk ~~others~~of ~~will~~liability ~~not~~arising ~~offer~~from ~~products~~litigation orbased ~~services~~on ~~that~~securities ~~are substantially similar to ours and compete with our business~~law.

~~Circumstances~~Continued ~~outside~~growth ~~our~~and ~~control~~success ~~could~~will ~~pose~~depend aon ~~threat to our intellectual property rights. For example, effective intellectual property protection may not be available in~~ the ~~United~~performance ~~States or~~of ~~other countries from which~~ our ~~DFS,~~current ~~Sportsbook~~ and ~~iGaming~~future ~~product offerings are accessible. Also~~employees, ~~the~~including ~~efforts~~certain wekey ~~have taken to protect our proprietary rights may not be sufficient or effective~~employees. ~~Any~~Recruitment ~~significant~~and ~~impairment~~retention of ~~our~~these ~~intellectual~~individuals ~~property~~is ~~rights could~~vital ~~harm our business or our ability~~ to ~~compete.~~growing ~~Also, protecting~~ our ~~intellectual~~business ~~property rights is costly~~ and ~~time-consuming. Any~~meeting ~~unauthorized disclosure or use of~~ our ~~intellectual property could make it more expensive to do~~ business, ~~thereby harming our operating results~~plans. ~~Furthermore,~~The ifloss weof ~~are~~any ~~unable~~of ~~to protect~~ our ~~proprietary~~key ~~rights~~executives or ~~prevent unauthorized use or appropriation by third parties, the value of our brand and~~ other ~~intangible~~key ~~assets~~employees ~~may be diminished, and competitors may be able to more effectively mimic our offerings and service. Any of these events~~ could ~~seriously~~ harm our business.

We ~~rely~~depend on ~~licenses~~a tolimited ~~use~~number ~~the~~of ~~intellectual property~~key ~~rights~~personnel ofto ~~third~~manage ~~parties~~and ~~which~~operate ~~are~~our ~~incorporated~~business, ~~into~~including DraftKings’ co-founders, our ~~products~~Chief Financial Officer and ~~services~~our Chief Legal Officer. ~~Failure~~The toleadership ~~renew~~of orthese ~~expand~~key ~~existing~~personnel ~~licenses may~~was ~~require~~a uscritical element of Old DK’s success and we expect that such leadership will continue to ~~modify~~be a critical element of DraftKings’ future success. The departure, ~~limit~~death or ~~discontinue~~disability ~~certain~~of ~~offerings~~any one of our executive officers or other extended or permanent loss of any of their services, ~~which~~or any negative market or industry perception with respect to any of them or their loss, could ~~materially~~have ~~affect~~a material adverse effect on our business. We are the beneficiary of a $2 million key man insurance policy covering our Chief Executive Officer, ~~financial~~but ~~condition and~~we ~~results~~are not protected by key man or similar life insurance covering other executive officers or members of ~~operations~~senior management.

WeIn ~~rely~~addition, oncertain ~~products, technologies~~of ~~and~~our ~~intellectual~~other ~~property~~employees ~~that~~have wemade ~~license~~significant ~~from~~contributions ~~third~~to ~~parties,~~our ~~for~~growth ~~use~~and insuccess. We believe our ~~business-to-business~~success and ~~business-~~our ability to~~-consumers offerings.~~ ~~Substantially~~compete ~~all~~and grow will depend in large part on the efforts and talents of our ~~offerings~~employees and ~~services~~on ~~use~~our ~~intellectual~~ability ~~property~~to ~~licensed~~retain ~~from~~highly ~~third~~skilled ~~parties~~personnel. The ~~future~~competition ~~success~~ for these types of ~~our~~personnel ~~business~~is ~~may~~intense ~~depend,~~and inwe ~~part,~~compete onwith ~~our~~other ~~ability~~potential toemployers ~~obtain,~~for ~~retain~~the ~~and/or~~services ~~expand~~of ~~licenses~~our ~~for~~employees. ~~popular~~As ~~technologies~~a ~~and~~result, ~~games~~ we may not succeed in aretaining ~~competitive~~the ~~market.~~executives Weand ~~cannot~~other ~~assure~~key employees that ~~these~~we ~~third-party~~need. ~~licenses~~Employees, orparticularly ~~support~~analysts ~~for~~and ~~such~~engineers, ~~licensed~~are ~~products~~in ~~and~~high ~~technologies~~demand, ~~will~~ ~~continue~~and towe bedevote ~~available~~significant resources to usidentifying, onhiring, ~~commercially~~training, ~~reasonable~~successfully ~~terms,~~integrating ifand atretaining ~~all~~these employees. InWe ~~the~~cannot ~~event~~provide assurance that we ~~cannot~~will ~~renew~~be ~~and/~~able to attract or ~~expand existing~~retain ~~licenses~~such highly qualified personnel in the future. In addition, wethe ~~may~~loss beof ~~required~~employees or the inability to ~~discontinue~~hire oradditional ~~limit~~skilled employees as necessary could result in significant disruptions to our ~~use~~business, ofand the ~~products~~integration ~~that~~of ~~include~~replacement orpersonnel ~~incorporate~~could ~~the~~be ~~licensed intellectual~~time-consuming ~~property~~and expensive and cause additional disruptions to our business.

