DraftKings Inc. (DKNG) Q1 2021 Earnings Call Transcript

DraftKings Inc. (DKNG -0.06%)
Q1 2021 Earnings Call
May 07, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. And welcome to the DraftKings Q1 2021 earnings call. [Operator instructions]. I would now like to introduce your host for today's conference call, Stanton Dodge, you may begin.

Stanton Dodge -- Chief Legal Officer

Good morning, everyone, and thank you for joining us today. Statements we make during this call that are not statements of historical fact constitute forward-looking statements that are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. For more information, please refer to the risks, uncertainties, and other factors discussed in our SEC filings.

During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating DraftKings' operating performance. These measures should not be considered in isolation or as a substitute for DraftKings' financial results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is available in our quarterly report on Form 10-Q filed today with the SEC and in our earnings presentation, which is available on our website at investors.draftkings.com. Hosting the call today, we have Jason Robins, co-founder, chief executive officer, and chairman of DraftKings, who will share some opening remarks and an update on our business; and Jason Park, chief financial officer of DraftKings, who will provide a review of our financials.

We will then open up the line to questions. I will now turn the call over to Jason Robins.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Good morning, everyone. To start today's call, I want to touch on a few recent examples of how DraftKings, our employees, and our customers are giving back to our communities. In March, DraftKings celebrated International Women's Day, our newest global company holiday, and launched a free-to-play pool celebrating female athletes. About 100,000 people participated and each entry raised money for U.S.

and global organizations supporting and empowering female leaders and entrepreneurs. We also recently announced the appointment of Gisele Bundchen, an environmental activist and philanthropist is a special advisor to me and our board of directors for ESG initiatives. Gisele is a global icon who has utilized the platform she established in fashion and entertainment to lead and advocate for vital environmental causes and social causes. The strategic counsel and unique global perspective that Gisele brings to the board will be indispensable.

She is already making an impact as we have collaborated to set a goal of planting 1 million trees by Earth Day 2022. We launched several opportunities for customers to directly support the effort including through charity daily fantasy sports contests and free-to-play pools. In coordination with the Arbor Day Foundation, DraftKings has pledged to plant the first 100,000 trees in several U.S. states.

May is Military Appreciation Month in the U.S. During this month, we also recognize Military Spouse Day and Memorial Day. DraftKings is proud to continue to support service members, veterans, and their families. We are launching our second Tech for Heroes class of 2021, providing veterans and military spouses with free hi-tech skills and training to support their post-service critical.

DraftKings' customers will also have the opportunity to show their support through charity DFS contests to benefit our Tech for Heroes initiative. All of these initiatives are part of our overarching CSR program: DraftKings Serves, which is the catalyst that facilitates meaningful relationships between our employees, our customers, and the causes they feel passionate about in order to create a better world for everyone. At DraftKings, we're committed to creating inclusive pathways for people to build, create, imagine, and innovate. Through DraftKings Serves, we're advancing that mission with a focus on service, equity, responsibility, vitality, entrepreneurship, and sports.

I am very proud of these initiatives and our ability to encourage our global community of customers to really make an impact where it is needed. On today's call, we will cover the following topics: our first-quarter results and recent accomplishments; our recent state launches and legalization trends; our products and technology investment, as well as the migration to our in-house bet engine. And before turning it over to Jason Park, I will talk about the acquisitions we have completed. DraftKings is off to an outstanding start in 2021.

Revenue for the first quarter increased 175% year over year to $312 million on a pro forma basis. MUPs grew 114% and ARPMUP grew 48%. These results reflect continued overperformance of our core business due to strong customer acquisition and retention, as well as the successful launches of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia. Our first-quarter results also benefited from external factors that once again broke our way, including better-than-expected online sports betting hold percentage and the extension of an executive order through April 3 that allowed for mobile registration in Illinois, which is the largest sports betting state and it turns the handle on the first quarter.

Please note that the executive order was not renewed following April 3 which may negatively affect the growth rate of the overall Illinois sports betting market. Though we are relatively well-positioned given the large number of mobile registrants we have already captured. In the first quarter, we continued to make progress with the migration to our own in-house bet engine and are on track to complete the migration by the end of the third quarter of 2021. We expanded our relationships with the NFL on PGA Tour.

As an official sports betting partner of the NFL, DraftKings will have the right to integrate relevant sports betting content directly into NFL media properties including NFL.com and the NFL app. We will also be able to enhance the fan experience with NFL highlights and footage. We also renewed our right to the official and exclusive daily fantasy sports partner of the NFL. As part of the continued DFS agreement, we will have exclusive rights to NFL IP and marks our plans to collaborate with the league on a variety of content and product offerings that fans can engage with on the DraftKings' DFS app.

Following the legalization of sports betting and fantasy sports in Arizona, we expanded our existing commercial relationship with the PGA Tour to provide market access for retail mobile sports betting in Arizona pending necessary approvals. We also plan to operate with the PGA Tour premium retail sportsbook at TPC Scottsdale, home of the Waste Management Phoenix Open pending necessary approvals. We secured partnerships with the UFC and WWE to reach broader fan bases across sports. DraftKings is the UFC's first sportsbook and daily fantasy partner in the United States and Canada.

Combat sports and UFC in particular have grown into a high-demand category. While DraftKings and UFC have previously collaborated on specific events, we are proud to become official partners and launch impactful integrations. We became an official gaming partner of WWE. Our collaboration with WWE centers on our free-to-play pools product and launched with inaugural free-to-play pools at WrestleMania in April that had over 100,000 combined entries.

In March, we raised approximately $1.1 billion in net proceeds by selling zero% coupon convertible notes that will mature in 2028. We will not see any dilution until our stock is at $135.50 per share. This capital raise is another example of our proactive approach to ensuring we are well-financed to pursue our growth objectives. In terms of acquisition, we announced and closed two: Vegas Sports Information Network Inc.

or VSiN, which is a multi-platform broadcast and content company that has delivered trusted sports betting news analysis and data to U.S. sports betters in 2017. Blue Ribbon Software, which is a leading global jackpot and gamification company that provides platform-agnostic, real-time gamification tools that allow for fully customizable jackpot promotions. I also want to provide a few highlights in three significant sporting events in 2021.

