0001104659-20-124673 | 10-Q | XBRL Viewer

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 11, 2020
Document Information [Line Items]
Entity Registrant Name	DraftKings Inc.
Document Period End Date	Sep. 30, 2020
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Entity Central Index Key	0001772757
Entity Current Reporting Status	Yes
Amendment Flag	false
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Shell Company	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Trading Symbol	DKNG
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		391,713,826
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		393,013,951

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,140,907	$ 76,533
Cash reserved for users	257,432	144,000
Receivables reserved for users	29,099	19,828
Accounts receivable	46,084	10,016
Prepaid expenses and other current assets	12,334	10,771
Total current assets	1,485,856	261,148
Property and equipment, net	39,482	25,945
Intangible assets, net	549,252	33,939
Goodwill	486,327	4,738
Equity method investment	2,141	2,521
Deposits and other non-current assets	3,601	2,434
Total assets	2,566,659	330,725
Current liabilities:
Accounts payable and accrued expenses	226,322	85,295
Liabilities to users	286,506	163,035
Revolving credit line	0	6,750
Total current liabilities	512,828	255,080
Convertible promissory notes	0	68,363
Other long-term liabilities	59,088	56,862
Total liabilities	571,916	380,305
Commitments and contingent liabilities (Note 15)
Stockholder's equity (deficit):
Additional paid-in capital	3,517,200	949,186
Accumulated deficit	(1,576,654)	(998,784)
Accumulated other comprehensive income	54,123	0
Total stockholders' equity (deficit)	1,994,743	(49,580)
Total liabilities and stockholders' equity (deficit)	2,566,659	330,725
Class A common stock
Stockholder's equity (deficit):
Common stock	35	18
Class B common stock
Stockholder's equity (deficit):
Common stock	$ 39	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2020	Dec. 31, 2019
Class A common stock
Common shares, par value	$ 0.0001	$ 0.0001
Common shares, shares authorized	900,000	735,000
Common shares, shares issued	357,347	184,626
Common shares, shares outstanding	357,347	184,626
Class B common stock
Common shares, par value	$ 0.0001
Common shares, shares authorized	900,000
Common shares, shares issued	393,014
Common shares, shares outstanding	393,014

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 132,836	$ 67,014	$ 292,309	$ 192,496
Cost of revenue	96,569	25,332	187,315	64,718
Sales and marketing	203,339	58,351	303,233	124,867
Product and technology	53,909	14,323	102,499	39,645
General and administrative	127,376	25,185	274,180	78,181
Loss from operations	(348,357)	(56,177)	(574,918)	(114,915)
Other income (expense):
Interest income (expense), net	686	277	(2,253)	1,364
Loss before income tax benefit (provision)	(347,671)	(55,900)	(577,171)	(113,551)
Income tax benefit (provision)	13	(19)	(319)	(35)
Loss from equity method investment	(95)	0	(380)	0
Net Loss attributable to common shareholders	$ (347,753)	$ (55,919)	$ (577,870)	$ (113,586)
Loss per share attributable to common stockholders:
Basic and diluted	$ (0.98)	$ (0.30)	$ (2.08)	$ (0.61)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (347,753)	$ (55,919)	$ (577,870)	$ (113,586)
Other comprehensive income (loss):
Foreign currency translation adjustments arising during period	29,137	0	54,123	0
Comprehensive loss	$ (318,616)	$ (55,919)	$ (523,747)	$ (113,586)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	As previously reported Ordinary Shares Class A common stock	As previously reported Additional Paid-in Capital	As previously reported Accumulated Deficit	As previously reported Convertible Redeemable Preferred Stock	As previously reported	Restatement Adjustment Ordinary Shares Class A common stock	Restatement Adjustment Additional Paid-in Capital	Restatement Adjustment Convertible Redeemable Preferred Stock	Restatement Adjustment	Ordinary Shares Class A common stock	Ordinary Shares Class B common stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Comprehensive Income (loss)	Class A common stock	Total
Increase (Decrease) in Stockholders' Equity
Conversion of shares due to merger recapitalization						$ (366)	$ 261,643	$ (261,277)	$ 261,277
Conversion of shares due to merger recapitalization (in shares)						(200,756)		(111,969)
Balance at the beginning at Dec. 31, 2018	$ 384	$ 670,439	$ (856,050)	$ 261,277	$ (185,227)					$ 18		$ 932,082	$ (856,050)			$ 76,050
Balance at the beginning (in shares) at Dec. 31, 2018	384,009			111,969						183,253
Increase (Decrease) in Stockholders' Equity
Issuance of Series F preferred stock												7,245				7,245
Issuance of Series F preferred stock (in shares)										1,018
Exercise of stock options												126				126
Exercise of stock options (in shares)										110
Stock-based compensation expense												4,831				4,831
Net loss													(29,554)			(29,554)
Balance at the end at Mar. 31, 2019										$ 18		944,284	(885,604)			58,698
Balance at the end (in shares) at Mar. 31, 2019										184,381
Balance at the beginning at Dec. 31, 2018	$ 384	670,439	(856,050)	$ 261,277	(185,227)					$ 18		932,082	(856,050)			76,050
Balance at the beginning (in shares) at Dec. 31, 2018	384,009			111,969						183,253
Increase (Decrease) in Stockholders' Equity
Equity consideration issued to acquire SBTech																$ 0
Exercise of stock options (in shares)																770,000
Foreign currency translation																$ 0
Net loss																(113,586)
Balance at the end at Sep. 30, 2019										$ 18		939,454	(969,636)			(30,164)
Balance at the end (in shares) at Sep. 30, 2019										184,327
Balance at the beginning at Mar. 31, 2019										$ 18		944,284	(885,604)			58,698
Balance at the beginning (in shares) at Mar. 31, 2019										184,381
Increase (Decrease) in Stockholders' Equity
Issuance of Series F preferred stock												559				559
Shares issued in Offering, net of issuance costs												438				438
Shares issued in Offering, net of issuance costs										674
Issuance of Common Stock for In-kind Transfer												535				535
Issuance of Common Stock for In-kind Transfer (in shares)										124
Exercise of stock options												407				407
Exercise of stock options (in shares)										527
Stock-based compensation expense												1,844				1,844
Warrants												537				537
Net loss													(28,113)			(28,113)
Balance at the end at Jun. 30, 2019										$ 18		948,604	(913,717)			34,905
Balance at the end (in shares) at Jun. 30, 2019										185,706
Increase (Decrease) in Stockholders' Equity
Issuance of Common Stock for In-kind Transfer												633				633
Issuance of Common Stock for In-kind Transfer (in shares)										125
Exercise of stock options												95				95
Exercise of stock options (in shares)										122
Stock-based compensation expense												1,844				1,844
Repurchase of Series F Preferred Stock												(11,722)				(11,722)
Repurchase of Series F Preferred Stock (in Shares)										(1,626)
Foreign currency translation																0
Net loss													(55,919)			(55,919)
Balance at the end at Sep. 30, 2019										$ 18		939,454	(969,636)			(30,164)
Balance at the end (in shares) at Sep. 30, 2019										184,327
Increase (Decrease) in Stockholders' Equity
Conversion of shares due to merger recapitalization						$ (372)	$ 258,743	$ (258,371)	$ 258,371
Conversion of shares due to merger recapitalization (in shares)						(204,984)		(110,250)
Balance at the beginning at Dec. 31, 2019	$ 390	690,443	(998,784)	$ 258,371	(307,951)					$ 18		949,186	(998,784)			(49,580)
Balance at the beginning (in shares) at Dec. 31, 2019	389,610			110,250						184,626
Increase (Decrease) in Stockholders' Equity
Issuance of Series F preferred stock												11,000				11,000
Issuance of Series F preferred stock (in shares)										1,526
Exercise of stock options												467				467
Exercise of stock options (in shares)										456
Stock-based compensation expense												4,842				4,842
Net loss													(68,680)			(68,680)
Balance at the end at Mar. 31, 2020										$ 18		965,495	(1,067,464)			(101,951)
Balance at the end (in shares) at Mar. 31, 2020										186,608
Balance at the beginning at Dec. 31, 2019	$ 390	$ 690,443	$ (998,784)	$ 258,371	$ (307,951)					$ 18		949,186	(998,784)			(49,580)
Balance at the beginning (in shares) at Dec. 31, 2019	389,610			110,250						184,626
Increase (Decrease) in Stockholders' Equity
DEAC shares recapitalized, net of redemptions and equity issuance costs of $10,631															$ 665,485
Equity consideration issued to acquire SBTech																$ 789,064
Exercise of stock options (in shares)																6,024,000
Foreign currency translation																$ 54,123
Net loss																(577,870)
Balance at the end at Sep. 30, 2020										$ 35	$ 39	3,517,200	(1,576,654)	$ 54,123		1,994,743
Balance at the end (in shares) at Sep. 30, 2020										357,348	393,014
Balance at the beginning at Mar. 31, 2020										$ 18		965,495	(1,067,464)			(101,951)
Balance at the beginning (in shares) at Mar. 31, 2020										186,608
Increase (Decrease) in Stockholders' Equity
Merger recapitalization, net repurchase of $7,192 and issuance costs of $11,564												(18,756)				(18,756)
Merger recapitalization, net repurchase of $7,192 and issuance costs of $11,564 (in shares)										(278)
Conversion of Convertible Notes to common shares										$ 1		112,544				112,545
Conversion of Convertible Notes to common shares (in shares)										11,254
DEAC shares recapitalized, net of redemptions and equity issuance costs of $10,631										$ 7		665,478				665,485
DEAC shares recapitalized, net of redemptions and equity issuance costs of $10,631 (in shares)										74,122
Equity consideration issued to acquire SBTech										$ 4		789,060				789,064
Equity consideration issued to acquire SBTech (in shares)										40,739
Shares issued for earn outs - SBTech (in shares)										720
Shares issued for earn outs - DEAC and DK										$ 1		(1)
Shares issued for earn outs - DEAC and DK (in shares)										5,280
Shares issued for exercise of warrants										$ 2		200,465				200,467
Shares issued for exercise of warrants (in shares)										17,519
Shares issued in Offering, net of issuance costs										$ 2		620,798				620,800
Shares issued in Offering, net of issuance costs										16,000
Exercise of stock options												5,599				5,599
Exercise of stock options (in shares)										2,287
Stock-based compensation expense											$ 39	54,447				54,486
Stock-based compensation expense (in shares)											393,014
Foreign currency translation														24,986		24,986
Net loss													(161,437)			(161,437)
Balance at the end at Jun. 30, 2020										$ 35	$ 39	3,395,129	(1,228,901)	24,986		2,191,288
Balance at the end (in shares) at Jun. 30, 2020										354,251	393,014
Increase (Decrease) in Stockholders' Equity
Shares issued for exercise of warrants												1,041				1,041
Shares issued for exercise of warrants (in shares)										91
Exercise of stock options												3,996				3,996
Exercise of stock options (in shares)										3,006
Stock-based compensation expense												117,034				117,034
Foreign currency translation														29,137		29,137
Net loss													(347,753)			(347,753)
Balance at the end at Sep. 30, 2020										$ 35	$ 39	$ 3,517,200	$ (1,576,654)	$ 54,123		$ 1,994,743
Balance at the end (in shares) at Sep. 30, 2020										357,348	393,014

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Parenthetical) $ in Thousands	3 Months Ended
	Jun. 30, 2020 USD ($)
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Merger recapitalization, repurchase	$ 7,192
Merger recapitalization, issuance costs	11,564
DEAC shares recapitalized, Redemptions and equity issuance costs	10,631
Shares issued in Offering, issuance costs	$ 19,200