~~Some~~All of our ~~license agreements~~named ~~contain~~executive ~~minimum~~officers ~~guaranteed~~are ~~royalty payments to the third party~~employees-at-will. IfThe weunexpected ~~are~~loss ~~unable~~of toservices ~~generate~~of ~~sufficient~~one ~~revenue~~or ~~to offset~~more ~~the~~of ~~minimum~~these ~~guaranteed~~key ~~royalty~~employees ~~payments, it~~ could have a material adverse effect on our ~~results of operations~~business, ~~cash flows and~~ financial condition. Our license agreements generally allow for assignment in the event of a strategic transaction but contain some limited termination rights post-assignment. Certain of our license agreements grant the licensor rights to audit our use of their intellectual property. Disputes with licensors over uses or terms could result in the payment of additional royalties or penalties by us, ~~cancellation~~results ~~or non-renewal~~ of ~~the~~operations ~~underlying~~and ~~license or litigation~~prospects.

The regulatory review process and licensing requirements also may preclude us from using technologies owned or developed by third parties if those parties are unwilling to subject themselves to regulatory review or do not meet regulatory requirements. Some gaming authorities require gaming manufacturers to obtain approval before engaging in certain transactions, such as acquisitions, mergers, reorganizations, financings, stock offerings and share repurchases. Obtaining such approvals can be costly and time consuming, and we cannot assure that such approvals will be granted or that the approval process will not result in delays or disruptions to our strategic objectives.34

Additionally, as we grow and develop the infrastructure as a public company, we may find it difficult to maintain our entrepreneurial, innovative and team-based culture. Our ~~insurance~~retention and recruiting may ~~not~~require ~~provide~~significant ~~adequate~~increases ~~levels~~in compensation expense as we transition to a public company, which would adversely affect our results of ~~coverage against~~operation. ~~claims~~Moreover, there may also be disparities of wealth between those of our employees who were employees of DraftKings or SBT prior to the Business Combination and those who join us after the Closing, which may harm our culture and relations among employees.

WeIf ~~maintain insurance that~~ we ~~believe~~do isnot ~~customary~~succeed ~~for~~in ~~businesses~~attracting, ofhiring, ~~our size~~ and ~~type.~~integrating ~~However~~excellent personnel, ~~there~~or ~~are~~retaining ~~types~~and ofmotivating ~~losses~~existing personnel, we may ~~incur that cannot~~ be ~~insured~~unable ~~against or that we believe are not economically reasonable~~ to ~~insure.~~grow ~~Moreover,~~effectively ~~any loss incurred could exceed policy limits~~ and ~~policy payments made to us may not be made on a timely basis. Such losses could adversely affect~~ our business ~~prospects, results~~could ofbe ~~operations,~~seriously ~~cash flows and financial condition~~harmed.

38 In some jurisdictions our key executives, certain employees or other individuals related to the business will be subject to licensing or compliance requirements. Failure by such individuals to obtain the necessary licenses or comply with individual regulatory obligations, could cause the business to be non-compliant with its obligations, or imperil its ability to obtain or maintain licenses necessary for the conduct of the business. In some cases, the remedy to such situation may require the removal of a key executive or employee and the mandatory redemption or transfer of such person’s equity securities.