The Super Bowl, The Masters, and March Madness. For The Super Bowl, DFS entry fees grew 66%, and paid active users grew 60% compared to the Super Bowl in 2020. Also for the Super Bowl, New Jersey OSB handle grew 70% and active users grew 44% compared to Super Bowl in 2020. For the Masters, DFS entry fees grew 21% though there were only five months separating this year's Masters and last year's event in November 2020.

Also for the Masters, New Jersey handle grew 30% and active users grew 9% compared to the event held just five months earlier in November of 2020. For March Madness, New Jersey handle grew 181% in 2021 versus 2019 and active users grew 80%. We are raising our revenue outlook for 2021 due to our expectations for continued growth and the outperformance of our core business. Jason Park will provide more details in a few minutes.

Turning to new U.S. states for DraftKings legalization trends. In the first quarter, we launched mobile sports betting and iGaming in Michigan and we launched mobile sports betting in Virginia. When comparing our mobile sports betting handle in Michigan from our launch on January 22 through March 31, 2021, on a per-capita basis with New Jersey mobile sports betting for the same time period in 2019.

Michigan outperformed New Jersey by 3% in OSB and 291% in iGaming. As a reminder by this time in 2019, we are already live in New Jersey for five months prior to this period, including the entire NFL season which is a very important time for customer acquisition. The same is true for our mobile sports betting handle per capita in Virginia from January 24 to March 31, 2021. The state outperformed New Jersey by 7% for the same time period in 2019.

As with Michigan, Virginia had just launched while New Jersey was already live for five months including the entire NFL season. When considered with the information we presented at our Investor Day in March, these results in non-New Jersey states further confirm our view that New Jersey is a reasonable and perhaps conservative proxy for the performance of other states in the U.S. Also, by generating $95 million in only its second full month, the Michigan iGaming market is on an annual run rate of over $1.1 billion in gross revenue, a mark that New Jersey did not hit until December 2020, seven years after its launch. In Michigan, our cross-selling efforts are also working well with 56% of sportsbook players in the state also engaging with our iGaming product offering from launch due at March 31.

It is now just about three years since PASPA was struck down by the U.S. Supreme Court. Twenty-six jurisdictions representing 44% of the population of legalized sports betting and 18 jurisdictions representing 35% of the population of legalized mobile sports betting, 15 of which are currently live representing 27% of the population. DraftKings is live with online sports betting in 12 states that collectively represent 25% of the U.S.

population. Six states representing approximately 11% of the U.S. population have legalized some form of iGaming. DraftKings is live in four states representing approximately 10% of the U.S.

population. We believe the outlook for further legalization is very promising. In 2021, more than 20 state legislatures have introduced legislation to legalize online sports betting. Five state legislatures have introduced legislation to expand their existing sports wagering framework and one state legislature introduced legislation to legalize sports betting limited to retail locations.

In addition, four states have introduced iGaming legislation and three states have introduced online poker legislation. Three of the states that introduced legislation to legalize mobile sports betting this year: Wyoming, Arizona, and New York have already enacted mobile sports wagering laws. Maryland has made significant progress on the mobile and retail sports wagering bill passed by the legislature and now pending action from the governor. The three states that have enacted laws this year represent 8% of the U.S.

population and bring the percentage of the population with legalized mobile sports betting to 35%. We also continue to believe that Canada represents a very meaningful opportunity for DraftKings. Most progress to date has been made in Ontario as the government's 2020 provincial budget has been adopted and demands existing laws to remove the Ontario Lottery and Gaming Corporation statutory monopoly on internet gaming in the province. We look forward to further progress in Ontario and in Canada as a whole.

I'd now like to comment on our progress with the integration and migration to our in-house bet engine and discuss our new product and content initiatives. I continue to be pleased with the progress we are making with our organizational integration and the migration to our proprietary in-house, back-end technology for trading. We have been testing our in-house bet engine on an ongoing basis. The migration remains on track to be complete by the end of the third quarter in 2021.

As we have previously discussed, being vertically integrated is important and will help with the innovation, speed to market, site stability, and availability. We will also realize gross margin synergies associated with the migration starting in the fourth quarter of this year. In terms of the product innovation, we announced an agreement with Dish Network to bring DraftKings sportsbook and daily fantasy experiences directly to Dish's customers nationwide. The service launched on March 3 with the first-of-its-kind patent, pending DraftKings' app integration on the Dish TV Hopper platform.

Since launching, more than 600,000 unique devices have used the DraftKings app on a Dish box. The agreement also provided for the subsequent launch of Sling TV's new exclusive sports betting information channels in collaboration with DraftKings. Sling TV subscribers and Sling Free users can now view real-time game scores and betting odds on the DraftKings' basketball, baseball, and hockey channel. Sling TV will continue to bring the DraftKings sports betting experience to customers with more sports and expanded offerings in the future.

We continue to build differentiating iGaming content to increase engagement with our customers. In April, we added Spanish 21, DraftKings-built unique casino game to our product suite. Spanish 21 was available immediately to customers in New Jersey and we plan to expand it to Michigan, Pennsylvania, West Virginia pending regulatory approvals. Spanish 21 has always been a popular land-based casino game.

We are currently the only operator offering Spanish 21 and are proud to bring the blackjack variant exclusively to our casino product. We are also very excited to announce the upcoming launch of a first-of-its-kind social functionality to both our DFS and sportsbook app. The launch of DraftKings Social which is expected to roll out over the next few weeks marks an industry-first innovation to create an integrated social community across sports betting and daily fantasy sports as fans can interact with each other within this shared period to peer environment. With Daily Fantasy and sports betting already being predominantly online, this launch both enhances the digital engagement possibilities of these products while also leaning further into the inherently social spirit of sports fandom and competition.

The product is particularly unique because it amplifies our ability to create an interconnected ecosystem across our consumer products. In addition to functionality like shared log in and wallet that we already offer, features like universal profiles, friends list, commenting, and loyalty/rewards will also allow draftings to connect users across products in a way that no other company is currently doing. Turning to M&A. Our acquisition of VSiN allows us to benefit from the explosion and appetite for sports betting content as more states legalize and to participate in media content creation for this rapidly growing adjacency to the sports betting market.

VSiN not only provides additional revenue streams through subscriptions and advertising but also has a highly engaged and growing audience that may provide CAC advantages and help with engagement with sports betting customers. We welcome Brian Musburger and his team to the DraftKings family. We broadened our sports entertainment footprint by completing a content distribution, monetization, and sponsorship agreement with Meadowlark Media. As part of the deal, Meadowlark Media and DraftKings will distribute the Dan Le Batard Show with Stugotz and the Le Batard & Friends network across a wide range of audio, TV, digital, and social channels.