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating Activities:
Net loss	$ (577,870)	$ (113,586)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization	49,967	9,629
Non-cash interest expense	3,114	16
Stock-based compensation expense, including value of Class B common shares	176,362	8,519
Loss from equity method investment	380	0
Deferred income taxes	(544)	27
Other non-cash expenses	0	2,614
Change in operating assets and liabilities, net of effect of Business Combination
Cash reserved for users	(113,432)	(25,467)
Receivables reserved for users	(9,271)	(450)
Accounts receivable	(15,427)	908
Prepaid expenses and other current assets	534	(1,132)
Deposits and other non-current assets	(64)	(150)
Accounts payable and accrued expenses	112,260	11,841
Settlement liability	0	(295)
Other long-term liabilities	9,229	18,291
Liabilities to users	123,471	25,601
Net cash flows used in operating activities	(241,291)	(63,634)
Cash Flows from Investing Activities:
Purchases of property and equipment	(8,233)	(15,892)
Cash paid for internally developed software costs	(18,821)	(10,079)
Acquisition of gaming licenses	(7,760)	(437)
Cash paid for Business Combination, net of cash acquired	(176,819)	0
Net cash flows used in investing activities	(211,633)	(26,408)
Financing Activities:
Cash buyout of unaccredited investors	(7,192)	0
Issuance costs related to merger recapitalization	(11,564)	0
Net proceeds from issuance of convertible promissory notes	41,077	0
Proceeds from recapitalization of DEAC shares, net of issuance costs	667,999	0
Proceeds from shares issued for warrants	201,508	0
Proceeds from issuance of Class A common stock, net of issuance costs	620,800	439
Proceeds from exercise of stock options	10,062	628
Net payment of revolving credit line	(6,750)	0
Net proceeds from issuance of redeemable convertible preferred stock	0	7,804
Repurchase of preferred stock	0	(722)
Net cash flows provided by financing activities	1,515,940	8,149
Effect of foreign exchange rates on cash and cash equivalents	1,358	0
Net increase (decrease) in cash, cash equivalents and restricted cash	1,064,374	(81,893)
Cash and cash equivalents at the beginning of period	76,533	117,908
Cash and cash equivalents, end of period	1,140,907	36,015
Supplemental Disclosure of Noncash Investing and Financing Activities
Conversion of convertible notes and accrued interest to common shares	112,545	0
Increase in net liabilities acquired from DEAC	2,514	0
Equity consideration issued to acquire SBTech	789,064	0
Non-cash Redemption of Series F redeemable convertible preferred to stock through issuance of Promissory Note	0	11,000
Decrease of accounts payable and accrued expenses from gaming licenses	(1,000)	0
Supplemental Disclosure of Cash Activities
Cash paid for interest	$ 417	$ 184

Description of Business	9 Months Ended
Description of Business	Sep. 30, 2020
Description of Business
Description of Business	1.Description of Business DraftKings Inc., a Nevada corporation (the “Company”, “DraftKings”, “we” or “us”), was incorporated in Nevada as DEAC NV Merger Corp., a wholly owned subsidiary of our legal predecessor, Diamond Eagle Acquisition Corp. (“DEAC”), a special purpose acquisition company. On April 23, 2020, DEAC consummated the Business Combination Agreement (the “Business Combination”) dated December 22, 2019, as amended on April 7, 2020 and, in connection therewith, (i) DEAC merged with and into us, whereby we survived the merger and became the successor issuer to DEAC by operation of Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) we changed our name to “DraftKings Inc.,” (iii) we acquired DraftKings Inc., a Delaware corporation (“Old DK”), by way of a merger and (iv) we acquired all of the issued and outstanding share capital of SBTech (Global) Limited (“SBTech”). Upon consummation of the preceding transactions, Old DK and SBTech became wholly owned subsidiaries of the Company. DraftKings is a digital sports entertainment and gaming company. The Company’s business-to-consumer (“B2C”) segment provides users with daily fantasy sports (“DFS”), sports betting (“Sportsbook”) and online casino (“iGaming”) products. The Company’s business-to-business (“B2B”) segment is involved in the design, development and licensing of sports betting and casino gaming software for its Sportsbook and casino gaming products. In May 2018, the Supreme Court (the “Court”) struck down on constitutional grounds the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), a law that prohibited most states from authorizing and regulating sports betting. Since the Court’s decision, many states have legalized sports betting. The U.S. jurisdictions with statutes legalizing online sports betting as of September 30, 2020 are Colorado, Illinois, Indiana, Iowa, Michigan, Nevada, New Hampshire, New Jersey, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Virginia, Washington, D.C and West Virginia. The jurisdictions with statutes legalizing sports betting at certain land-based retail locations are Arkansas, Colorado, Delaware, Illinois, Indiana, Iowa, Michigan, Mississippi, Montana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Puerto Rico, Rhode Island, Washington, Washington, D.C and West Virginia. The jurisdictions with statutes legalizing online casinos are Michigan, New Jersey, Pennsylvania and West Virginia. Several of the aforementioned jurisdictions have enacted laws authorizing sports betting online or in retail locations, but such operations have not yet begun. As of September 30, 2020, the Company operates online Sportsbooks in Colorado, Illinois, Indiana, Iowa, New Hampshire, New Jersey, Oregon (B2B), Pennsylvania, and West Virginia, has retail Sportsbooks in Colorado, Illinois, Iowa, Mississippi, New Hampshire, New Jersey and New York and has iGaming products in New Jersey, Pennsylvania and West Virginia. The Company also has arrangements in place with land-based casinos to expand operations into additional states upon the passing of the relevant legislation and the issuance of related regulations and the receipt of required licenses. The novel coronavirus (“COVID-19”) has adversely impacted global commercial activity and contributed to significant volatility in financial markets. The COVID-19 pandemic has disrupted global supply chains and adversely impacted many different industries for most of 2020. COVID-19 could have a continued material adverse impact on economic and market conditions and trigger a period of continued global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the extent and the duration of the economic impact of COVID-19. COVID-19 therefore presents material uncertainty and risk with respect to the Company and its performance and could affect the Company’s financial results in a materially adverse way. The direct impact of COVID-19 on the business of DraftKings beyond disruptions to normal business operations in several offices primarily results from the suspension and cancellation of sports seasons and sporting events. During the July to September time period, major professional sports leagues including the NBA and the NHL resumed their seasons, MLB began its season after a three month delay, and the NFL season began as originally planned. The return of major sports and events, as well as the unique and concentrated sports calendar in this time period, generated significant user interest and activity in the Company’s Sportsbook and DFS product offerings. However, it remains possible that sports seasons and sporting events may be suspended or cancelled due to COVID-19 outbreaks. The suspension and alteration of sports seasons and sporting events earlier in the year reduced customers’ use of, and spending on, the Company’s Sportsbook and DFS product offerings and has caused the Company to issue refunds for canceled events. Additionally, while retail casinos where the Company has branded Sportsbooks and DFS have reopened, they continue to operate with reduced capacity. The Company’s revenues vary based on sports seasons and sporting events amongst other things, and cancellations, suspensions or alterations resulting from COVID-19 are likely to adversely affect the Company’s revenue, possibly materially. However, the Company’s product offerings that do not rely on sports seasons and sporting events, such as iGaming, may partially offset this adverse impact on revenue. DraftKings is also innovating to generate more products that do not rely on traditional sports seasons and sporting events, for example, products that permit wagering and contests on events such as eSports, simulated NASCAR and League of Legends. A significant or prolonged decrease in consumer spending on entertainment or leisure activities would likely adversely affect demand for the Company’s product offerings, reducing cash flows and revenues, and thereby materially harming our business, financial condition and results of operations. As steps taken to mitigate the spread of COVID-19 have necessitated a shift away from a traditional office environment for many employees, the Company has business continuity programs in place to ensure that employees are safe and that the business continues to function while its employees work remotely.

Summary of Significant Accounting Policies and Practices

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies and Practices

Summary of Significant Accounting Policies and Practices

2. Summary of Significant Accounting Policies and Practices

Basis of Presentation and Principles of Consolidation

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States (“U.S. GAAP”) for interim reporting. Accordingly, certain notes or other information that are normally required by U.S. GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s audited financial statements and related notes as of and for the year ended December 31, 2019. The accompanying unaudited condensed consolidated financial statements are unaudited; however, in the opinion of management, they include all normal and recurring adjustments necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year, due to seasonal fluctuations in the Company’s revenue as a result of timing of various sports seasons, sporting events and other factors.

Pursuant to the Business Combination, the merger between a subsidiary of DEAC and Old DK was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, DEAC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old DK issuing stock for the net assets of DEAC, accompanied by a recapitalization. The net assets of DEAC are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Old DK. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination. Further, Old DK was determined to be the accounting acquirer in the SBTech Acquisition, as such, the acquisition is considered a business combination under ASC 805, and was accounted for using the acquisition method of accounting. DraftKings recorded the fair value of assets acquired and liabilities assumed from SBTech. The presented financial information for the three months and nine months ended September 30, 2020 includes the financial information and activities for SBTech for the period from April 24, 2020 to (and including) September 30, 2020 (160 days).

The accompanying unaudited condensed consolidated financial statements include the accounts and operations of the Company. All intercompany balances and transactions have been eliminated. Certain amounts from a prior period, which are not material, have been reclassified to conform with the current period presentation.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of foreign currency translation adjustments related to the effect of foreign exchange on the value of our assets and liabilities denominated in Euros. The cumulative net translation gain or loss is included in the unaudited condensed consolidated statements of comprehensive loss.

Foreign Currency

Our reporting currency is the U.S. dollar while the functional currency of the Company’s non-U.S. subsidiaries is the Euro. The financial statements of the Company’s non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from translating the local currency financial statements into U.S. dollars are contemplated when determining other comprehensive income (loss).

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions reflected in the financial statements relate to and include, but are not limited to, the valuation and expensing of equity awards; accounting for contingencies and uncertainties; fair value estimates of embedded derivatives; purchase price allocations, including fair value estimates of intangible assets; the estimated useful lives of fixed assets and intangible assets, including internally developed software costs; and accrued expenses.

Going Concern

Based on anticipated spend and cash received from the Business Combination, exercise of certain warrants, the June 2020 and October 2020 follow-on equity offerings and the timing of expenditure assumptions, the Company currently expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months after November 13, 2020. The Company has experienced operating losses and negative operating cash flows for the year ended December 31, 2019 and for the three and nine-month periods ended September 30, 2020. While certain geographies may experience improved cash flow, the Company expects to continue to incur annual operating losses and annual negative operating cash flow for the foreseeable future.

Emerging Growth Company

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company expects to lose its emerging growth company status on December 31, 2020. As a result, the Company will adopt all accounting pronouncements currently deferred based on private company standards for purposes of the 2020 Form 10-K filing.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of operating cash and cash equivalents and cash reserved for users. The Company maintains separate accounts for cash and cash reserved for users primarily across four financial institutions. Some amounts exceed federally insured limits with the majority of cash held in one financial institution. Management believes all financial institutions holding its cash are of high credit quality and does not believe the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Acquisitions

The Company accounts for business combinations under the acquisition method of accounting, in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which requires assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date. Any fair value of purchase consideration in excess of the fair value of the assets acquired less liabilities assumed is recorded as goodwill. The fair values of the assets acquired, and liabilities assumed are determined based upon the valuation of the acquired business and involve management making significant estimates and assumptions.

Cash and cash equivalents

Cash and cash equivalents consist of highly liquid, unrestricted savings, checking and other bank accounts. The Company also utilizes short-term certificates of deposit, each with a duration of three months or less.

