#1DRAFT KINGS Q4 2022 BUSINESS UPDATE FEBRUARY 16, 2023 B CEE 32278#2Legal Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements about DraftKings Inc. ("DraftKings", the "Company", "we", "us" and "our") and its industry that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, objectives and expectations of management for future operations (including launches in new jurisdictions and the expected timing thereof), and the impact of COVID-19 on our business and the economy as a whole, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "forecast," “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “propose," "should,” “target," "will," or "would" or the negative thereof or comparable terminology, or by discussions of vision, strategy or outlook. We caution you that the foregoing may not include all of the forward-looking statements made in this presentation. You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this presentation primarily on our current expectations and projections about future events and trends, including the COVID-19 pandemic, that we believe may affect our business, financial condition, results of operations, and prospects. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, including those described in our filings with the Securities and Exchange Commission (the "SEC"), which are available on the SEC's website at www.sec.gov. In addition, the forward-looking statements contained in this presentation relate only to events as of the date on which the statements are made and are based on information available to us as of the date of this presentation. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, including future developments related to the COVID-19 pandemic, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should no place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions or investments. Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit, which we use to supplement our results presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures, which may not be comparable to other similarly titled measures of performance used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, litigation, settlement and related costs, advocacy and other related legal expenses, gain or loss on remeasurement of warrant liabilities and other non-recurring and non-operating costs or income. We define and calculate Adjusted Gross Profit as gross profit before the impact of amortization of acquired intangible assets, depreciation and amortization, and stock-based compensation. We define Adjusted Gross Margin as Adjusted Gross Profit divided by net revenue. We define and calculate Contribution Profit as Adjusted Gross Profit less External Marketing. Reconciliations of Adjus EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit to their most directly comparable financial measures calculated in accordance with GAAP are provided in the Appendix of this presentation. | 2#3Business Update 1 2 3 4 5 Q4 revenue was $855M and Q4 Adjusted EBITDA(¹) was ($50M) or approximately $25M when adjusting out launches in Maryland and Ohio Raising FY 2023 revenue guidance midpoint to $2,950M and FY 2023 Adjusted EBITDA(1) guidance midpoint by $125M due to strong topline results, increased marketing efficiency, and focus on expense management 18 of 19 states were contribution profit(¹) positive for Q4 and 11 states were contribution profit (¹) positive for FY 2022; contribution profit(1) expected to grow from $105M in FY 2022 to >$500M in FY 2023 Fixed expense growth is expected to slow meaningfully in FY 2023 and decelerate further in FY 2024 $1.3B of cash as of 12/31/22 and expect to have >$700M on 12/31/23; expect positive Adjusted EBITDA(¹) in FY 2024 (1) Non-GAAP financial measure. See slides 12-13 in the Appendix of this presentation for reconciliation. | 3#4Q4 Revenue and Adjusted EBITDA Outperformed Guidance Q4 Revenue and Adjusted EBITDA(¹) Guidance Compared to Actual Results $ Millions Revenue Adjusted EBITDA(1) November 4th Guidance (2) $790 ($118) Higher OSB Hold due to Structural Improvement $30 $21 Higher OSB Hold due to Sport Outcomes $10 $7 Better Customer Retention and Monetization (Including Promotions) (1) Non-GAAP financial measure. See slides 12-13 in the Appendix of this presentation for