Additionally, the network of shows will prominently feature DraftKings' odd betting trends in General Sportsbook and Daily Fantasy information. We continue to be big believers in the interception of content and gaming as the consumption of each benefits the other. With the hiring of Brian Angiolet as our chief media officer, we are accelerating our plans to establish ourselves as both the product provider and resource for fun. As our media presence grows with the acquisition of VSiN, partnership with Meadowlark Media, and integration agreements with Turner Sports and ESPN, Brian's creative ideas will expand the possibilities for DraftKings content.

We look forward to sharing more in the coming quarters. We also completed the acquisition of BlueRibbon Software. DraftKings will now be able to enhance the customer experience by integrating BlueRibbon's unique jackpot functionality, including personalized promotions and rewards tailored to the individual customer or jackpots across DraftKings' various product offerings. We expect to launch our jackpot technology in the second half of 2021 in our iGaming product.

We are strengthening our capabilities to rapidly integrate these acquisitions while also staying focused on winning in this rapidly growing industry and migrating to our in-house bet engine. In conclusion, we are off to a great start in 2021. We performed exceptionally well in the first quarter, saw legislative advancements in several states, continue to make progress with the migration to our own in-house bet engine, expanded and initiated relationships with important organization, and advanced new product technology and content initiatives. I will now turn the call over to DraftKings CFO, Jason Park, who will discuss our first-quarter results and revised expectations for 2021.

Jason Park -- Chief Financial Officer

Thank you, Jason. Good morning, everyone. Before I begin, I want to remind everyone that we will be discussing our results on the combined company pro forma basis to improve comparability as if we own our B2B business starting on January 1, 2020, rather than on April 23, 2020. We are pleased to announce that we generated $312 million in revenue for the quarter, representing a 175% increase versus Q1 2020 revenue of $113 million.

A portion of this amazing growth is due to the sports postponements that occurred in Q1 2020 due to COVID-19. Our B2C business generated 281 million for the quarter, representing a 217% increase versus prior year. B2C monthly unique payers in the quarter increased 114% year over year to 1.5 million. The increase reflects strong unique payer retention and acquisition across DFS, OSB, and iGaming, as well as the lack of traditional sports in the last three weeks of March 2020.

Average revenue per monthly unique payer, or ARPMUP, was $61 in Q1, representing a 48% increase versus the same period in 2020. Our ARPMUP was positively impacted by increased engagement with our iGaming and online sportsbook product offerings and our excellent cross-selling capabilities. Our B2B business generated $31 million for the quarter, up 26% versus prior year due to the positive impact of FX, as well as last March being impacted by COVID. First-quarter revenue exceeded our expectation due to a number of factors, including the extension of an executive order that allowed for continued mobile registration in Illinois through Q1, higher-than-forecast OSB holds percentage, overperformance in our core business as a result of continued strong customer acquisition, retention, and monetization, and strong launches in Michigan and Virginia.

We generated $155 million of gross profit dollars on an adjusted EBITDA basis for the entire business in the quarter, representing a 135% increase versus the prior-year period. Gross margin rate on an adjusted EBITDA basis for the business declined as expected to 50% in the quarter. As we have noted in the past, our gross margin rate has been impacted and will continue to be impacted by a mix shift out of our more mature and thus higher-margin DFS product offering, and into higher growth rates and lower margin OSB, and iGaming product offerings. In addition, gross margin rate within a period is impacted by promotional intensity typically most intense when a new state launches and at the beginning of a major sports season as we aim to acquire customers.

Gross margin rates will be positively impacted by the conversion to our own bet engine, which will be complete by the end of Q3, as well as several gross margin rate improvement initiative. Our sales and marketing expenses were $220 million, which include our external marketing. External marketing was higher than prior year due to being live in 12 total states versus seven in Q1 2020, including the launch of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia, which occurred in the quarter. The governor of Illinois also extended an executive order that allowed for mobile registration in Illinois through April 3, which allowed us to continue to acquire during that period.

Additionally, we continued to see accretive LTV to CAC opportunities, which allowed us to invest deeper in marketing, in part due to the stay-at-home nature of COVID. Our general and administrative and product and technology costs on an adjusted EBITDA basis were 41 million and 34 million, respectively, as we continue to invest to achieve scale in our back-office functions, such as finance and accounting, legal and human resources, as well as adding to our technology team. Adjusted EBITDA for the quarter was negative 139 million as we rolled out our new state playbook in multiple jurisdictions and continued to invest in our product, technology, and G&A functions. In the quarter, we expensed $186 million in items that we exclude from adjusted EBITDA, but are included in GAAP operating income, notably, 152 million for stock-based compensation and 34 million for amortization of acquired intangibles, depreciation, and other amortization, as well as transaction-related expenses.

Our stock-based compensation expense reflects accruals related to equity awards based on our anticipated revenue performance in 2021. Moving on to our balance sheet and liquidity. We ended the quarter with $2.8 billion of cash on our balance sheet following our issuance of 0% coupon convertible notes that will mature in 2028. We raised approximately 1.1 billion in net proceeds from this offering.

We are well-capitalized to execute our multiyear plan and address our key priorities of taking advantage of this unique time for customer acquisition, entering new states as they legalize, continuing to lead the market on product innovation, and exploring opportunistic and accretive M&A. Looking at the rest of 2021. On our fourth-quarter earnings call in February, we provided a range for 2021 revenue of 900 million to 1 billion. Given our strong start to 2021 and underlying acquisition, retention, and monetization of players, we are increasing our guidance to 1.05 billion to 1.15 billion of revenue for 2021, which equates to year-over-year growth of 63% to 79%, and a 16% increase compared to the midpoint of our prior guidance.

The 16% increase in the midpoint of our 2021 revenue guidance reflects strong performance in Q1, which has continued in Q2, continued strong user activation due to our marketing spend, well-executed launches of mobile sports betting in Michigan and Virginia and iGaming in Michigan, and a modest impact of VSiN and BlueRibbon on 2021 revenue. We assume that all professional and college sports calendars that have been announced come to fruition and that we continue to operate in states in which we are live today. These states collectively represent 25% of the U.S. population for mobile sports betting and 10% of the U.S.

population for iGaming. Though Wyoming, Arizona, and New York have legalized, we do not know the exact date these states will launch and are not including them in our revenue guidance. In addition, for the past several quarters, our financial results benefited from the stay-at-home nature of COVID and the unique sports calendar in the second half of 2020. We expect both MUPs and ARPMUPs to grow in 2021 with MUPs increasing at a higher rate than ARPMUP.