Cash Reserved for Users

The Company maintains separate bank accounts to segregate users’ funds from operational funds. In certain regulated jurisdictions, user funds are held by DK Player Reserve, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company, which was organized for the purpose of protecting users’ funds in the event of creditor claims.

Receivables Reserved for Users

Receivables for user deposits not yet received are stated at the amount the Company expects to collect from a payment processor, which includes an allowance for doubtful accounts if appropriate. These receivables arise, primarily, due to process timing between when a user deposits and when the Company receives that deposit from the payment processor. Receivables also arise due to the securitization policies of certain payment processors. The allowance for doubtful accounts is determined based on the Company’s assessment of the probability of the non-payment of the receivable. This provision is netted against the receivable balance with the loss being recognized within general and administrative expenses in the unaudited condensed consolidated statements of operations. On assessment that the receivable will not be collected, the associated amount is written off with no impact to the unaudited condensed consolidated statements of operations. The provision at September 30, 2020 and December 31, 2019 was $110 and $0, respectively.

Accounts Receivables

Accounts receivables are recorded at amortized cost, less any allowance for doubtful accounts. The allowance for doubtful accounts is determined based on probability of the Company's assessment of the probability of non-payment of the receivable. This provision is netted against the receivable balance with the loss being recognized within general and administrative expenses in the unaudited condensed consolidated statements of operations. On assessment that the receivable will not be collected, the associated amount is written off with no impact to the unaudited condensed consolidated statements of operations. The provision at September 30, 2020 and December 31, 2019 was $233 and $0, respectively.

Property and Equipment, Net

Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed utilizing the straight-line method over the estimated useful life of the asset. Leasehold improvements depreciation is computed over the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows:


Computer equipment and software		3 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years

Intangible Assets, Net

The Company’s intangible assets consist of Developed Technology, Customer Relationships, Internally-Developed Software, Gaming Licenses and Trademarks and Tradenames. The related amortization expense is classified as cost of revenue in the unaudited condensed consolidated statements of operations.

Developed Technology

Developed technology relates to the design and development of sports betting and casino gaming software for online and retail sportsbook and casino gaming products acquired from SBTech and recorded at fair value. Capitalized development costs are amortized on a straight-line basis over their estimated useful life of eight years once the development is completed and the assets are in use. All other expenditures, including those incurred in order to maintain an intangible asset’s current level of performance, are expensed as incurred.

Customer Relationships

Customer (or “user”) relationships are finite-lived intangible assets which are amortized over their estimated useful lives of five years. Customer relationships are generally recognized as the result of business combinations.

Internally Developed Software

Software that is developed for internal use is accounted for pursuant to ASC Topic 350-40, Intangibles, Goodwill and Other — Internal-Use Software. Qualifying costs incurred to develop internal-use software are capitalized when (i) the preliminary project stage is completed, (ii) management has authorized further funding for the completion of the project and (iii) it is probable that the project will be completed and perform as intended. These capitalized costs include compensation for employees who develop internal-use software and external costs related to development of internal use software. Capitalization of these costs ceases once the project is substantially complete and the software is ready for its intended purpose. Internally developed software is amortized using the straight-line method over an estimated useful life of three to four years. All other expenditures, including those incurred in order to maintain an intangible asset's current level of performance, are expensed as incurred.

Gaming Licenses

The Company incurs fees in connection with applying for and maintaining good standing in jurisdictions via business licenses. Fees incurred in connection with the application and subsequent renewals are capitalized and amortized using the straight-line method over an estimated useful life. In certain arrangements, the Company enters into agreements to operate on a business partner’s license in exchange for upfront fees. These fees are capitalized and amortized over the shorter of their expected benefit under the partnership agreement or estimated useful life. Refer to footnote 5 for detail on amortization period.

Trademarks and Tradenames

The Company incurs fees in connection with applying for and maintaining trademarks and tradenames. Fees incurred in connection with the application and subsequent renewals are capitalized and amortized using the straight-line method over an estimated useful life of three years.

Goodwill

The Company performs its annual impairment testing on October 1 of each year and when circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. The Company’s business is classified into three reporting units: B2C, Media and B2B. In testing goodwill for impairment, the Company has the option to begin with a qualitative assessment, commonly referred to as “Step 0,” to determine whether it is more likely than not that the fair value of a reporting unit containing goodwill is less than its carrying value. This qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, entity-specific financial performance and other events, such as changes in the Company’s management, strategy and primary user base. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative goodwill impairment analysis by comparing the carrying amount to the fair value of the reporting unit. If the carrying amount exceeds the fair value, goodwill will be written down to the fair value and recorded as impairment expense in the unaudited condensed consolidated statements of operations. The Company performed its annual impairment assessment of goodwill as of December 31, 2019 and concluded that goodwill was not impaired. The Company identified a triggering event during the quarter ended March 31, 2020 and as a result performed a quantitative assessment that concluded that goodwill was not impaired. As of September 30, 2020, the Company did not identify any indicators of impairment.

Impairment of Long-Lived Assets

Long-lived assets, except for goodwill, consist of property and equipment and finite-lived acquired intangible assets, such as internal-use software, developed software, gaming licenses, trademarks, tradenames and customer relationships. Long-lived assets, except for goodwill, are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable. Impairment expense is recognized to the extent an asset’s expected undiscounted future cash flows are less than the asset’s carrying amount. There was immaterial impairment related to internally developed software on abandoned projects during the year ended December 31, 2019. As of March 31, 2020, June 30, 2020 and September 30, 2020, the Company determined that long-lived assets were not impaired.

Equity Method Investment

The Company has a 46% membership interest in DKFS, LLC, also known as DRIVE by DraftKings. The Company uses the equity method to account for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not exercise control. The Company’s carrying value in the equity method investee is reflected in the caption “Equity method investment” on the consolidated balance sheets. Changes in value of DKFS, LLC are recorded in “Loss from equity method investment” on the consolidated statements of operations. The Company’s judgment regarding its level of influence over the equity method investee includes considering key factors, such as ownership interest, representation on the board of directors, and participation in policy-making decisions.

Under the equity method, the Company’s investment is initially measured at cost and subsequently increased or decreased to recognize the Company’s share of income and losses of the investee, capital contributions and distributions and impairment losses. The Company performs a qualitative assessment annually and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value.

Leases

The Company accounts for leases under the provisions of ASC Topic 840, Leases, which requires that leases be evaluated and classified as operating or capital leases for financial reporting purposes. The terms used for the evaluation include renewal option periods in instances in which the exercise of the renewal option can be reasonably assured and failure to exercise such option would result in an economic penalty. Leases are classified as capital leases whenever the terms of the lease substantially transfer all of the risks and rewards of ownership to the lessee. All other leases are recorded as operating leases. As of September 30, 2020 and December 31, 2019, all of the Company’s leases were operating leases.

The Company recognizes rent expense on operating leases on a straight-line basis over the non-cancellable lease term. Operating leases with landlord-funded leasehold improvements are considered tenant allowances and are amortized as a reduction of rent expense over the non-cancellable lease term. Deferred rent liability, which is calculated as the difference between contractual lease payments and the rent expense, is recorded in accounts payable and accrued expenses and other long-term liabilities in the unaudited condensed consolidated balance sheets.

Liabilities to Users

The Company records liabilities for user account balances. User account balances consist of user deposits, most promotional awards and user winnings less user withdrawals, tax withholdings and user losses. Cash reserved for users and receivables reserved for users equal or exceed the Company’s liabilities to users at all times.

Loss Contingencies

Our loss contingencies, which are included within other long-term liabilities in the unaudited condensed consolidated balance sheets, are uncertain by nature and their estimation requires significant management judgment as to the probability of loss and estimation of the amount of such loss. These contingencies include, but may not be limited to, litigation, indirect taxes, regulatory investigations and proceedings and management’s evaluation of complex laws and regulations, including those relating to indirect taxes, and the extent to which they may apply to our business and industry.

We regularly review our contingencies to determine whether the likelihood of loss is probable and to assess whether a reasonable estimate of the loss can be made. Determination of whether a loss estimate can be made is a complex undertaking that considers the judgement of management, third-party research, the prospect of negotiation and interpretations by regulators and courts, among other information. When a loss is determined to be probable, and the amount of the loss can be reasonably estimated, an estimated contingent liability is recorded.

Revenue Recognition

Effective January 1, 2019, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method for all contracts not completed as of the date of adoption. ASC 606 requires companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The cumulative effect of the adoption was immaterial to the unaudited condensed consolidated financial statements. See Note 9 – Revenue Recognition for further details.

The Company determines revenue recognition through the following steps:

· Identify the contract, or contracts, with the customer;

· Identify the performance obligations in the contract;

· Determine the transaction price;

· Allocate the transaction price to performance obligations in the contract; and

· Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services.

The Company is currently engaged in the business of digital sports entertainment and gaming and provides its users with online gaming opportunities. The Company also provides online sportsbook and casino operators with technical infrastructure and with respect to its direct customers related services. The following is a description of the Company’s revenue streams:

Online Gaming

DFS is a peer-to-peer platform in which users compete against one another for prizes. Users pay an entry fee (ranging from $0 to $10,000 per user) to join a DFS contest and compete for prizes, which are distributed to the highest performing competitors in each contest as defined by each contest’s prize table. DFS revenue is generated from contest entry fees from users, net of prizes and customer incentives awarded to users.

Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users.

iGaming, or online casino, typically includes digital versions of wagering games available in land-based casinos, such as blackjack, roulette and slot machines. For these offerings, the Company functions similarly to land-based casinos, generating revenue through hold, as users play against the house. iGaming revenue is generated from user wagers net of payouts made on users’ winning wagers and incentives awarded to users. Online gaming is a platform and incentives can be used across products.

DFS, Sportsbook and iGaming, each as described above, create a single performance obligation for the Company to operate contests or games and award prizes or payouts to users based on results. Revenue is recognized at the conclusion of each contest, wager, or wagering game hand. Additionally, certain incentives given to customers create material rights and represent separate performance obligations. User incentives in certain cases create liabilities when awarded to players and in those cases are generally recognized as revenue upon redemption.

Gaming software

The Company contracts with business customers to provide sports and casino betting software solutions. Gaming software revenue is recognized when control of the solutions is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for providing control of the sports betting and casino software.

The Company’s direct customer contract revenue is generally calculated as a percentage of the wagering revenue generated by the business customer using our software and is recognized in the periods in which those wagering and related activities conclude. In contrast, the Company provides distributors with the right to resell the Company’s software-as-a-service offering to their clients, using their own infrastructure. In reseller arrangements, revenue is generally calculated via a fixed monthly fee and an additional monthly fee which varies based on the number of gaming operators to whom each reseller sub-licenses the Company’s software. Our direct customer arrangements do not provide the customers with the right to take possession of our software, but only the right to purchase access to the Company’s sports and casino wagering software for a defined contractual period. In reseller arrangements, as opposed to direct customer arrangements, the resellers purchase a software license which enables them to install, host, and serve their operators’ base using the Company’s software.

Transaction Price Considerations

Variable Consideration

Variability in the transaction price arises primarily due to market-based pricing, cash discounts, revenue sharing and usage-based fees. DraftKings offers loyalty programs, free plays, deposit bonuses, discounts, rebates and other rewards and incentives to its customers. Revenue for DFS, Sportsbook and iGaming is collected prior to the contest or event and is fixed once the outcome is known. Prizes paid and payouts made to users are recognized when awarded to the player.