reconciliation. (2) Reflects the midpoint of FY 2022 guidance that was provided on November 4, 2022, less reported results for the 9 months ended September 30, 2022. $25 $15 Expense Management ΝΑ $25 Q4 Actual Results $855 ($50) Adjusted to Exclude Impact of Maryland and Ohio $20 $75 Q4 Results Excluding Maryland and Ohio $875 $25 | 4#5Increasing FY 2023 Guidance Due to Continued Focus on Expense Management While Simultaneously Driving Revenue Growth 2 3 Updated 2023 Guidance vs. Prior 2023 Guidance $ Millions Revenue Adjusted EBITDA(¹) FY 2023 Guidance Provided 11/4/2022 $2,900 ($525) Better Customer Retention & Monetization (Including Promotions) $50 (1) Non-GAAP financial measure. See slides 12-13 in the Appendix of this presentation for reconciliation. $25 Increasing revenue guidance due to strong retention and monetization trends External Marketing Efficiency ΝΑ $50 Lower Compensation & Related Expenses ΝΑ $50 FY 2023 Guidance Provided 2/16/2023 $2,950 ($400) National marketing scale continues to surface efficiency opportunities including not renewing certain team, league, and media deals Slowing compensation expense growth with a renewed focus on increasing productivity of existing employees, rather than adding new employees Reducing certain corporate expenses proportional to headcount expectations (e.g., travel and entertainment, corporate software) | 5#62018-2019 States Are Growing Revenue 50% with Contribution Profit (¹) Growing Faster 2018-2019 States (2) OSB and iGaming FY 2022 vs. FY 2021 Percentage; Basis Points +50% YOY Revenue Growth ■ Strong customer retention Strong handle per retained customer growth Increasing hold percentage Decreasing promotions as a percentage of gross revenue + >400 bps Adjusted Gross Margin(¹) Increase Flow-through of revenue from: Increased handle Increased hold percentage Lower promotional intensity (1) Non-GAAP financial measure. See slides 12-13 in the Appendix of this presentation for reconciliation. (2) Includes New Jersey, West Virginia, Indiana, Pennsylvania, and New Hampshire. + >15% YOY External Marketing Decline Less marketing spend as states mature National marketing efficiencies support lower customer acquisition costs Increased Contribution Profit(1) | 6#7Structural Hold Has Increased Mostly Due to Higher Parlay Mix and Average Leg Count OSB Hold Percentage Improvement FY 2022 vs. FY 2021 Percentage of Handle 6.5% FY 2021 OSB Hold % -0.7% Structural Higher Parlay Handle Mix & Parlay Average Leg Count Note: OSB hold percentage was 8.8% in the second half of 2022 vs. 5.9% in the second half of 2021. ~0.3% Optimized Trading -0.2% Sport Outcomes 7.7% FY 2022 OSB Hold % | 7#8Gaining Operating Leverage on Promotions and External Marketing OSB and iGaming Promotional Intensity Percentage of Gross Revenue FY 2021 Decreased >600bps YoY FY 2022 OSB and iGaming External Marketing per Capita Dollars FY 2021 Decreased >15% YoY FY 2022 | 8#9DRAFT KINGS APPENDIX Berglind T#10Non-GAAP Financial Measures This presentation includes Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit, which are non-GAAP financial measures that DraftKings uses to supplement its results presented in accordance with U.S. GAAP. The Company believes Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit are useful in evaluating its operating performance, similar to measures reported by its publicly-listed U.S. competitors, and regularly used by security analysts, institutional investors and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit are not intended to be substitutes for any U.S. GAAP financial measures, and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, litigation, settlement and related costs, advocacy and other related legal expenses, gain or loss on remeasurement of warrant liabilities and other non-recurring and non-operating costs or income. We define and calculate Adjusted Gross Profit as gross profit before the impact of amortization of acquired intangible assets, depreciation and amortization, and stock-based compensation. We define Adjusted Gross Margin as Adjusted Gross Profit divided by net revenue. We define and calculate Contribution Profit as Adjusted Gross Profit less External Marketing. DraftKings includes non-GAAP financial measures because they are used by management to evaluate the