Regarding our 2021 quarterly revenue cadence, all things being equal, which means no new states launch beyond Michigan and Virginia, we expect Q1 to represent 28% of full-year 2021 revenue, Q2 to be slightly more than 20%, and Q3 to be slightly below 20% of full-year revenue. We currently expect the fourth quarter to account for slightly more than 30% of our revenue for the year. While we are not providing guidance for 2021 adjusted EBITDA, sales and marketing expenses are key input. As discussed, sales and marketing in older vintage states will begin to moderate as we continue to invest in accretive LTV to CAC opportunities.

2020 and 2021 vintage states will have increased sales and marketing as we lap partial years for 2020 launches, execute our new state playbook in Michigan and Virginia well into the second quarter, and invest in customer acquisition in Iowa, given the launch of mobile registration on January 1. We have also announced new relationships, including our expanded agreement to become an official sports betting partner of the NFL. The net effect is that we continue to expect to spend significantly more on sales and marketing in 2021 compared to 2020. The significant number of customers we are acquiring also results in an increase in variable costs, such as customer service.

From a quarterly perspective, we continue to expect our Q3 adjusted EBITDA loss to be deepest and meaningfully wider than last year's Q3 loss as we ramp up external marketing substantially for the start of the NFL season, especially since we will have three states in their first full NFL season. We expect our Q2 loss to be somewhat better than Q1, though still heavily impacted by investments associated with our launches in Michigan and Virginia. In the fourth quarter, we expect a slightly narrower loss than the second quarter as we benefit from higher seasonal revenue. As a reminder, our marketing spend is impacted by the launch of new states.

Our spend is also highly flexible and can be reduced or paused altogether if the sports calendar shifts. That concludes our remarks, and we will now open the line for questions.

Questions & Answers:

Operator

[Operator Instructions] Our first question comes from Stephen Grambling with Goldman Sachs.

Stephen Grambling -- Goldman Sachs -- Analyst

Hey, good morning. Thanks for taking the questions.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Good morning.

Stephen Grambling -- Goldman Sachs -- Analyst

In the release, you highlighted the launch of social aspects of the app. Can you just help us maybe think longer term about, you know, maybe social? And what do you envision as a potential opportunity? Does this include effectively user-led content? Thanks.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thanks, Stephen. Great question. So we're very excited about some of the new social features we'll be releasing. We have a dedicated team on that, led by a guy named Jordan Mendell, and we're very excited that we'll, you know, be able to really be an innovator in this space.

I think the idea is to, yes, allow some user-generated content, but obviously, there will be moderation. And then, you know, the bigger picture is just to allow people to connect specifically around the experience they're having on DraftKings. Obviously, you know, a lot of social platforms out there. This isn't attempting to substitute for, you know, what the Facebooks and Twitters, and Instagrams the world are doing.

It's really more meant to enhance the actual experience on DraftKings. And a lot of requests we get from people, "How do I better see what my friends are betting on and what they're playing? How do I interact if I like a bet my friend makes and let them know? How do, you know, I understand, you know, what my friends are playing, so I can play contest against them on our private leagues product?" So lots of requests we've gotten, and we're trying to do our best to facilitate those interactions in a way that makes users stickier, but more importantly, improves the customer experience.

Stephen Grambling -- Goldman Sachs -- Analyst

That's great. Thanks. Will jump back in the queue.

Operator

Next question comes from Jed Kelly of Oppenheimer.

Jed Kelly -- Oppenheimer & Co. Inc -- Analyst

Great. Thanks for taking my question. So we're seeing a big media push by all the sportsbooks in the industry. So Jason, just a bigger picture question for you.

I mean, how do you see media transforming draft? I mean do you kind of see yourselves eventually becoming more of sports entertainment product? And, you know, just how should we view how you look at the media opportunity over the next two to three years?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

It's a great question, Jed. You know, really, it starts with two important principles. One, there's a ton of synergy between media and content and what our core products offer. We all know this.

It's -- you know, clearly, there's a demand that gets driven for content by our products, and then, in turn, content drives further demand on the gaming product. So tremendous synergy there. Secondly, we have a good track record of being able to launch new product lines and monetize our customer base, as well as utilize them to acquire a broader customer base. We've done that with multiple products now.

So we think between our data science capabilities and other analytics that we've employed, we're going to be really effective at targeting the right content to the right customers at the right time, and also using what we see consumption on content looking like to be able to better target gaming offers. So that's really the crux of the strategy is to be able to take advantage of those synergies and to be able to add new revenue streams and new sources of user acquisition engagement.

Jed Kelly -- Oppenheimer & Co. Inc -- Analyst

And then as a follow-up, I guess with the VSiN acquisition, I mean, do you plan to create your own channel or put it on more streaming services? I know it's on NESN and a couple of other services. But how do you view VSiN into that overall strategy?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Well, VSiN provides a really important capability, creating content around sports betting, which, you know, is obviously a very core area that our audience focuses on. They do have a channel currently. We're exploring broader distribution and we'll also be creating content for a variety of other services. So lots of plans with them.

They have an incredibly talented team and we're really lucky and fortunate to have them on our side now and look forward to collaborating with them to create great content for customers.

Jed Kelly -- Oppenheimer & Co. Inc -- Analyst

Thank you.

Operator

Our next question come -- sorry, our next question comes from Ben Chaiken with Credit Suisse.

Ben Chaiken -- Credit Suisse -- Analyst

Hey, how's it going? Just to follow up on Vegas Sports Network. Is there a plan to work some of that functionality into the sports betting platform itself? So whether it's news, analysis, help making picks, or is it -- or should we think about it as being kind of a separate entity that helps drive traffic?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

You know, I think it'll be a little bit of both. I do think that the nice thing about VSiN is that we get a capability. So that capability can be utilized, as you noted, in multiple ways. Some of it can be utilized directly within the gaming experience in order to enhance that.

Other ways can be utilized, as you noted, are to drive customer acquisition engagement, adoption of new products through external media and other channels that we'll distribute through. So we're going to use it in both ways. And, you know, really, the important thing we look at is we got a capability to create great content in an area that's very meaningful and important to our customers and our target customers.