Allocation of transaction price to performance obligations

Contracts with customers may include multiple performance obligations. For such arrangements, the transaction price is allocated to performance obligations on a relative standalone selling price basis. Standalone selling prices are estimated based on observable data of the Company’s sales of such products and services to similar customers and in similar circumstances on a standalone basis. For Online Gaming (DFS, Sportsbook and iGaming), the Company allocates a portion of the transaction price to certain customer incentives that create material future customer rights. In addition, in the event of a multi-stage contest, the Company will allocate transaction price ratably from contest start to the contest’s final stage.

Certain costs to obtain or fulfill contracts

Under ASC 606, certain costs to obtain or fulfill a contract with a customer must be capitalized, to the extent recoverable from the associated contract margin, and subsequently amortized as the products or services are delivered to the customer. These costs are capitalized as contract acquisition costs and are amortized over the period of benefit to the customer. For the Company, the period of benefit is typically less than or equal to 1 year. As such, the Company applied the practical expedient and contract acquisition costs are expensed immediately. Customer contract costs which do not qualify for capitalization as contract fulfillment costs are expensed as incurred.

Contract balances

Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings to those customers. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing.

Deferred revenue relates to payments received in advance of the satisfaction of performance under the contract. The Company maintains various programs to incentivize user behaviors, which allows users to earn awards. Incentive awards generally represent a material right to the user, and awards may be redeemed for future services. Incentive awards earned by users, but not yet redeemed, are generally recognized as a reduction to revenue and included within liabilities to users on the consolidated balance sheets. When a user redeems most types of awards, the Company recognizes revenue on the condensed consolidated statements of operations.

Certain player awards are not subject to expiration or have not been expired historically, on such awards the Company recognizes breakage (for amounts not expected to be redeemed) to the extent there is no requirement for remitting such balances to regulatory agencies.

Cost of Revenue

Cost of revenue consists primarily of variable costs. These include mainly (i) payment processing fees and chargebacks, (ii) product taxes, (iii) platform costs, (iv) revenue share / market access arrangements, and (v) feed / provider services. The Company incurs payment processing fees on user deposits, withdrawals and deposit reversals from payment processors (“chargebacks”). Chargebacks have not been material to date. Cost of revenue also includes expenses related to the distribution of our services, amortization of intangible assets and compensation of revenue associated personnel.

Sales and Marketing

Sales and marketing expenses consist primarily of expenses associated with advertising and related software, conferences, strategic league and team partnerships and costs related to free to play contests, rent and facilities maintenance and the compensation of sales and marketing personnel, including stock-based compensation expenses.

Product and Technology

Product and technology expenses consist primarily of expenses which are not subject to capitalization or otherwise classified within Cost of Revenue. Product and Technology expenses include software licenses, rent and facilities maintenance and depreciation of hardware and software and costs related to the compensation of product and technology personnel, including stock-based compensation.

General and Administrative

General and administrative expenses consist of costs not related to Sales and Marketing, Product and Technology or Revenue. General and administrative costs include professional services (including legal, regulatory, audit, accounting, lobbying and services related to the Business Combination), rent and facilities maintenance, contingencies, insurance, allowance for doubtful accounts receivable and depreciation of leasehold improvements and furniture and fixtures and costs related to the compensation of executive and non-executive personnel, including stock-based compensation.

Stock-based Compensation

The Company measures compensation expense for stock options and other stock awards in accordance with ASC Topic 718, Compensation — Stock Compensation. Stock-based compensation is measured at fair value on grant date and recognized as compensation expense over the requisite service period. Generally, the Company issues stock options and other stock awards to employees with service-based and/or performance-based vesting conditions. For awards with only service-based vesting conditions, the Company records compensation cost for these awards using the straight-line method less an assumed forfeiture rate. For awards with performance-based vesting conditions, the Company recognizes compensation cost on a tranche-by- tranche basis (the accelerated attribution method) less an assumed forfeiture rate.

Under the provisions of ASC Topic 505-50, Equity-Based Payments to Non-Employees, the Company measures stock-based awards granted to non-employees based on the fair value of the award on the date on which the related service is completed. Compensation expense is recognized over the period during which services are rendered by non-employees until service is completed. At the end of each financial reporting period, for share based payments issued in lieu of cash prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company’s common stock.

Income Taxes

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the unaudited condensed consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between U.S. GAAP treatment and tax treatment of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by considering taxable income in carryback years, existing taxable temporary differences, prudent and feasible tax planning strategies and estimated future taxable profits.

The Company accounts for uncertainty in income taxes recognized in the unaudited condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the unaudited condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Earnings (loss) per share

Basic earnings (loss) per share is calculated using the two-class method. Under the two-class method, basic earnings (loss) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period excluding the effects of any potentially dilutive securities. The weighted-average number of common shares outstanding during the period includes Class A common stock but is exclusive of Class B common stock as these shares have no economic or participating rights. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if potential common shares had been issued if such additional common shares were dilutive. Since the Company had net losses for all the periods presented, basic and diluted earnings (loss) per share are the same, and additional potential common shares have been excluded, as their effect would be anti-dilutive.

Recently Adopted Accounting Pronouncements

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) No. 2018-07, Compensation — Stock Compensation (Topic 718), to simplify the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. Under the new standard, equity-classified non-employee awards are initially measured on the grant date and re-measured only upon modification, rather than at each reporting period. Measurement is based on an estimate of the fair value of the equity instruments to be issued. The Company adopted this pronouncement as of January 1, 2020. The adoption of this standard did not have a material impact on the Company.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2021, and interim periods beginning after December 15, 2022. Early adoption is still permitted. The Company expects to adopt this standard as of January 1, 2020 at December 31, 2020. The Company continues to assess all of the effects of the adoption and believes the most significant impact relates to the recognition of new right-of-use assets and lease liabilities on the consolidated balance sheets for operating leases. The Company does not expect a material impact to the consolidated statements of operations.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326). The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, the Company will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. The Company expects to adopt this standard as of January 1, 2020 at December 31, 2020 and is currently in the process of evaluating the impact of this new standard.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. Early adoption is still permitted. The Company expects to adopt this standard as of January 1, 2020 at December 31, 2020 and is currently in the process of evaluating the impact of this standard.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the timing of adopting this guidance and the impact of adoption on its financial position, results of operations and cash flows.

Business Combination

9 Months Ended

Sep. 30, 2020

Business Combination

Business Combination

3. Business Combination

As discussed in Note 1, on April 23, 2020 DEAC consummated the Business Combination dated December 22, 2019 as amended on April 7, 2020 and, in connection therewith, (i) DEAC merged with and into the Company, whereby we survived the merger (the “DK Merger”) and became the successor issuer to DEAC by operation of Rule 12g-3(a) promulgated under the Exchange Act, (ii) we changed our name to “DraftKings Inc.,” (iii) we acquired Old DK by way of a merger and (iv) we acquired all of the issued and outstanding share capital of SBTech (the “SBTech Acquisition”). Upon consummation of the foregoing transactions, Old DK and SBTech became wholly owned subsidiaries of the Company. Under ASC 805, Business Combinations, Old DK was deemed the accounting acquirer based on the following predominant factors: its former owners have the largest portion of voting rights in the Company, the Board and Management have more individuals coming from Old DK than either DEAC or SBTech, Old DK was the largest entity by revenue and by assets at the time of the Business Combination, and the headquarters of the Company is Old DK’s headquarters which is located in Boston, Massachusetts.

The DK Merger was accounted for as a reverse recapitalization, in accordance with U.S. GAAP. Under this method of accounting, DEAC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old DK issuing stock for the net assets of DEAC, accompanied by a recapitalization. The net assets of DEAC are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Old DK. Reported shares and earnings per share available to holders of the Company’s common stock, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination. Further, Old DK was determined to be the accounting acquirer in the SBTech Acquisition, as such, the SBTech Acquisition was treated as a business combination under ASC 805, and was accounted for using the acquisition method of accounting. DraftKings recorded the fair value of assets acquired and liabilities assumed from SBTech.

Operating results for SBTech are included in the unaudited condensed consolidated statements of operations as of September 30, 2020 from the day of the acquisition. The unaudited condensed consolidated statements of operations include $29,185 of revenue and $3,731 of net loss for the three months ended September 30, 2020 related to SBTech. The unaudited condensed consolidated statements of operations include $44,139 of revenue and $10,669 of net loss for the nine months ended September 30, 2020 related to SBTech prior to purchase price accounting.

Preliminary Purchase Price Accounting for the SBTech Acquisition

The Company acquired 100% of the equity of SBTech pursuant to the Business Combination Agreement by issuing 45,017 shares, options, and earnout shares of Class A common stock of the Company at a weighted average fair value of $17.53 to the former stockholders and option holders of SBTech. This represents an increase from the share consideration valued at $10.17 as of the date of the Business Combination Agreement. The following summarizes the consideration transferred at Closing for the SBTech Acquisition (in thousands):


Purchase consideration

Cash consideration(1)	$	182,862
Share consideration(2)		789,065
Other cash consideration(3)		3,614
Total SBTech consideration	$	975,541

⁽¹⁾

Includes the cash consideration, adjusted for the Net Debt Amount, the Working Capital Adjustment, and the Aggregate Strike Price Amount, as stipulated by the Business Combination Agreement, resulting in cash consideration of $182,862.

⁽²⁾

Includes $776,524 for the share consideration for SBTech equity of 40,739 shares and SBTech employees’ vested options of 3,558 options, and $12,541 of contingent consideration for the 720 earnout shares issued to former stockholders of SBTech as part of the Business Combination, recognized at their Acquisition Date fair value.

⁽³⁾

Includes transaction costs incurred by SBTech shareholders to be borne by DraftKings, costs related to the SBTech restructuring transaction that were paid by DraftKings, and the tail liability insurance for SBTech’s directors and officers, as specified in the Business Combination Agreement.

The acquired assets and assumed liabilities of SBTech were recorded at their estimated fair values. The purchase price allocation for the Business Combination is preliminary and subject to change within the respective measurement period which will not extend beyond one year from the acquisition date. Measurement period adjustments will be recognized in the reporting period in which the adjustment amounts are determined. Any such adjustments may be material.

The following table summarizes the consideration paid for SBTech and the preliminary fair value of the assets acquired and liabilities assumed at the acquisition date on April 23, 2020. These values are considered preliminary pending finalization of valuation analyses pertaining to intangible assets acquired and tax liabilities assumed including the calculation of deferred tax assets and liabilities:


Cash and cash equivalents	$	9,639
Trade receivables		18,741
Other current assets		1,848
Property and equipment		10,677
Intangible assets		490,513
Other non-current assets		1,017
Total identifiable assets acquired		532,435
Liabilities assumed:
Accounts payable and accrued expenses		23,613
Other long-term liabilities		4,226
Total liabilities assumed		27,839
Net assets acquired (a)		504,596
Estimated purchase consideration (b)		975,541
Estimated goodwill (b) – (a)	$	470,945

Goodwill represents the excess of the gross considerations transferred over the fair value of the underlying net assets acquired and liabilities assumed. Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of benefits from securing buyer-specific synergies that increase revenue and profits and are not otherwise available to a marketplace participant, as well as acquiring a talented workforce and cost savings opportunities. The amount allocated to goodwill and intangible assets is subject to final adjustment to reflect the final valuations. Goodwill associated with the SBTech Acquisition is preliminarily assigned as of the acquisition date to the Company’s B2C and B2B segments in the amounts of $348,345 and $122,600 respectively, which include the Company’s reporting units that are expected to benefit from the synergies of the combination. Goodwill recognized is not expected to be deductible for local tax purposes.