~~Risk~~As ~~Factors~~part ~~Relating~~of obtaining real money gaming licenses, the responsible gaming authority will generally determine suitability of certain directors, officers and employees and, in some instances, significant shareholders. The criteria used by gaming authorities to make determinations as to who requires a finding of suitability or the ~~Integration~~ suitability of ~~DraftKings’~~an applicant to conduct gaming operations varies among jurisdictions, but generally requires extensive and ~~SBTech’s~~detailed ~~Businesses~~application disclosures followed by a thorough investigation. If any gaming authority with jurisdiction over our business were to find an applicable officer, director, employee or significant shareholder of ours unsuitable for licensing or unsuitable to continue having a relationship with us, we would be required to sever our relationship with that person. Furthermore, such gaming authorities may require us to terminate the employment of any person who refuses to file required applications. Either result could have a material adverse effect on our business, operations and prospects.

~~While~~In weaddition, ~~work~~our amended and restated articles of incorporation provides that any of our common stock or other equity securities owned or controlled by any stockholder whom the Board determines in good faith (following consultation with reputable outside gaming regulatory counsel), pursuant to ~~integrate~~a resolution adopted by the ~~DraftKings and~~unanimous ~~SBT~~affirmative ~~businesses~~vote ~~and~~of ~~operations~~all of the disinterested members of the Board, ~~management’s~~is ~~focus~~an ~~and~~unsuitable ~~resources~~person, ~~may~~will be ~~diverted~~subject ~~from~~to ~~operational~~mandatory ~~matters~~sale and ~~other~~transfer ~~strategic opportunities~~to either us or one or more third-party transferees.

~~Successful~~Additionally, ~~integration~~a ofgaming ~~SBT’s~~regulatory ~~operations,~~body ~~sports~~may ~~betting and~~refuse to issue or renew a gaming ~~technology~~license ~~and~~or ~~personnel~~restrict ~~into~~or ~~those~~condition the same, based on our present activities or the past activities of DraftKings ~~places~~or anSBT, ~~additional~~or ~~burden~~the onpast ~~management~~or ~~and~~present ~~other~~activities ~~internal~~of ~~resources. The~~their ~~diversion~~or ofour ~~management’s~~current ~~attention~~or ~~and~~former ~~any~~directors, ~~difficulties~~officers, ~~encountered~~employees, inshareholders ~~the~~or ~~transition~~third ~~and~~parties ~~integration~~with ~~process~~whom we have relationships, which could ~~harm~~ adversely affect our ~~business,~~operations or financial condition. If additional gaming regulations are adopted in a jurisdiction in which we operate, ~~results~~such ofregulations ~~operations~~could ~~and~~impose ~~prospects~~restrictions or costs that could have a significant adverse effect on us. InFrom ~~addition~~time to time, ~~uncertainty~~various ~~about~~proposals are introduced in the ~~effect~~legislatures of some of the ~~Business Combination~~jurisdictions onin which we have existing or planned operations that, if enacted, could adversely affect our ~~systems~~directors, officers, key employees, ~~customers~~or other aspects of our operations. To date, ~~partners~~we have obtained all governmental licenses, findings of suitability, registrations, permits and ~~other~~approvals ~~third~~necessary ~~parties~~for our operations. However, ~~including~~we ~~regulators~~can give no assurance that any additional licenses, permits and approvals that may ~~have~~be anrequired ~~adverse effect~~will onbe ~~us.~~given ~~These~~or ~~uncertainties~~that ~~may~~existing ~~impair~~ones ~~our~~will ~~ability~~be renewed or will not be revoked. Renewal is subject to, ~~attract~~among other things, ~~retain~~continued ~~and~~satisfaction ~~motivate~~of suitability requirements of our directors, officers, key ~~personnel~~employees ~~for~~and ~~some~~shareholders. ~~time~~Any ~~after~~failure ~~the Business~~to ~~Combination~~renew or maintain our licenses or to receive new licenses when necessary would have a material adverse effect on us.