Ben Chaiken -- Credit Suisse -- Analyst

Gotcha. Is there any -- and is there any like hesitation with adding more functionality to the OSB platform or is it more slash iGaming or is it more just kind of like on the comp I guess?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Well, we always test everything. So you never know. I'm routinely surprised at things that I thought would perform in a certain way, good or bad, and don't. And that's why we always let the data do the talking.

So we'll test adding different things. And if we find that it's enhancing the customer experience and not distracting people, then, you know, we'll add more. And if not, then we'll pare back. And really, it will be an evolution based on what we're seeing in the data.

Ben Chaiken -- Credit Suisse -- Analyst

Thanks. Appreciate it.

Operator

Our next question comes from Thomas Allen with Morgan Stanley.

Thomas Allen -- Morgan Stanley -- Analyst

Thank you. So just on the revenue. First-quarter revenue was obviously really strong. With your fourth-quarter earnings, you suggested first-quarter revenues would be in the low 20s percent.

And now you're saying 28%. Are you more like tempered on the rest of the year because the results you're seeing in the second quarter so far? Is that seasonality? Is it -- you know, I mean, can you just unlock it a little bit more?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Sure. So I think it really starts with Q1 was an absolutely amazing quarter for us. And some of the reasons why, you know, certainly, there were strong performance in the business and that should carry through for the rest of the year. But there were other reasons such as higher hold than we typically get.

That's just random fluctuations in sporting outcomes, really can't count on that for the rest of the year. And also, you know, of course, the Illinois executive order, which ran through Q1 but in the first few days of Q2 was not renewed. Illinois, as we noted, had become our largest state for sports betting handle. And, you know, while we think we're continuing to be really well-positioned there in terms of market share, I don't expect the overall market to grow as substantially as it could have otherwise.

You know, an absence of new legislation or a renewal of that executive order. So that's another example of something that we know won't continue through the rest of the year and that's feeling a little bit how much Q1 will be as a percentage of the overall year. And then just in general, you know, when you have a great quarter like that, we think it's prudent not to assume every single quarter will be a blowout. So, you know, we're taking a cautious approach and saying that we think that, you know, other quarters will be more in line with what a typical quarter might look like.

And obviously, if some things break our way or just if the underlying business continues to perform as strongly as it has been, then we might see some upside there.

Thomas Allen -- Morgan Stanley -- Analyst

OK. Just a quick one. What was the whole benefit?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

So in -- sorry. Well, what -- the question was on the whole?

Thomas Allen -- Morgan Stanley -- Analyst

Yeah. How much was it?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

I don't think we've -- we shared -- no, we haven't shared exactly what those numbers will. But we can consider sharing some more detail there. What we have said is that there is definitely a higher than average hold rate due to random fluctuations in sports outcomes and I think that that's something that, you know, generally, we've seen evens out over the course of the year but can definitely month to month or, you know, quarter to quarter sometimes have some lumpiness.

Thomas Allen -- Morgan Stanley -- Analyst

Thank you.

Operator

Our next question comes from Michael Graham with Canaccord.

Michael Graham -- Canaccord Genuity -- Analyst

Yeah, thanks, and impressive results. I wanted to ask about MUP growth. You know, I think, typically, Q1 would be seasonally a little bit down sequentially and you were able to grow and you have a few things under the hood there between new activations and retention engagement and potentially, you know, threading in more i-Gaming, you know, acquisitions. And so I just wanted to ask like if you could deconstruct the MUP performance a little bit? And as a follow on, when you're out there in the marketing, especially in digital channels, do you -- can you just make a comment on how crowded some of those channels are from OSB and i-Gaming competitors, or are you more competing against other types of players, or just any color you can provide on that environment would be great?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thanks, Mike. So, you know, first on the MUPs question. Certainly, we saw a much stronger activation and customer acquisition in Q1. So both had pretty significant contribution to the MUPs increase.

I think that what we're seeing is there's just a lot of momentum in the industry right now, and I think that we are finding that our marketing is performing just as it did toward the back half of last year, really at record levels. And our response is incredibly high. Our caps continue to be low despite the fact that we've ramped up our spend and we're just getting excellent return on our marketing, so that's helping to drive a lot of activation of new users as well. So, you know, really, those are the main drivers.

And then, sorry, what was the second question?

Michael Graham -- Canaccord Genuity -- Analyst

I just want to ask if you could comment on the marketing environment, you know, when you're out there.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Yes.

Michael Graham -- Canaccord Genuity -- Analyst

Acquiring players in digital channels. Like how it intenses the competition from your competitors?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Well, what's interesting on digital channels, you know, yes, there is certainly competition within our core market. But also, a lot of where we were competing previously for impressions was with mobile games, and those games I think have been hurt more so than, you know, maybe we would be by the IDFA changes. So we've actually seen some softening in the digital markets due to some of the traditional mobile games companies pulling back a bit. And that's created a favorable environment for us.

I wouldn't say it's tremendously, you know, favorable. It's really kind of more similar to what it looked like before. But, you know, to answer your question directly, we're not really seeing a hyper competitor -- competitive environment right now relative to anything we've seen before. It looks pretty normal and I think it's kind of an offset of, you know, yes, you are seeing better performance for companies like DraftKings but it's also offset by maybe some pullback in the traditional mobile gaming companies.

Michael Graham -- Canaccord Genuity -- Analyst

OK. Thanks, Jason.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you.

Operator

Our next question comes from Carlo Santarelli with Deutsche Bank.

Carlo Santarelli -- Deutsche Bank -- Analyst

Hey, guys, thanks, and good morning. Appreciating the fact that you guys don't want to disclose the whole benefit in the period. If we can kind of just break down the old guidance midpoint and kind of that low 20s range, it would apply you can kind of beat, you know, the implied guidance within the guidance by about $100 million in a quarter. Any chance you guys would be willing to maybe bucket, you know, where that outperformance came? If it's iCasino relative to OSB, relative to DFS? I'm assuming that the two former categories are the lion's share.

But maybe even just if you could split out kind of a delta of the upside, then in relative to that guidance between kind of OSB and iCasino in the period given the very strong start of Michigan?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thanks, Carl. I appreciate the nice words. We're not disclosing any break out of iGaming versus OSB revenue right now. Given some of the trends that have occurred recently with Michigan being so strong on the iGaming side, you know, we certainly saw some benefit from that.