Intangible Assets


			Weighted-Average
	Fair Value		Useful Life (in years)

Developed Technology	$	392,028	8
Customer relationships		93,699	5
Trademarks and trade names		4,308	3
Gaming License		478	2-3
Total	$	490,513

The fair value of the developed technology was determined using the Multi-Period Excess Earnings Method (“MPEEM”), a form of the Income Approach. The MPEEM is a specific application of the Discounted Cash Flow Method. The principle behind the MPEEM is that the value of an intangible asset is equal to the present value of the incremental after-tax cash flows attributable only to the subject intangible asset after deducting contributory asset charges (“CAC”). The principle behind a CAC is that an intangible asset ‘rents’ or ‘leases’ from a hypothetical third party all the assets it requires to produce the cash flows resulting from its development, that each project rents only those assets it needs (including elements of goodwill) and not the ones that it does not need, and that each project pays the owner of the assets a fair return on (and of, when appropriate) the value of the rented assets. The fair value of the customer relationships was determined by using the With and Without Method, a form of the Income Approach. In this method, the present value of the after-tax cash flows of the business assuming that the intangible asset is in place is compared to the present value of the after-tax cash flows of the business assuming the absence of the intangible asset. This method isolates the impact of the intangible asset and provides the basis for an estimation of value. The fair value of the trademark and tradename was determined by using the Relief-from-Royalty Method, a form of the Income Approach. The basic tenet of the Relief-from-Royalty Method is that without ownership of the subject intangible asset, the user of that intangible asset would have to make a stream of payments to the owner of the asset in return for the rights to use that asset. By acquiring the intangible asset, the user avoids these payments.

Transaction Costs

The Company incurred $0 and $30,906, respectively, for the three and nine months ended September 30, 2020, in advisory, legal, accounting and management fees in conjunction with the Business Combination, which are included in general and administrative expenses on the consolidated statement of comprehensive loss.

Direct and incremental transaction costs related to the Business Combination and additional equity offerings that would not otherwise have been incurred are treated as a reduction of the cash proceeds and are deducted from the Company’s additional paid-in capital. Accordingly, $41,378 was incurred related to equity issuance costs for the nine months ended as of September 30, 2020.

Unaudited Pro-Forma Information

The financial information in the table below summarizes the combined results of operations of Old DK and SBTech, on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place on January 1, 2019 or of results that may occur in the future.

The following unaudited pro forma financial information for the three and nine month periods ended September 30, 2020 and September 30, 2019, combines the historical results for Old DK for the periods ended September 30, 2020 and September 30, 2019 and the historical results of SBTech, as converted to U.S. GAAP, for the respective periods:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	Actual		Pro Forma		Pro Forma		Pro Forma
Revenue	$	132,836	$	93,318	$	321,279	$	269,259
Net loss	$	(347,753)	$	(62,574)	$	(578,979)	$	(187,710)

These pro forma results were based on estimates and assumptions, which the Company believes are reasonable. The pro forma results include adjustments primarily related to purchase accounting adjustments. Acquisition costs and other non-recurring charges incurred are included in the earliest period presented.

Property and Equipment

9 Months Ended

Sep. 30, 2020

Property and Equipment

Property and Equipment

4. Property and Equipment

Property and equipment, net consists of the following:


	September 30, 2020		December 31, 2019
Computer equipment and software	$	23,661	$	9,685
Furniture and fixtures		7,664		5,891
Leasehold improvements		22,267		17,373
Property and Equipment		53,592		32,949
Accumulated depreciation		(14,110)		(7,004)
Property and Equipment, net	$	39,482	$	25,945

During the three and nine months ended September 30, 2020, the Company recorded depreciation expense on property and equipment of $2,749 and $6,489, respectively. Depreciation expense on property and equipment was $1,249 and $3,225 for the three and nine months ended September 30, 2019, respectively.

Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2020

Intangible Assets and Goodwill

Intangible Assets and Goodwill

5. Intangible Assets and Goodwill

Intangible Assets

The Company has the following intangible assets, net at September 30, 2020:


	Weighted-
	Average
	Remaining	Gross
	Amortization	Carrying		Accumulated
	Period	Amount		Amortization		Net
Developed Technology	7.57 years	$	426,062	$	(23,226)	$	402,836
Internally developed software	2.33 years		63,464		(29,652)		33,812
Gaming Licenses	4.31 years		19,450		(3,798)		15,652
Trademarks and tradenames	2.57 years		4,682		(681)		4,001
Customer relationships	4.57 years		101,833		(8,882)		92,951
Intangible Assets, net		$	615,491	$	(66,239)	$	549,252

The Company has the following intangible assets, net at December 31, 2019:


	Weighted-
	Average
	Remaining	Gross
	Amortization	Carrying		Accumulated
	Period	Amount		Amortization		Net
Internally developed software	2.35 years	$	43,753	$	(21,188)	$	22,565
Gaming Licenses	4.86 years		12,003		(629)		11,374
Intangible Assets, net		$	55,756	$	(21,817)	$	33,939

Amortization expense was $23,846 and $43,478 for the three and nine months ended September 30, 2020 and $2,181 and $6,404 for the three and nine months ended September 30, 2019, respectively.

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2020 by segment (refer to Note 12 for segment definitions) are:


	B2C		B2B		Total
Balance as of December 31, 2019	$	4,738	$	—	$	4,738
Goodwill acquired in SBTech Acquisition*		348,345		122,600		470,945
Cumulative Translation Adjustment		—		10,644		10,644
Balance as of September 30, 2020	$	353,083	$	133,244	$	486,327

* = Preliminary allocation.

Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2020

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

6.Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:


	September 30, 2020		December 31, 2019
Accounts payable	$	24,401	$	16,618
Accrued compensation and related expenses		27,843		17,770
Accrued marketing		97,788		11,855
Accrued professional fees		13,299		10,344
Accrued operating taxes		14,050		5,745
Accrued partnership fees		12,000		7,868
Accrued other expenses		36,941		15,095
Total	$	226,322	$	85,295

Current and Long-term Liabilities	9 Months Ended
Current and Long-term Liabilities	Sep. 30, 2020
Current and Long-term Liabilities
Current and Long-term Liabilities	7.Current and Long-term Liabilities Term Note In October 2016, the Company entered into an amended and restated loan and security agreement with Pacific Western Bank, which was most recently amended in September 2020 (as amended, the "Credit Agreement"). The Credit Agreement provides a revolving line of credit of up to $60,000. The Credit Agreement has a maturity date of March 1, 2022. As of September 30, 2020 and December 31, 2019, the Credit Agreement provided a revolving line of credit of up to $60,000 and $50,000, respectively. There was no principal outstanding as of September 30, 2020. The principal amount outstanding under the Credit Agreement totaled $6,750 as of December 31, 2019. Net facility available from the Credit Agreement as of September 30, 2020 and December 31, 2019 totaled $54,947 and $38,769, respectively, which exclude the letters of credit outlined in Note 15. Indirect Taxes Taxation of e-commerce is becoming more prevalent and could negatively affect the Company’s business as it pertains to DFS and its users. The ultimate impact of indirect taxes on the Company’s business is uncertain, as is the period required to resolve this uncertainty. The Company’s estimated contingent liability for indirect taxes represents the Company’s best estimate of tax liability in jurisdictions in which the Company believes taxation is probable. The Company frequently reevaluates its tax positions for appropriateness. Indirect tax statutes and regulations are complex and subject to differences in application and interpretation. Tax authorities may impose indirect taxes on Internet-delivered activities based on statutes and regulations which, in some cases, were established prior to the advent of the Internet and do not apply with certainty to the Company’s business. The Company’s estimated contingent liability for indirect taxes may be materially impacted by future audit results, litigation and settlements, should they occur. The Company’s activities by jurisdiction may vary from period to period, which could result in differences in the applicability of indirect taxes from period to period. As of September 30, 2020, and December 31, 2019, the Company’s estimated contingent liability for indirect taxes was $43,771 and $35,899, respectively. The estimated contingent liability for indirect taxes is recorded within other long-term liabilities on the unaudited condensed consolidated balance sheets and general and administrative expenses on the unaudited condensed consolidated statements of operations. Deferred Rent In conjunction with certain leased office facilities, the Company has received cash payments from landlords to fund tenant directed leasehold improvements. These payments are recorded as deferred rent and reported in accounts payable and accrued expenses and other long-term liabilities within the unaudited condensed consolidated balance sheets. These amounts are released ratably over the lease term, with an offset to rent expense. At September 30, 2020, the short-term and long-term deferred rent liabilities were $1,328 and $11,025, respectively. At December 31, 2019, the short-term and long-term deferred rent liabilities were $1,125 and $9,747, respectively.

Stockholder's Equity	9 Months Ended
Stockholder's Equity	Sep. 30, 2020
Stockholder's Equity
Stockholder's Equity	8.Stockholder’s Equity The unaudited condensed consolidated statements of change in equity reflect the Reverse Recapitalization and SBTech Acquisition as defined in Note 1 as of April 23, 2020. As Old DK was deemed the accounting acquirer in the Reverse Recapitalization with DEAC, all periods prior to the consummation date reflect the balances and activity of Old DK. The consolidated balances as of December 31, 2019 and 2018 from the audited consolidated financial statements of Old DK as of that date, share activity (convertible redeemable preferred stock and common stock) and per share amounts in these unaudited condensed consolidated statements of equity were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 0.353628. All convertible redeemable preferred stock classified as mezzanine was retroactively adjusted, converted into Class A common stock, and reclassified to permanent as a result of the Reverse Recapitalization. Redeemable convertible preferred Series E-1 stock converted into shares of Old DK common stock at a share conversion factor of 1.40 whereas Series F converted into shares of Old DK common stock at a share conversion factor of 1 and both were immediately exchanged for Class A common stock of the Company using the recapitalization exchange ratio of 0.353628 as a result of the Reverse Recapitalization. Immediately prior to the Business Combination, Old DK issued 393,014 shares of Class B common stock to Jason Robins (the Chief Executive Officer of Old DK and of the Company) which converted into 393,014 shares of Class B common stock of the Company as a result of the Business Combination and is recorded as stock-based compensation for the three and nine months ended September 30, 2020. Such shares carry 10 votes per share and allow Jason Robins to have as of the closing of the Business Combination, approximately 90% of the voting power of the capital stock of DraftKings on a fully-diluted basis. As these shares have no economic rights and are non-participating , they are allocated no earnings or losses when calculating earnings per share pursuant to the two-class method. Upon the consummation of the Business Combination, the mandatory conversion feature was triggered for the Company’s convertible notes. All outstanding principal of $109,165 and unpaid accrued interest of $3,380 was collectively converted to equity securities at $10 per share. The noteholders received 11,254 shares of Class A common stock in New DraftKings as result of the conversion. As part of the Business Combination $665,485 of Class A common stock and Additional Paid in Capital was recorded, net of transaction costs of $10,631, in relation to DEAC shares being recapitalized. The Company then used $186,477 as cash consideration in its acquisition of SBTech and $7,192 for the buyout of unaccredited investors. Net cash proceeds to the Company were $484,962. In June 2020, we issued 16,000 new shares of our Class A common stock in a public offering for net proceeds (net of underwriting fees) of $620,800. As of September 30, 2020, the Company had 300,000 shares authorized of preferred stock, $0.0001 par value, of which none were issued and outstanding as of September 30, 2020 or December 31, 2019.

Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue Recognition

Revenue Recognition

9.Revenue Recognition

Deferred Revenue

The Company included deferred revenue within accounts payable and accrued expenses and liabilities to users in the unaudited condensed consolidated balance sheets. The deferred revenue balances were as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Deferred revenue, beginning of the period	$	24,759	$	13,280	$	20,760	$	13,581
Deferred revenue, end of the period		33,464		15,986		33,464		15,986
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period		6,632		5,966		10,505		9,819

Deferred revenue primarily represents contract liabilities related to the Company’s obligation to transfer future value in relation to in period transactions in which the Company has received consideration. Such obligations are recognized as liabilities when awarded to users and are recognized as revenue when those liabilities are later resolved. The Company included deferred revenue within accounts payable and accrued expenses and liabilities to users on the unaudited condensed consolidated balance sheets.

Revenue Disaggregation

Disaggregation of revenue for the three and nine months ended September 30, 2020 and 2019 is as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Online gaming	$	99,477	$	62,475	$	238,591	$	183,877
Gaming software		29,185		—		44,139		—
Other		4,174		4,539		9,579		8,619
Total Revenue	$	132,836	$	67,014	$	292,309	$	192,496

Online gaming includes DFS, iGaming and Sportsbook which have certain similar attributes and pattern of recognition. Gaming software and Other also have similar attributes and pattern of recognition.

The following table presents the Company’s revenue by geographic region for the periods indicated:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
United States	$	106,938	$	67,249	$	254,325	$	189,539
International		25,898		(235)		37,984		2,957
Total Revenue	$	132,836	$	67,014	$	292,309	$	192,496

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Stock-Based Compensation

Stock-Based Compensation

10.Stock-Based Compensation

The Company, historically, has issued three types of stock-based compensation: Time-Based awards, Long Term Incentive Plan (“LTIP”) awards and Performance-Based Stock Compensation Plan (“PSP”) awards. Time-Based awards are options which generally vest over a 4-year period. LTIP awards are performance-based equity awards that are used to establish longer-term performance objectives and incentivize management to meet those objectives. PSP awards are short-term performance-based equity awards which establish performance objectives related to one or two particular fiscal years. LTIP awards generally vest when longer-term revenue, adjusted EBITDA or share price targets are achieved amongst other conditions, while PSP awards generally vest upon achievement of revenue or adjusted EBITDA targets amongst other conditions. All stock-based compensation grants expire ten years after the grant date.

The following table shows stock option activity for the nine months ended September 30, 2020 and 2019:


										Weighted-
								Weighted-		Average
								Average		Remaining	Aggregate
								Exercise		Term	Intrinsic
	Time Based		PSP (3)		LTIP (3)			Price		(in Years)	Value
	Options	RSUs	Options	RSUs	Options	RSUs	Total
Outstanding at December 31, 2018	66,527	—	5,161	—	40,189	—	111,877	$	0.84	8.15	$	69,765
Recapitalization Impact	(43,003)	—	(3,336)	—	(25,978)	—	(72,317)		1.54	—		—
Outstanding at December 31, 2018	23,524	—	1,825	—	14,211	—	39,560		2.38	8.15	$	69,765
Granted	5,479	—	2,214	—	1,990	—	9,683		4.70	—		—
Exercised options / vested RSUs	(754)	—	(16)	—	—	—	(770)		1.14	—		—
Forfeited	(355)	—	(19)	—	—	—	(374)		3.39	—		—
Outstanding at September 30, 2019	27,894	—	4,004	—	16,201	—	48,099	$	2.85	7.88	$	90,282

Outstanding at December 31, 2019	78,772	—	11,233	—	45,817	—	135,822	$	1.01	7.64	$	203,431
Recapitalization Impact	(50,919)	—	(7,261)	—	(29,616)	—	(87,796)		1.85	—		—
Outstanding at December 31, 2019	27,853	—	3,972	—	16,201	—	48,026		2.86	7.64	$	203,431
Granted	4,781	3,696	—	907	—	15,554	24,938		0.97	—		—
Exercised options / vested RSUs	(4,695)	(73)	(618)	—	(638)	—	(6,024)		1.69	—		—
Forfeited	(684)	(8)	—	—	—	—	(692)		4.13	—		—
Outstanding at September 30, 2020	27,255	3,615	3,354	907	15,563	15,554	66,248	$	2.16	7.34	$	3,754,747

Vested as of September 30, 2020
Time Based	20,387	14	—	—	—	—	20,401	$	2.10	—		—
PSP	—	—	3,354	—	—	—	3,354		4.18	—		—
LTIP	—	—	—	—	15,563	—	15,563		3.43	—		—
	20,387	14	3,354	—	15,563	—	39,318	$	2.80	7.18	$	2,191,530

Estimate of Expected to Vest(1)
2020(2)	947	122	—	—	—	15,554	16,623	$	0.27	—		—
2021	3,401	1,240	—	865	—	—	5,506		2.97	—		—
2022+	2,205	2,074	—	—	—	—	4,279		2.48	—		—
	6,553	3,436	—	865	—	15,554	26,408	$	1.19	7.56	$	1,533,542

Effect of estimated forfeitures	315	165	—	42	—	—	522	$	2.91	8.26	$	29,675

⁽¹⁾

Contemplates the impact of estimated forfeitures.

⁽²⁾

For remainder of 2020 period.

⁽³⁾

Performance based instruments.

As of September 30, 2020, total unrecognized stock-based compensation expense of $289,665 related to granted and unvested share-based compensation arrangements is expected to be recognized over a weighted-average period of 1.62 years. The following table shows stock compensation expense for the three and nine months ended September 30, 2020 and 2019:


	Three months ended September 30, 2020						Nine months ended September 30, 2020
	Options		RSUs		Total		Options		RSUs		Total
Time Based	$	2,054	$	8,867	$	10,921	$	5,223	$	9,047	$	14,270
PSP		—		3,479		3,479		1,633		3,479		5,112
LTIP (1)		—		102,634		102,634		9,552		139,428		148,980
B Shares (2)		—		—		—		8,000		—		8,000
Total	$	2,054	$	114,980	$	117,034	$	24,408	$	151,954	$	176,362


	Three months ended						Nine months ended
	September 30, 2019						September 30, 2019
	Options		RSUs		Total		Options		RSUs		Total
Time Based	$	1,844	$	—	$	1,844	$	5,455	$	—	$	5,455
PSP		—		—		—		3,064		—		3,064
LTIP (1)		—		—		—		—		—		—
B Shares (2)		—		—		—		—		—		—
Total	$	1,844	$	—	$	1,844	$	8,519	$	—	$	8,519

⁽¹⁾

Resulting from amortization of stock-based compensation expense and anticipated achievement of share price targets

⁽²⁾

Related to the Business Combination; Class B shares have no economic rights.

Income Taxes

9 Months Ended

Sep. 30, 2020

Income Taxes

Income Taxes

11.Income Taxes

Three and nine months ended September 30, 2020 and September 30, 2019 is as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Provision (benefit) for income taxes	$	(13)	$	19	$	319	$	35

The effective tax rates for the three and nine months ended September 30, 2020 were .00% and.(.06)%, respectively, and the effective tax rates for the three and nine months ended September 30, 2019 were.(.03)% and.(.03)%, respectively. The difference between the Company’s effective tax rates for the 2020 and 2019 periods and the U.S. statutory tax rate of 21% was primarily due to a full valuation allowance related to the Company’s net U.S. deferred tax assets, offset partially by current state tax and current foreign tax. The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. As of September 30, 2020, the Company has analyzed the provisions of the CARES Act and determined it did not have a significant impact to the Company.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Segment Information

9 Months Ended

Sep. 30, 2020

Segment Information

Segment Information

12.Segment Information

Prior to the second quarter of fiscal year 2020, the Company operated its business and reported its results through a single reportable segment. As a result of the acquisition of SBTech on April 23, 2020, the Company began to operate its business and report its results through two operating and reportable segments: B2C and B2B, in accordance with ASC Topic 280, Segment Reporting. The B2C segment is comprised of the Old DK business and the B2B segment is comprised of SBTech in its entirety. The B2C segment primarily provides users with DFS, Sportsbook and iGaming products while the B2B segment is involved in the design, development and licensing of sports betting and casino gaming software for its sportsbook and casino gaming products.

The reportable segments are segments of the Company for which separate discrete financial information is available to and evaluated regularly by the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The CODM assesses a combination of metrics such as revenue and Adjusted EBITDA to evaluate the performance of each reportable segment.

Any intercompany revenues or expenses are eliminated in consolidation. All of the Company’s operating revenues and expenses, other than those excluded from Adjusted EBITDA as detailed below, are allocated to the Company’s reportable segments. We define and calculate Adjusted EBITDA as net loss before the impact of interest income or expense, income tax expense and depreciation and amortization, and further adjusted for the following items: stock-based compensation, transaction-related costs, litigation, settlement and related costs and certain other non-recurring, non-cash and non-core items, as described in the reconciliation below.

A measure of segment assets and liabilities has not been currently provided to the Company’s CODM and therefore is not shown below.

Summarized financial information for the Company’s segments is shown in the following tables:


	Three months ended September 30,
	2020		2019
Revenue:
B2C	$	103,651	$	67,014
B2B		29,185		—
Total revenue		132,836		67,014

Adjusted EBITDA:
B2C		(201,455)		(48,421)
B2B		4,376		—
Total adjusted EBITDA		(197,079)		(48,421)
Adjusted for:
Depreciation and amortization		26,595		3,430
Interest (income) expense, net		(686)		(277)
Income tax expense		(13)		19
Stock-based compensation		117,034		1,844
Transaction-related costs		3,585		1,328
Litigation, settlement and related costs		2,419		710
Other non-recurring costs and special project costs		1,645		444
Non-operating costs		95		—
Net Loss attributable to common shareholders	$	(347,753)	$	(55,919)

Due to the timing of the Business Combination, the three-month period ended September 30, 2020 reflects B2B/SBTech activity beginning April 24, 2020 and the three-month period ended September 30, 2019 does not reflect B2B/SBTech activity.


	Nine months ended September 30,
	2020		2019
Revenue:
B2C	$	248,170	$	192,496
B2B		44,139		—
Total revenue		292,309		192,496

Adjusted EBITDA:
B2C		(304,889)		(89,937)
B2B		854		—
Total adjusted EBITDA		(304,035)		(89,937)
Adjusted for:
Depreciation and amortization		49,967		9,629
Interest (income) expense, net		2,253		(1,364)
Income tax expense		319		35
Stock-based compensation		176,362		8,519
Transaction-related costs		34,492		2,603
Litigation, settlement and related costs		5,771		2,411
Other non-recurring costs and special project costs		4,291		1,816
Non-operating costs		380		—
Net Loss attributable to common shareholders	$	(577,870)	$	(113,586)

Due to the timing of the Business Combination, the nine-month period ended September 30, 2020 reflects B2B/SBTech activity beginning April 24, 2020 and the nine-month period ended September 30, 2019 does not reflect B2B/SBTech activity.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Loss Per Share

9 Months Ended

Sep. 30, 2020

Loss Per Share

Loss Per Share

13.Loss Per Share

The computation of loss per share and weighted-average shares of the Company’s Class A common stock outstanding for the periods presented are as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net loss	$	(347,753)	$	(55,919)	$	(577,870)	$	(113,586)
Basic and diluted weighted-average common shares outstanding		355,900		185,686		277,932		184,787
Loss per share attributable to common stockholders:
Basic and diluted	$	(0.98)	$	(0.30)	$	(2.08)	$	(0.61)

There were no preferred or other dividends declared for the period. For the periods presented, the following securities were not required to be included in the computation of diluted shares outstanding:


	September 30, 2020	September 30, 2019
Warrants	2,151	182
Stock options and RSUs	66,248	48,099
Convertible notes	—	3,890
Total	68,399	52,171