~~Furthermore, the~~Due ~~overall~~to ~~integration of~~ the ~~businesses~~nature ~~may~~of ~~result~~our inbusiness, ~~material~~we ~~unanticipated~~are ~~problems,~~subject ~~expenses,~~to ~~liabilities,~~taxation ~~competitive~~in ~~responses, and~~a ~~loss~~number of ~~customers~~jurisdictions and ~~other~~changes ~~relationships.~~in, ~~The~~or ~~difficulties~~new ofinterpretations ~~combining the operations~~ of ~~the companies include~~, ~~among~~tax ~~others~~laws, ~~difficulties~~ intax ~~integrating~~rulings ~~operations~~or ~~and~~their ~~systems;~~application ~~conforming~~by ~~standards,~~tax ~~controls,~~authorities ~~procedures~~could ~~and~~result ~~accounting~~in ~~and~~additional ~~other~~tax ~~policies, business~~liabilities ~~cultures~~ and ~~compensation~~could ~~structures;~~materially ~~assimilating~~affect ~~employees,~~our ~~including~~financial ~~possible~~condition ~~culture conflicts~~ and ~~different~~results ~~opinions on~~of ~~technical~~operations. ~~decisions~~We ~~and~~are ~~product~~also ~~roadmaps;~~subject ~~managing~~to ~~the~~periodic ~~expanded~~audits ~~operations of a larger~~ and ~~more~~examinations ~~complex~~by ~~company~~the IRS, ~~including coordinating~~as awell ~~geographically~~as ~~dispersed~~state ~~organization;~~ and ~~keeping~~local ~~existing~~taxing ~~customers~~authorities, ~~and~~the ~~obtaining~~results ~~new customers. Many~~ of ~~these factors~~which ~~will~~may bematerially ~~outside~~impact our ~~control~~financial ~~and~~statements ~~any one of them could result~~ in ~~increased~~the ~~costs,~~period ~~decreases~~ in ~~the amount of expected revenues and diversion of management’s time and energy,~~ which ~~could~~the ~~materially~~audit ~~impact~~or ~~our~~examination ~~business, financial condition and results of operations~~occurs.

WeOur ~~may~~tax ~~incur~~obligations ~~successor~~will ~~liabilities~~ be varied and include U.S. federal, state and international taxes due to ~~conduct~~the ~~arising~~nature ~~prior~~of our business. The tax laws that will be applicable to our business are subject to interpretation, and significant judgment will be required in determining our worldwide provision for income taxes. In the ~~completion~~course of our business, there will be many transactions and calculations where the ~~Business~~ultimate ~~Combination~~tax determination is uncertain. For example, compliance with the 2017 United States Tax Cuts and Jobs Act (“TCJA”) may require the collection of information not regularly produced within our Company, the use of estimates in our consolidated financial statements, and the exercise of significant judgment in accounting for its provisions. As regulations and guidance evolve with respect to the TCJA, and as we gather more information and perform more analysis, our results may differ from previous estimates and may materially affect our consolidated financial statements.

We may be subject to certain liabilities of DraftKings and SBT. DraftKings and SBT at times may each become subject to litigation claims in the operation of its business, including, but not limited to, with respect to employee matters and contract matters. From time to time, we may also face intellectual property infringement, misappropriation, or invalidity/non-infringement claims from third parties, and some of these claims may lead to litigation. We may initiate claims to assert or defend their own intellectual property against third parties. Any litigation may be expensive and time-consuming and could divert management’s attention from its business and negatively affect its operating results or financial condition. The outcome of any litigation cannot be guaranteed, and adverse outcomes can affect us negatively.35

WeThe ~~may~~gaming ~~also~~industry ~~face inquiry~~represents a significant source of tax revenue to the jurisdictions in which we will operate. Gaming companies and ~~investigation~~business-to-business providers in the gaming industry (directly and/or indirectly by ~~governmental~~way ~~authorities,~~of ~~which~~their ~~could~~commercial relationships with operators) are currently subject to significant taxes and fees in ~~turn~~addition ~~lead~~to normal corporate income taxes, and such taxes and fees are subject to ~~fines~~increase at any time. From time to time, asvarious legislators and other government officials have proposed and adopted changes in tax laws, or in the ~~regulatory~~administration ~~landscape~~or interpretation of ~~sport betting~~such laws, affecting the gaming industry. In addition, any worsening of economic conditions and ~~iGaming~~the large number of jurisdictions with significant current or projected budget deficits could intensify the efforts of governments to raise revenues through increases in gaming taxes and/or other taxes. It is not possible to determine with certainty the likelihood of changes in tax laws or in the administration or interpretation or enforcement of such laws. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our business, financial condition, results of operations and prospects.

~~Although~~Additionally, wetax ~~expect~~authorities ~~that~~may ~~the~~impose ~~Business Combination~~indirect ~~will~~taxes ~~produce~~on ~~substantial~~Internet-related ~~synergies~~commercial activity based on existing statutes and regulations which, in some cases, w

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