I think that really exceeded our expectations. And as we noted in the earnings call, you know, the growth of -- or the revenue per capita in Michigan on the iGaming side greatly outperformed New Jersey in a similar time period in its first year. And, you know, what was speeded too, but not by nearly as much. So that was certainly a factor.

We mentioned the hold rate that drove OSB revenue a little bit higher than what we would normally have seen based on the betting volumes. So we're not breaking it out, but I would say -- I think it's fair to say that, you know, really, all products across the board, including DFS. We had record numbers for, you know, the last several years for DFS if you look at some of the stats that we disclosed from Super Bowl, and March Madness, and otherwise. We haven't seen growth in that product at these levels since 2015.

So really pleased with how everything's performing across the board and everything contributed to the beat.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great, thank you. If I could just one follow-up. As it pertains to the integration of the SBTech stuff at the end of the 3Q, will that basically for the 4Q be your function back end for every state, or does it kind of go state by state and you take it slowly?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Well, we are going state by state, but we're saying, by the end of Q3, we will be fully complete with every state. So to answer your question, in fourth quarter, we will be on our own proprietary platform in every state. And between now and then, we will take it on a state-by-state basis. This is, of course, assuming we get all the necessary regulatory approvals.

That's obviously a process and that's part of why we are going state by state. But assuming we get all the approvals from just the pure product and tech standpoint, we feel like we're well on track for end of Q3 and maybe even a little bit earlier.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. And then guys, I'm sorry, if you could just take one more? Any commentary around New York and the strategy there given kind of the cloudy regulation as it currently stands?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Well, first of all, really exciting that New York has moved forward mobile sports betting legislation. I know for years there's been speculation about it. And, you know, it's really great to see that it got done. And not only it got done, but has strong support from the legislature, from the governor's office, and really want to thank the legislature and Governor Cuomo for moving that bill through the budget.

As far as our strategy, you know, we're going to wait and see when the RFP comes out, what it looks like. And, you know, we're going to put our best foot forward. And I think we feel, you know, like I said, very excited about the opportunity in New York and we're looking forward to participating in the process. And, you know, hopefully, it'll be a good outcome.

Carlo Santarelli -- Deutsche Bank -- Analyst

Great. Thank you very much, guys.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you.

Operator

Our next question comes from Bernie McTernan with Needham and Company.

Bernie McTernan -- Needham & Company -- Analyst

Mentioned the 600,000 unique devices with DISH. I was just wondering how the customer is using this product? Do you think it's going to be an important part of the customer experience long-term or more niche? Just because, you know, watching TV, already -- everyone already has a second screen next to them with access to the app? And then within that, is the MVPD the more advantageous position to be able to execute this strategy relative to a cable networks or the other way around?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

I think that there are different ways you can execute the strategy that device makers provide potentially another way in addition to the ones you named. And I think the cable networks are a little more challenging. It would have to be something that we're more directly connected to the device or to the network I would think. The first part of your question, you know, I think really what we're trying to do is to create something that makes the convenience of being able to consume whenever you're watching sports on the screen, as well as playing the games and checking your, you know, bets and all that as easy as possible.

I think people will have a mix of things they use. Part of the sort of proliferation of devices all around us has been people don't typically just do things one way or another. Even, you know, as I think about my own behavior. Sometimes, I use my phone to turn my TV on because it's connected.

Sometimes, I just grab the remote and it just sort of whatever feels convenient at the moment. So I think you'll see some people exclusively using that or primarily using that. I think you'll see some people not using it at all. And I think you'll see some people going back and forth.

But what we're going to do is just keep looking at the data, keep optimizing the customer experience, and listen to what our users are saying and what makes their experience more entertaining and more convenient.

Bernie McTernan -- Needham & Company -- Analyst

Thanks, Jason.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you.

Operator

As a reminder, ladies and gentlemen, please limit yourself to one question. Our next question comes from David Katz with Jefferies. One moment.

David Katz -- Jefferies -- Analyst

Good morning. I know we're still a couple of quarters away, but, you know, I wondered if there were any testing, or any learnings, or any interesting surprises one way or the other, you know, around that in advance? Thank you.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Sorry, around what?

David Katz -- Jefferies -- Analyst

The SBTech, the lot which is still a couple of quarters away. Yeah.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Yeah. So we have begun the process. We've done a tremendous amount of testing. You know, we test everything internally.

And then, of course, you know, as we go state by state, we'll get more and more data. And so far, what we're seeing is very encouraging. There's been really only kind of minor things around the edges that we've had to clean up. Otherwise, you know, our internal testing has been really strong at predicting things and we've been able to get everything in order.

So far, so good. It is still early. And as -- you know, to answer your question, yes, as we get closer to the full migration, we'll have more and more states there migrated over and we'll have more and more data to look at and be able to get a sense of how things are going. But from what we're seeing so far, everything's going great.

David Katz -- Jefferies -- Analyst

OK. Thank you. Appreciate it.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you.

Operator

Our next question comes from Stephen Giagola with Cowen.

Stephen Glagola -- Cowen and Company -- Analyst

Hi. Thanks for the question. I just want to touch base on Illinois a little bit more. It seems like you had a Q1 with the No.

1 market share in terms of handle. With remote registration and then in early April, have you seen any impact in your market share so far? And do you expect to maintain that share throughout the year until it goes back to remote registration in early 2022?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Yeah, it's a great question. I think you know, really hard to say for sure but given I don't expect there to be nearly the volume of sign-ups. And I use Iowa for example as a comparison and Iowa, where for the first 18 months after going live, there was no mobile registration. And the first thing I think was like five days of January this year when mobile registration was turned on.

We exceeded the entire previous year in terms of registering. So I think, the volume that comes in when there is mobile registration is just so significant compared to when there's not that. You know, my suspicion would be that market shares sort of stabilized until that returns and hopefully when it returns if it returns. And you know, as you noted, we've been No.

1 in handle, I think since August, every month in Illinois so we feel like we're in a great position. It's obviously disappointing that we won't be able to take mobile registrants or at least for some time. But I think if we, you know, if that were to be the case as it is then, I think, we couldn't be in a stronger position and feel very good about where we are from a market share standpoint in that state.

Stephen Glagola -- Cowen and Company -- Analyst

All right. Thanks, Jason.

Operator

Our next question comes from Vasily Karasyov with Cannonball Research.