Related-Party Transactions	9 Months Ended
Related-Party Transactions	Sep. 30, 2020
Related-Party Transactions
Related-Party Transactions	14.Related-Party Transactions Media Purchase Agreement (“MPA”) In July 2015, Old DK entered into an MPA with a related party for various media placements from 2015 through 2018. The MPA was amended to extend through 2021. The annual commitment for calendar years 2017 through 2021 was $15,000 per year, plus an additional contingent commitment of $5,000 per year. The contingent commitment relates to the Company’s allocation of its non-integration advertising with other advertisers. Effective January 2019, the future minimum commitments related to the MPA were reduced to $15,000 in aggregate through December 31, 2021 ($5,000 per year) and the contingent commitment was removed. If the Company satisfies the $15,000 commitment prior to December 31, 2021, the MPA will expire unless the Company elects to extend the MPA through the next NFL season with no required minimum. The Company recorded expense of $7,692 and $11,092 related to the MPA for the three and nine months ended September 30, 2020 and recorded expense of $2,713 and $4,929 related to the MPA for the three and nine months ended September 30, 2019, respectively, in sales and marketing expenses in the unaudited condensed consolidated statements of operations. As of September 30, 2020 and December 31, 2019, $70 and $2,413, respectively, of MPA is included in accounts payable and accrued expenses in the unaudited condensed consolidated balance sheets. Private Placement Agent Old DK entered into an engagement letter with a related party (the “Private Placement Agent”) in August 2019, as amended in December 2019. Pursuant to the engagement letter, the Private Placement Agent has acted as the exclusive financial advisor to Old DK, and Old DK agreed to pay certain acquisition and financing fees in connection with the Business Combination with SBTech and DEAC. As of the nine months ended September 30, 2020 and September 30, 2019, Old DK incurred $12,349 and $0, respectively, of fees with the Private Placement Agent. During the three months ended September 30, 2020 and September 30, 2019, Old DK incurred $0 and $0, respectively. Receivables from Equity Method Investment The Company provides office space and general operational support to DKFS, LLC, an equity-method affiliate. The operational support is primarily general and administrative services. As of September 30, 2020, and December 31, 2019, the Company had $1,084 and $959, respectively, of receivables from the entity related to those services and expenses to be reimbursed to the Company, which are included within current assets in the unaudited condensed consolidated balance sheets. Transactions with a Shareholder and his Immediate Family Members The Business Combination Agreement requires payment to a shareholder in the event certain SBTech accounts receivable are collected. As of September 30, 2020, the Company had a $2,696 payable to the shareholder included in accounts payable and accrued expenses in the unaudited condensed balance sheet. In addition, the Company had $1,073 and $1,721 in sales to an entity related to an immediate family member of the shareholder during the three and nine months ended September 30, 2020 and had an associated accounts receivable balance of $839 as of September 30, 2020 included in accounts receivable in the unaudited condensed balance sheet. There were no related party transactions with the shareholder or their immediate family members for the three or nine months ended September 30, 2019 and no related accounts receivable balance as of December 31, 2019.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies

Commitments and Contingencies

15.Commitments and Contingencies

Leases

The Company rents its corporate office facilities, data centers, and motor vehicles under lease arrangements. The terms of the leases include scheduled base rent increases, and obligations to pay for a proportionate share of each property’s operating costs and tax escalations as defined in each lease. The total amount of rental payments due over each lease term is charged to rent expense ratably over the life of each lease.

Total rent expense for the three and nine months ended September 30, 2020 was $5,178 and $12,963, respectively, and for the three and nine months ended September 30, 2019 was $2,950 and $7,547, respectively.

Future minimum lease payments are as follows:


Years ending December 31,
From October 1, 2020 to December 31, 2020	$	3,699
2021		16,780
2022		14,927
2023		14,310
2024		12,596
Thereafter		37,638
Total	$	99,950

Other Contractual Obligations and Contingencies

The Company is a party to several non-cancelable contracts with vendors where the Company is obligated to make future minimum payments under the terms of these contracts as follows:


Years ending December 31,
From October 1, 2020 to December 31, 2020	$	25,246
2021		130,512
2022		121,923
2023		107,047
2024		100,976
Thereafter		378,000
Total*	$	863,704

* The above commitments include $443M of future expected contractual obligations to a media company as part of a multi-year content integration agreement.

Contingencies

From time to time, and in the ordinary course of business, the Company may be subject to certain claims, charges and litigation concerning matters arising in connection with the conduct of the Company’s business activities.

In Re: Daily Fantasy Sports Litigation (Multi-District Litigation)

Between late 2015 and early 2016, certain individuals who allegedly registered and competed in daily sports fantasy contests on our and FanDuel’s websites, and their family members, filed numerous actions (primarily purported class actions) against us, FanDuel, and other related parties in courts across the United States. In February 2016, these actions were consolidated in a multi-district litigation in the U.S. District Court for the District of Massachusetts. The plaintiffs asserted 27 claims arising under both state and federal law against the DFS defendants. The plaintiffs' claims against us generally fall into four categories: (1) our online daily fantasy sports contests constitute illegal gambling; (2) we promulgated false or misleading advertisements that emphasized the ease of play and likelihood of winning; (3) we induced consumers to lose money through a deceptive bonus program; and (4) we allowed our employees to participate in competitors' fantasy sports contests using non-public information, which gave such employees an unfair advantage over other contestants. The plaintiffs seek money damages, equitable relief, and disgorgement of gains against us. We intend to vigorously defend this case. We have established an accrual for this matter, but we cannot provide any assurance as to the outcome of this lawsuit.

Despite the potential for significant damages, we do not believe, based on currently available information, that the outcome of this proceeding will have a material adverse effect on DraftKings’ financial condition, although the outcome could be material to DraftKings’ operating results for any particular period, depending, in part, upon the operating results for such period.

1,000 Mass Arbitration Demands Filed by One Law Firm

On October 21, 2019, a law firm filed 1,000 “mass arbitrations” against us with the American Arbitration Association (“AAA”) on behalf of purported DraftKings users that assert claims similar to those in the multi-district litigation described above. After the law firm filed the 1,000 “mass arbitrations,” the AAA informed us in writing that it would close their files on, and decline to administer, the 1,000 “mass arbitrations” unless we waived two provisions in our terms of use and that the parties would then be free to bring their claims in court. We elected not to waive the subject terms of use provisions. On November 6, 2020 the law firm filed a complaint against DraftKings in Massachusetts Superior Court (Suffolk County), entitled Aaron Abramson, et al. v. DraftKings. In Abramson, the law firm is seeking, among other things, to compel arbitration against DraftKings on behalf of nine-hundred and ninety-nine (999) individuals.

We intend to vigorously defend all claims. If the claimants successfully compel arbitration and then obtain a judgment in their favor in these arbitrations, we could be subject to substantial damages and we could be restricted from offering DFS contests in certain states. Despite the potential for significant damages, we do not believe, based on currently available information, that the outcome of this proceeding will have a material adverse effect on DraftKings’ financial condition, although the outcome could be material to DraftKings’ operating results for any particular period, depending, in part, upon the operating results for such period. We cannot predict with any degree of certainty the outcome of Abramson or determine the extent of any potential liability or damages should the cases proceed to arbitration. We also cannot provide an estimate of the possible loss or range of loss.

Interactive Games LLC

On June 14, 2019, Interactive Games LLC (“IG”) filed suit against us in the U.S. District Court for the District of Delaware, alleging that our Daily Fantasy Sports product offering infringes two patents and our Sportsbook product offering infringes two additional patents. We intend to vigorously defend this case. In the event that a court ultimately determines that we are infringing the asserted patents, we may be subject to substantial damages, which may include treble damages and/or an injunction that could require us to modify certain features that we currently offer. We cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages. We also cannot provide an estimate of the possible loss or range of loss.

Internal Revenue Service

We are currently under Internal Revenue Service audit for prior tax years, with the primary unresolved issues relating to excise taxation of fantasy sports contests and informational reporting and withholding. The final resolution of that audit, and other audits or litigation, may differ from the amounts recorded in these unaudited condensed consolidated financial statements and may materially affect our unaudited condensed consolidated financial statements in the period or periods in which that determination is made.

Letters of Credit

In connection with the Credit Agreement with Pacific Western Bank, the Company has entered into several letters of credit totaling $5,053 and $4,481 as of September 30, 2020 and December 31, 2019, respectively, for the Company’s leases of office space.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2020
Subsequent Events
Subsequent Events	16.Subsequent Events The Company considers events or transactions that occur after the balance sheet date, but before the unaudited condensed consolidated financial statements are issued, to provide additional evidence relative to certain estimates or identify matters that require additional disclosures. The Company evaluated subsequent events through November 13, 2020, the date on which the unaudited condensed consolidated financial statements were available to be issued. The unaudited condensed consolidated financial statements reflect those material items that arose after the balance sheet date, but prior to this date that would be considered recognized subsequent events. On October 9, 2020, the Company completed an underwritten public offering of 36,800 shares of its Class A common stock. Pursuant to the terms of the offering, DraftKings sold 20,800 shares of its Class A common stock (inclusive of the full exercise of the underwriters' option to purchase 4,800 shares of Class A common stock) and certain selling stockholders of DraftKings sold 16,000 shares of Class A common stock, at a public offering price of $52.00 per share for a total offering size of $1,914,000. The Company received proceeds from the offering of approximately $1.06 billion (net of underwriting discounts and commissions). DraftKings did not receive any proceeds from the sale of Class A common stock offered by the selling stockholders.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies and Practices

Basis of Presentation and Principles of Consolidation

Comprehensive Income (Loss)

Foreign Currency

Use of Estimates

Going Concern

Emerging Growth Company

Concentration of Credit Risk

Concentrations of Credit Risk

Acquisitions

Cash and cash equivalents

Cash Reserved for Users

Receivables Reserved for Users

Accounts Receivables

Property and Equipment, Net


Computer equipment and software		3 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years

Intangible Assets, Net

Developed Technology

Customer Relationships

Internally Developed Software

Gaming Licenses

Trademarks and Tradenames

Goodwill

Impairment of Long-Lived Assets

Equity Method Investment

The Company determines revenue recognition through the following steps:

· Identify the contract, or contracts, with the customer;

· Identify the performance obligations in the contract;

· Determine the transaction price;

· Allocate the transaction price to performance obligations in the contract; and

· Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services.