Company's core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit exclude certain expenses that are required in accordance with U.S. GAAP because they are non-recurring items (for example, in the case of transaction-related costs and advocacy and other related legal expenses), non-cash expenditures (for example, in the case of depreciation and amortization, remeasurement of warrant liabilities and stock-based compensation), or non-operating items which are not related to the Company's underlying business performance (for example, in the case of interest income and expense and litigation, settlement and related costs). Information reconciling forward-looking fiscal year 2023 Adjusted EBITDA and Contribution Profit to their most directly comparable U.S. GAAP financial measures, net income (loss) and gross profit, respectively, is unavailable to DraftKings without unreasonable effort due to, among other things, certain items required for such reconciliations being outside of DraftKings' control and/or not being able to be reasonably predicted. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with U.S. GAAP, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. DraftKings provides a range for its Adjusted EBITDA and Contribution Profit forecasts that it believes will be achieved; however, the Company cannot provide any assurance that it can predict all of the components of the Adjusted EBITDA or Contribution Profit calculations. DraftKings provides a forecast for Adjusted EBITDA and Contribution Profit because it believes that Adjusted EBITDA and Contribution Profit, when viewed with DraftKings' results calculated in accordance with U.S. GAAP, provide useful information for the reasons noted above. However, Adjusted EBITDA and Contribution Profit are not measures of financial performance or liquidity under U.S. GAAP and, accordingly, should not be considered as alternatives to net income (loss), gross profit, cash flow from operating activities or as indicators of operating performance or liquidity. | 10#11Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses GAAP to Non-GAAP Expense Reconciliation $ Millions GAAP Operating Expenses Cost of Revenue Sales and Marketing General and Administrative Product and Technology Total GAAP Operating Expenses Non-GAAP Operating Expense Adjustments Cost of Revenue Sales and Marketing General and Administrative Product and Technology Total Adjustments Adjusted Operating Expenses Cost of Revenue Sales and Marketing General and Administrative Product and Technology Total Adjusted Operating Expenses Totals may not sum due to rounding. (a) (b) (d) (a) (d) (a) TETO (c) (d) (e) (f) (a) (d) 31-Dec-22 30-Sep-22 $485 $345 $173 $83 $1,087 ($1) ($30) ($14) ($17) ($1) ($92) ($2) ($2) ($1) ($20) ($2) ($182) $440 $327 $77 $61 $905 $373 $322 $186 $76 $957 ($1) ($30) ($12) ($10) ($1) ($92) ($1) ($2) ($1) ($17) ($23) ($1) ($191) $330 $311 $74 $52 $766 30-Jun-22 $313 $198 $188 $77 $775 ($1) ($27) ($10) ($12) ($1) ($98) ($11) ($2) ($2) ($24) ($3) ($191) $275 $185 $75 $50 $584 31-Mar-22 $313 $321 $217 $81 $933 ($1) ($19) ($9) ($14) ($1) ($144) ($4) ($2) ($2) ($1) ($28) ($2) ($226) $284 $307 $64 $52 $707 31-Dec-21 $253 $278 $241 $70 $842 ($1) ($20) ($9) ($15) ($0) ($142) ($10) ($1) ($1) ($13) ($26) ($1) ($241) $223 $263 $74 $42 $601 30-Sep-21 $171 $304 $220 $65 $759 ($2) ($20) ($7) ($14) ($0) ($134) ($4) ($1) ($5) ($18) ($26) ($1) ($233) $142 $289 $58 $38 $526 30-Jun-21 $187 $171 $199 $63 $619 ($1) ($21) ($7) ($14) ($0) ($132) ($8) ($1) ($4) ($13) ($25) ($1) ($226) $159 $157 $41 $36 $393 31-Mar-21 $183 $229 $169 $56 $637 ($1) ($19) ($7) ($9) ($0) ($122) ($3) ($1) ($1) ($2) ($20) ($1) ($186) $157 $220 $41 $34 $452 (a) Stock-based compensation expense (b) Amortization of acquired intangible assets (c) Transaction expenses (d) Depreciation & amortization (e) Litigation (f) Other | 11#12Reconciliation of Gross Profit to Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit GAAP Gross Profit to Non-GAAP Adjusted Gross Profit, Adjusted Gross Margin, and Contribution Profit Reconciliations $ Millions Net Revenue GAAP Gross Profit Depreciation and Amortization Acquisition Amortization Stock-based Compensation Adjusted Gross Profit Adjusted Gross Margin External Marketing Contribution Profit Totals may not sum due to