Vasily Karasyov -- Cannonball Research -- Analyst

Thank you. Good morning. I wanted to follow up on your comments about online sports betting and media content converging. So there is a situation developing, I'm sure you're very aware of that between Flood and Fox Broadcast Corporation, which could lead to all kinds of structural outcomes in the market.

So with FanDuel becoming a stand-alone publicly traded company in the U.S., maybe some combinations with PokerStars, FOX bet, and so on. So I was wondering if you are -- if you could share your thoughts with us on how that would impact your strategy and your market position?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you. So you know, I know there's a lot of rumor and speculation about that right now. One, we don't really have any insight so it's hard for me to really have any opinion but even if I did, we don't really think that what others are doing in terms of corporate structure and, you know, how that all plays out, really has much of anything to do with our strategy. You know, we're gonna continue to pursue the strategy that we've set out, that we believe will position us to have the best long-term value and continue to be able to consistently meet or exceed the expectations that we set.

And I think being able to focus internally on driving those types of results, has been part of what's driven our previous strong performance. So we're going to continue down that path and there'll be a lot of activity in the market. I think when you have an exciting industry with so much potential, you know, tens of billions of dollars, maybe more potential, you're going to see a lot of different moves by competitors. Obviously, we pay attention to them but it doesn't really change what we're doing.

Vasily Karasyov -- Cannonball Research -- Analyst

Thank you.

Operator

Our next question comes from Joe Stauff with Susquehanna.

Joe Stauff -- Susquehanna International Group -- Analyst

Good morning. Jason, I'm wondering if you could comment or, you know, on overall engagement maybe thus far in the quarter, second quarter -- April, May, early May. And the reason I ask, obviously, is that I realize online sports betting is seasonally softer just given the number of sporting events. And just wondering kind of where engagement is or how it changes? You know maybe commenting specifically on iCasino engagement and in terms of just how that may change.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Yeah. It's a great question. You are right that there is seasonality to the sporting calendar. You know, typically back half of the year is always greater.

It's been a little bit disruptive whatever that typical seasonality has been by all the calendar shifts. So you know, it's a little bit of a unique year for sure. And I think as a result of some of that, there's actually quite a bit on the slate for Q2. NBA and NHL regular seasons are ending in the next week in two -- or two and that'll begin the playoffs.

You know, this year the NBA and NHL playoffs are going to run into July, which I don't think has ever happened before. So that'll create some additional content that hasn't been there in previous years. Obviously, baseball is off to a great start. The PGA has two majors in Q2, you know, the PGA Championship in May and the U.S.

Open in June. Two majors also on the tennis front with the French Open in May going into early June and then Wimbledon is obviously starting toward the end of the quarter. And then there are some exciting things going on in other sports as well -- UFC we recently signed a partnership with. It has two big fights coming up, one on May 15th and one on June 12th, you know, UFC 262 and 263 respectively.

And then this year, there's a lot going on on the soccer side, Euro Cup is happening and start toward the middle of June and, obviously, runs into Q3 -- Champion's League, Premier League. So lots of exciting stuff on the sports calendar. I think more so maybe this year than the prior year, you're going to get a full quarter because of the season -- the shifting, excuse me, in the sports calendars. And you know, we're going to have to see how that all plays out much like last year we're in a bit of unchartered territory with how the sports are overlapping and, obviously, a little tough to predict how NBA does in July when NBA finals do I should say in July when that's never happened before.

So be fun to see and we're just excited, there's a lot of great content out there to provide our customers with.

Joe Stauff -- Susquehanna International Group -- Analyst

Thank you.

Operator

Our next question comes from Shaun Kelley with Bank of America.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Hi, good morning, everyone. Just wanted to ask about some of the marketing efficiency in the quarter. It looked like, you know, things were a lot more efficient on sort of a per-user basis sequentially from the fourth quarter from what we saw throughout last year. And I'm just wondering is that a direct product of efficiency gains or is there some seasonality attached to that as we just think about the balance of 2021?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

You know there's always seasonality to marketing performance. Typically though what that results in is us just dialing up or down where we're investing based on the ROI we're seeing. I think Q1 was very similar to Q3 and Q4 where we spent more than we thought and had lower tax than we thought. So it was almost like we couldn't spend enough to hit our cap targets.

And I think that efficiency was consistent but a lot of what you see is that you know the customers that were acquired in Q3 and Q4 that remained active into Q1 boosted the mob's numbers and, obviously, we continue to add more but more exciting to me is the retention that we're seeing of the customers we acquired in the back half of last year, and I think that was the largest driver of what we saw in them upfront. And as far as future quarters and seasonality go, I think, you'll see typical seasonal patterns. But as I mentioned, there is still this wildcard of this shift in the sports calendar. So you know, I think it'll be a bit different this year than in previous years.

Typically, for example, we've seen good activity during the NBA and NHL playoffs. You know, having that overlap with baseball should provide better than I think typically what we've seen activity in the July timeframe and late June timeframe. And then, I think, also, you know, we'll have to see in the back half of the year what the leagues do in the NBA and NHL, in particular, in terms of when they start their new seasons. Do they try to go back to the typical schedule early Q4 or do they go with the late December, January schedule that they went with this past year? So I think that will also drive some activity.

And then, of course, the NFL, assuming that goes according to plan, which right now we see no reason to believe it won't. And that's, obviously, going to be a big driver of activity as well.

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Thank you very much.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

You're welcome.

Operator

Our next question comes from Chad Beynon with Macquarie.

Chad Beynon -- Macquarie Capital -- Analyst

Good morning, thanks for taking my question. Even with your recent acquisitions of VSiN and BlueRibbon, which are sub $100 million in the quarter. Following your convertible rates, you're still sitting with a ton of cash at the end of the quarter. Based on your projections for 2021 and how you know the business should ramp to become more profitable, how are you thinking about the best use of this cash whether it be bigger acquisitions more, partnerships, or even considering something like a share repurchase, given the sell-off? Thank you.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

That's a great question. I think right now, we're actively exploring multiple opportunities some of which you mentioned and I think that really, you know, we're going to try to do whatever returns best on that capital that's when you take in the capital even when we get the note at 0%, not a high bar there, but still, we have our own internal thresholds for what we want to get return on -- what level of return we want to get on the capital we deploy and we're very disciplined about that. So you know, I think, really, it's going to come down to us just rigorously evaluating different opportunities and if we see great uses of capital that drive really strong returns and we'll do it. If not, we'll be patient and deploy the capital as those things emerge.