rounding. FY 2022 $2,240 $756 $45 $106 $4 $912 41% (807) $105 FY 2021 $1,296 $502 $30 $80 $5 $616 48% (713) ($97) | 12#13Reconciliation of Net Income (Loss) to Adjusted EBITDA Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation $ Thousands Adjusted EBITDA We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense (net), income tax provision or benefit, and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, litigation, settlement and related costs, advocacy and other related legal expenses, gain or loss on remeasurement of warrant liabilities and other non-recurring and non-operating costs or income, as described in the reconciliation. Revenue Cost of revenue Sales and marketing Product and technology General and administrative Loss from operations Other income (expense): Interest income (expense), net Gain (loss) on remeasurement of warrant liabilities Other income (expense), net Loss before income tax provision (benefit) and loss from equity method investment Income tax provision (benefit) (Gain) loss from equity method investment Net loss attributable to common stockholders Adjusted for: Depreciation and amortization (¹) Interest expense (income), net Income tax provision (benefit) Stock-based compensation (²) Transaction-related costs(3) Litigation, settlement and related costs Advocacy and other related legal expenses (5) (Gain) loss on remeasurement of warrant liabilities Other non-recurring and non-operating (income) costs (6) Adjusted EBITDA Three months ended December 31 2022 2021 $ $ 855,133 485,435 345,282 83,394 173,244 (232,222) 10,324 9,197 (19,866) (232,567) 9,714 416 (242,697) 48,623 (10,324) 9,714 130,163 2,285 1,224 (9,197) 20,282 (49,927) $ $ 473,325 253,182 278,444 69,639 240,816 (368,756) Year ended December 31, 2022 2021 32,538 (886) 6,615 184,047 10,055 1,459 12,713 (32,970) (15,240) (127,966) $ 2,240,461 1,484,273 1,185,977 318,247 763,720 (1,511,756) 886 18,702 32,970 29,396 11,951 20,700 (322,949) (1,442,958) 6,615 (67,866) (3,267) 2,895 (326,297) $ (1,377,987) 169,252 (18,702) (67,866) 578,799 17,315 7,010 16,558 (29,396) (16,764) (721,781) $ 1,296,025 794,162 981,500 253,655 828,325 (1,561,617) 1,957 30,065 11,951 (1,517,644) 8,269 (2,718) $ (1,523,195) 121,138 (1,957) 8,269 683,293 25,316 10,392 40,415 (30,065) (9,739) (676,133) (1) The amounts include the amortization of acquired intangible assets of $106.1 million and $80.1 million for 2022 and 2021, respectively. (2) Reflects stock-based compensation expenses resulting from the issuance of awards under incentive plans. (3) Includes capital markets advisory, consulting, accounting and legal expenses related to evaluation, negotiation and integration costs incurred in connection with pending or completed transactions and offerings, including costs include those relating to the GNOG acquisition in 2022 and 2021. (4) Primarily includes external legal costs related to litigation and litigation settlement costs deemed unrelated to our core business operations. Includes certain non-recurring and non-ordinary course costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate certain product offerings and are actively seeking licensure, or similar approval, for those product offerings. For 2022, those costs primarily related to our support of Proposition 27 in California. For 2021, those costs primarily related to our support of Proposition 27 in California and our support of the sports betting ballot initiative in Florida. The amounts presented exclude (i) costs relating to advocacy efforts and other legal expenses in jurisdictions where we do not operate that are incurred in the ordinary course of business and (ii) costs relating to advocacy efforts and other legal expenses incurred in jurisdictions where related legislation has been passed and we currently operate. (6) Primarily includes the change in fair value of certain financial assets, as well as our equity method share of investee's losses and other costs relating to non-recurring and non-operating items. (5) Due to the timing of the consummation of the GNOG acquisition, the above periods, to the extent applicable, exclude GNOG's operations prior to May 5, 2022. | 13#14DraftKings KPI Comparison Key Performance Indicators Millions; Dollars Monthly Unique Payers ("MUPS") We define MUPs as the number of unique paid users per month who had one or more real-money, paid engagements across one or more of our Sportsbook, iGaming, DFS, or Marketplace products via our technology. For reported periods longer than one month, we average the MUPS for the months in the reported period. MUPS is a key indicator of the scale of our online gaming user base and awareness of our brand. We believe that year-over-year growth in MUPS is generally indicative of the long-term revenue growth potential of our online gaming product offerings, although MUPs in individual periods may be less indicative of our longer-term expectations. Average Revenue per MUP ("ARPMUP") We define and calculate ARPMUP as the average monthly revenue, excluding revenue from gaming software services, for a reporting period, divided by the average number of MUPS for the same period. ARPMUP represents our ability to drive usage and monetization of our product offerings. We use ARPMUP to analyze comparative revenue growth and measure customer monetization and engagement trends. Average Monthly Unique Payers ("MUPS") (in millions) Average Revenue per MUP ("ARPMUP") (in whole dollars) Three months ended December 31, 2022 2.6 $109 2021 2.0 $77 | 14#15Non-GAAP Adjusted Earnings per Share Build Adjusted Earnings per Share Build: Three Months Ended December 31, 2022 Dollars $(0.54) GAAP Reported EPS $0.29 Stock Based Compensation $0.03 $0.07 Other Non-GAAP Adj.¹) Amort. of acq. intangibles (1) Note: Weighted average number of shares used to calculate Adjusted EPS for Q4 2022 was 449mm; totals may not sum due to rounding. (1) Other Non-GAAP Adj. primarily includes advocacy and other related legal expenses. $0.02 Adj. to Discrete Tax Benefit $(0.14) Adjusted EPS | 15#16DraftKings Share Count Detail Share Count as of December 31, 2022 Thousands Common Shares Outstanding (31-December-22) Vested Stock Options @ TSM(¹) Memo: Vested Stock Options Diluted Shares Outstanding (With Vested Stock Options @ TSM) DEAC Private Placement Warrants (²) GNOG Private Placement Warrants (3) Fully Diluted Shares Outstanding (With Vested Stock Options @ TSM) Table does not include shares of Class B common stock, which have no economic or participating rights. Excludes any potential dilution from performance-based options and RSUS. (1) Based on Treasury Stock Method ("TSM"); assumes DraftKings Class A share price as of 15-February-2022 and strike price of $5.23 per stock option. (2) Based on TSM; assumes DraftKings Class A share price as of 15-February-2022 and strike price of $11.50 per warrant. (3) Based on TSM; assumes DraftKings Class A share price as of 15-February-2022. Strike price of $31.50 per warrant is above the current share price of DraftKings Class A common stock, so the dilutive effect is 0. 450,575 17,181 24,350 467,756 565 468,321 | 16#17Share Dilution Due to SBC Expected to be <75th Percentile of Peer Group in 2023 and 2024 Historical and Projected Common Shares Outstanding Millions Outstanding (Beginning of Year) Transaction activity(¹) Vesting Activity (2) Treasury shares repurchased Stock options exercised Warrants exercised Outstanding (End of Year) 3-Year CAGR(4) (End of Year) Due to Stock-based Compensation Totals may not sum due to rounding. (1) Includes M&A activity and common stock offerings. 2020 185 170 16 (7) 15 18 396 2021 396 1 2 (0) 9 0 408 2022 408 29 12 (1) m 0 451 The 75th percentile vesting burn rate from SBC for the last three years for our peer group (3) is 4.4% 2023E 451 0 21 (3) 3 1 473 3.8% (2) Based on management achieving 100% payout on long-term equity incentive plan; excluding potential share repurchases. (3) Peer group from our 2022 definitive proxy statement includes: CarGurus, Chegg, Churchill Downs, Coupa Software, DocuSign, Electornic Arts, Etsy, HubSpot, Lyft, Rapid7, Roku, Snap, Take-Two, The Trade Desk, Twittter, Zscaler, and Zynga. Slack and Grubhub were not included in peer group calculation as a result of being acquired. (4) CAGR is calculated as 3-year prior beginning shares plus transaction activity, vesting activity, stock options exercised, and warrants exercised divided by 3-year prior beginning shares plus transaction activity, raised to the power of 1/3, minus 1. 2024E 473 0 9 (2) 3 1 484 3.8% | 17#18DRAFT KINGS THANK YOU Berglind T