Chad Beynon -- Macquarie Capital -- Analyst

Thanks. And then separately, I just wanted to revisit Canada. I understand that there's a federal bill that's kind of hung up right now, there's this there's a separate one in Ontario and it seems like from a parental standpoint, they're extremely interested. If the federal bill doesn't pass, is there a path for you guys to be in the Ontario market? I guess from a limited basis, it won't be a comprehensive product but it still could have some type of a parlay or would you wait for a federal bill to pass for you guys to enter that market? Thank you.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

It's a great question. You know, I think, as you noted, parlays are still possible under current federal law. Obviously, it'd be great to get single event betting where the federal law to change. But parlays are still, obviously, very popular and, I think, perhaps, more importantly, iGaming will be allowable in Canada or, at least, sorry, excuse me, in Ontario.

And that does not have any impact from federal law. So I think those two things both parlay sports betting and I gaming our products we intend to launch regardless of what happens, we're not waiting. And assuming the federal law does change and we'll also offer single-event wagering as well.

Chad Beynon -- Macquarie Capital -- Analyst

Appreciate it. Nice result.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you.

Operator

Our next question comes from Daniel Adam with Loop Capital Markets.

Daniel Adam -- Loop Capital Markets -- Analyst

Hi, good morning. Thanks for taking my question. Jason, when you think about the long-term opportunity for DraftKings, does it make sense at some point to start thinking about the global TAM instead of just North America. Just for context, there is a daily fantasy company in India that reported 100 million users in March.

So when I think about your 1.5 million months, it would seem that the international opportunity for DraftKings could be massive, which no one is really talking about right now. Is that something that factors into your long-term vision?

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Absolutely. It's a great question. So as you noted, there's a huge global opportunity, and as excited as we are in the U.S. and you know as much as we believe the U.S.

will be the largest in the world, the rest of the world will certainly be larger combined. And you know, our ambitions are to be a global company. So we think there's a lot of exciting opportunities out there. We're obviously closely following that daily fantasy company you mentioned and also following regulatory developments in markets around the world.

Lots of things are opening up, not just in the US. So I think that provides a huge runway for our growth. And you know, it's something we haven't talked as much about because we have been so focused in the U.S. But I think you're very smart to point out that there's a huge opportunity there that can keep our growth rolling for many years to come.

Daniel Adam -- Loop Capital Markets -- Analyst

Great. Thanks.

Operator

Our last question comes from Ryan Sigdahl with Craig-Hallum Capital.

Ryan Sigdahl -- Craig-Hallum Capital Group -- Analyst

Good morning, guys. Just curious, you mentioned Michigan and Virginia, they're ramping faster than New Jersey, really strong GGR per capita. But other states haven't ramped quite as well -- Indiana, Pennsylvania, Iowa, West Virginia, etc. So I guess, what gives you confidence that Michigan and Virginia are the better proxies for future states versus the other ones I mentioned? Thanks.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Yeah, it's a great question. I mean, what we showed in our Investor Day is that New Jersey is kind of right around the middle of the pack. So there will be states that grow faster, they'll be seeds that grow slower. But I think what's really interesting with both Michigan and Virginia is that kind of further validates this notion that New Jersey is not some outlier that's just bigger than everything else.

And you know, we didn't have those two states on our Investor Day. Even without those two, New Jersey was already you know slightly below the median for the other states. So this just kind of brings that up even a little bit more and widens that gap more and gives us further confidence that New Jersey is you know at worst a good proxy and at best maybe a conservative proxy when you're trying to size the rest of the states. And then there are a few examples where it's hard to compare apples to apples.

You mentioned Iowa, for example, Iowa's tough to compare because Iowa for the first 18 months had no mobile registration. So you know, clearly, that would make it get off to a slower start. And I think once we saw mobile registration kick in earlier this year in Iowa, we started to see a really strong ramp there. So you know, I think it'll definitely depend.

Pennsylvania is an interesting one. Pennsylvania, we have not invested as deeply in from a customer acquisition standpoint due to the tax rates there. It's just not as profitable as the market for us. So that's another one where I think, you know, perhaps, in a different set up it might have been the place that we could invest more.

But you know, really if you look at it like I said from the macro standpoint, New Jersey is right around the middle of the pack and that was just a question we used to get a lot in the earlier days when everybody's using New Jersey as a proxy for what the rest of the U.S. could look like and I think the data that we've seen emerge further validates that it's a pretty good proxy and maybe even a conservative one.

Ryan Sigdahl -- Craig-Hallum Capital Group -- Analyst

Thanks. Good luck, guys. Thank you.

Operator

Ladies and gentlemen, this concludes the Q&A portion of the call. I'd like to turn the call back over to our host for any closing remarks.

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Thank you all for joining us on today's call. We really appreciate your questions and look forward to continuing our conversations with you. We had a very strong start to 2021 and continue to be excited about the future. DraftKings is well-positioned with $2.8 billion in cash to enter new states as soon as practicable to drive continued product innovation, to acquire customers, and to explore opportunistic M&A.

I hope you all stay safe and well and we look forward to speaking with you on our next earnings call in August.

Operator

[Operator signoff]

Duration: 62 minutes

Call participants:

Stanton Dodge -- Chief Legal Officer

Jason Robins -- Co-Founder, Chief Executive Officer, and Chairman

Jason Park -- Chief Financial Officer

Stephen Grambling -- Goldman Sachs -- Analyst

Jed Kelly -- Oppenheimer & Co. Inc -- Analyst

Ben Chaiken -- Credit Suisse -- Analyst

Thomas Allen -- Morgan Stanley -- Analyst

Michael Graham -- Canaccord Genuity -- Analyst

Carlo Santarelli -- Deutsche Bank -- Analyst

Carlos Santarelli -- Deutsche Bank -- Analyst

Bernie McTernan -- Needham & Company -- Analyst

David Katz -- Jefferies -- Analyst

Stephen Glagola -- Cowen and Company -- Analyst

Vasily Karasyov -- Cannonball Research -- Analyst

Joe Stauff -- Susquehanna International Group -- Analyst

Shaun Kelley -- Bank of America Merrill Lynch -- Analyst

Chad Beynon -- Macquarie Capital -- Analyst

Daniel Adam -- Loop Capital Markets -- Analyst

Ryan Sigdahl -- Craig-Hallum Capital Group -- Analyst

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