Online Gaming

Gaming software

Transaction Price Considerations

Variable Consideration

Allocation of transaction price to performance obligations

Certain costs to obtain or fulfill contracts

Contract balances

Cost of Revenue

Sales and Marketing

Product and Technology

General and Administrative

Stock-based Compensation

Income Taxes

Fair Value Measurements

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Earnings (loss) per share

Recently Adopted Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Summary of Significant Accounting Policies and Practices (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Significant Accounting Policies and Practices

Summary of Useful lives of each asset


Computer equipment and software		3 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of the lease terms or the estimated useful lives of the improvements, generally 1-10 years

Business Combination (Tables)

9 Months Ended

Sep. 30, 2020

Business Combination

Summary of consideration transferred at Closing

The following summarizes the consideration transferred at Closing for the SBTech Acquisition (in thousands):


Purchase consideration

Cash consideration(1)	$	182,862
Share consideration(2)		789,065
Other cash consideration(3)		3,614
Total SBTech consideration	$	975,541

⁽¹⁾

⁽²⁾

⁽³⁾

Summary of preliminary pending finalization of valuation analyses pertaining to intangible assets acquired and tax liabilities assumed including the calculation of deferred tax assets and liabilities


Cash and cash equivalents	$	9,639
Trade receivables		18,741
Other current assets		1,848
Property and equipment		10,677
Intangible assets		490,513
Other non-current assets		1,017
Total identifiable assets acquired		532,435
Liabilities assumed:
Accounts payable and accrued expenses		23,613
Other long-term liabilities		4,226
Total liabilities assumed		27,839
Net assets acquired (a)		504,596
Estimated purchase consideration (b)		975,541
Estimated goodwill (b) – (a)	$	470,945

Summary of intangible assets


			Weighted-Average
	Fair Value		Useful Life (in years)

Developed Technology	$	392,028	8
Customer relationships		93,699	5
Trademarks and trade names		4,308	3
Gaming License		478	2-3
Total	$	490,513

Summary of pro forma financial information


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
	Actual		Pro Forma		Pro Forma		Pro Forma
Revenue	$	132,836	$	93,318	$	321,279	$	269,259
Net loss	$	(347,753)	$	(62,574)	$	(578,979)	$	(187,710)

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property and Equipment

Summary of property and equipment, net


	September 30, 2020		December 31, 2019
Computer equipment and software	$	23,661	$	9,685
Furniture and fixtures		7,664		5,891
Leasehold improvements		22,267		17,373
Property and Equipment		53,592		32,949
Accumulated depreciation		(14,110)		(7,004)
Property and Equipment, net	$	39,482	$	25,945

Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2020

Intangible Assets and Goodwill

Summary of intangible assets other than goodwill


	Weighted-
	Average
	Remaining	Gross
	Amortization	Carrying		Accumulated
	Period	Amount		Amortization		Net
Developed Technology	7.57 years	$	426,062	$	(23,226)	$	402,836
Internally developed software	2.33 years		63,464		(29,652)		33,812
Gaming Licenses	4.31 years		19,450		(3,798)		15,652
Trademarks and tradenames	2.57 years		4,682		(681)		4,001
Customer relationships	4.57 years		101,833		(8,882)		92,951
Intangible Assets, net		$	615,491	$	(66,239)	$	549,252


	Weighted-
	Average
	Remaining	Gross
	Amortization	Carrying		Accumulated
	Period	Amount		Amortization		Net
Internally developed software	2.35 years	$	43,753	$	(21,188)	$	22,565
Gaming Licenses	4.86 years		12,003		(629)		11,374
Intangible Assets, net		$	55,756	$	(21,817)	$	33,939

Summary of changes in the carrying amount of goodwill


	B2C		B2B		Total
Balance as of December 31, 2019	$	4,738	$	—	$	4,738
Goodwill acquired in SBTech Acquisition*		348,345		122,600		470,945
Cumulative Translation Adjustment		—		10,644		10,644
Balance as of September 30, 2020	$	353,083	$	133,244	$	486,327

* = Preliminary allocation.

Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2020

Accounts Payable and Accrued Expenses

Summary of Accounts payable and accrued expenses


	September 30, 2020		December 31, 2019
Accounts payable	$	24,401	$	16,618
Accrued compensation and related expenses		27,843		17,770
Accrued marketing		97,788		11,855
Accrued professional fees		13,299		10,344
Accrued operating taxes		14,050		5,745
Accrued partnership fees		12,000		7,868
Accrued other expenses		36,941		15,095
Total	$	226,322	$	85,295

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2020

Revenue Recognition

Summary of deferred revenue balances


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Deferred revenue, beginning of the period	$	24,759	$	13,280	$	20,760	$	13,581
Deferred revenue, end of the period		33,464		15,986		33,464		15,986
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period		6,632		5,966		10,505		9,819

Summary of disaggregation of revenue


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Online gaming	$	99,477	$	62,475	$	238,591	$	183,877
Gaming software		29,185		—		44,139		—
Other		4,174		4,539		9,579		8,619
Total Revenue	$	132,836	$	67,014	$	292,309	$	192,496

Summary of Company's revenue by geographic region


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
United States	$	106,938	$	67,249	$	254,325	$	189,539
International		25,898		(235)		37,984		2,957
Total Revenue	$	132,836	$	67,014	$	292,309	$	192,496

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Stock-Based Compensation

Summary of stock option activity

The following table shows stock option activity for the nine months ended September 30, 2020 and 2019:


										Weighted-
								Weighted-		Average
								Average		Remaining	Aggregate
								Exercise		Term	Intrinsic
	Time Based		PSP (3)		LTIP (3)			Price		(in Years)	Value
	Options	RSUs	Options	RSUs	Options	RSUs	Total
Outstanding at December 31, 2018	66,527	—	5,161	—	40,189	—	111,877	$	0.84	8.15	$	69,765
Recapitalization Impact	(43,003)	—	(3,336)	—	(25,978)	—	(72,317)		1.54	—		—
Outstanding at December 31, 2018	23,524	—	1,825	—	14,211	—	39,560		2.38	8.15	$	69,765
Granted	5,479	—	2,214	—	1,990	—	9,683		4.70	—		—
Exercised options / vested RSUs	(754)	—	(16)	—	—	—	(770)		1.14	—		—
Forfeited	(355)	—	(19)	—	—	—	(374)		3.39	—		—
Outstanding at September 30, 2019	27,894	—	4,004	—	16,201	—	48,099	$	2.85	7.88	$	90,282

Outstanding at December 31, 2019	78,772	—	11,233	—	45,817	—	135,822	$	1.01	7.64	$	203,431
Recapitalization Impact	(50,919)	—	(7,261)	—	(29,616)	—	(87,796)		1.85	—		—
Outstanding at December 31, 2019	27,853	—	3,972	—	16,201	—	48,026		2.86	7.64	$	203,431
Granted	4,781	3,696	—	907	—	15,554	24,938		0.97	—		—
Exercised options / vested RSUs	(4,695)	(73)	(618)	—	(638)	—	(6,024)		1.69	—		—
Forfeited	(684)	(8)	—	—	—	—	(692)		4.13	—		—
Outstanding at September 30, 2020	27,255	3,615	3,354	907	15,563	15,554	66,248	$	2.16	7.34	$	3,754,747

Vested as of September 30, 2020
Time Based	20,387	14	—	—	—	—	20,401	$	2.10	—		—
PSP	—	—	3,354	—	—	—	3,354		4.18	—		—
LTIP	—	—	—	—	15,563	—	15,563		3.43	—		—
	20,387	14	3,354	—	15,563	—	39,318	$	2.80	7.18	$	2,191,530

Estimate of Expected to Vest(1)
2020(2)	947	122	—	—	—	15,554	16,623	$	0.27	—		—
2021	3,401	1,240	—	865	—	—	5,506		2.97	—		—
2022+	2,205	2,074	—	—	—	—	4,279		2.48	—		—
	6,553	3,436	—	865	—	15,554	26,408	$	1.19	7.56	$	1,533,542

Effect of estimated forfeitures	315	165	—	42	—	—	522	$	2.91	8.26	$	29,675

⁽¹⁾

Contemplates the impact of estimated forfeitures.

⁽²⁾

For remainder of 2020 period.

⁽³⁾

Performance based instruments.

Summary of stock compensation expense


	Three months ended September 30, 2020						Nine months ended September 30, 2020
	Options		RSUs		Total		Options		RSUs		Total
Time Based	$	2,054	$	8,867	$	10,921	$	5,223	$	9,047	$	14,270
PSP		—		3,479		3,479		1,633		3,479		5,112
LTIP (1)		—		102,634		102,634		9,552		139,428		148,980
B Shares (2)		—		—		—		8,000		—		8,000
Total	$	2,054	$	114,980	$	117,034	$	24,408	$	151,954	$	176,362


	Three months ended						Nine months ended
	September 30, 2019						September 30, 2019
	Options		RSUs		Total		Options		RSUs		Total
Time Based	$	1,844	$	—	$	1,844	$	5,455	$	—	$	5,455
PSP		—		—		—		3,064		—		3,064
LTIP (1)		—		—		—		—		—		—
B Shares (2)		—		—		—		—		—		—
Total	$	1,844	$	—	$	1,844	$	8,519	$	—	$	8,519

⁽¹⁾

Resulting from amortization of stock-based compensation expense and anticipated achievement of share price targets

⁽²⁾

Related to the Business Combination; Class B shares have no economic rights.

Income Tax (Tables)

9 Months Ended

Sep. 30, 2020

Income Taxes

Schedule of Company's provision for income tax

Three and nine months ended September 30, 2020 and September 30, 2019 is as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Provision (benefit) for income taxes	$	(13)	$	19	$	319	$	35

Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Information

Summary of financial information for the Company's segments

Summarized financial information for the Company’s segments is shown in the following tables:


	Three months ended September 30,
	2020		2019
Revenue:
B2C	$	103,651	$	67,014
B2B		29,185		—
Total revenue		132,836		67,014

Adjusted EBITDA:
B2C		(201,455)		(48,421)
B2B		4,376		—
Total adjusted EBITDA		(197,079)		(48,421)
Adjusted for:
Depreciation and amortization		26,595		3,430
Interest (income) expense, net		(686)		(277)
Income tax expense		(13)		19
Stock-based compensation		117,034		1,844
Transaction-related costs		3,585		1,328
Litigation, settlement and related costs		2,419		710
Other non-recurring costs and special project costs		1,645		444
Non-operating costs		95		—
Net Loss attributable to common shareholders	$	(347,753)	$	(55,919)


	Nine months ended September 30,
	2020		2019
Revenue:
B2C	$	248,170	$	192,496
B2B		44,139		—
Total revenue		292,309		192,496

Adjusted EBITDA:
B2C		(304,889)		(89,937)
B2B		854		—
Total adjusted EBITDA		(304,035)		(89,937)
Adjusted for:
Depreciation and amortization		49,967		9,629
Interest (income) expense, net		2,253		(1,364)
Income tax expense		319		35
Stock-based compensation		176,362		8,519
Transaction-related costs		34,492		2,603
Litigation, settlement and related costs		5,771		2,411
Other non-recurring costs and special project costs		4,291		1,816
Non-operating costs		380		—
Net Loss attributable to common shareholders	$	(577,870)	$	(113,586)

Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Loss Per Share

Schedule of loss per share and weighted-average shares

The computation of loss per share and weighted-average shares of the Company’s Class A common stock outstanding for the periods presented are as follows:


	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Net loss	$	(347,753)	$	(55,919)	$	(577,870)	$	(113,586)
Basic and diluted weighted-average common shares outstanding		355,900		185,686		277,932		184,787
Loss per share attributable to common stockholders:
Basic and diluted	$	(0.98)	$	(0.30)	$	(2.08)	$	(0.61)

Schedule of computation of diluted shares outstanding


	September 30, 2020	September 30, 2019
Warrants	2,151	182
Stock options and RSUs	66,248	48,099
Convertible notes	—	3,890
Total	68,399	52,171

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies

Summary of future minimum lease payments

Future minimum lease payments are as follows:


Years ending December 31,
From October 1, 2020 to December 31, 2020	$	3,699
2021		16,780
2022		14,927
2023		14,310
2024		12,596
Thereafter		37,638
Total	$	99,950

Summary of other contractual obligations and contingencies

The Company is a party to several non-cancelable contracts with vendors where the Company is obligated to make future minimum payments under the terms of these contracts as follows:


Years ending December 31,
From October 1, 2020 to December 31, 2020	$	25,246
2021		130,512
2022		121,923
2023		107,047
2024		100,976
Thereafter		378,000
Total*	$	863,704

* The above commitments include $443M of future expected contractual obligations to a media company as part of a multi-year content integration agreement.

Summary of Significant Accounting Policies and Practices (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Receivables Reserved for Users
Provision for receivables reserved for users	$ 110	$ 0
Accounts Receivables
Provision for accounts receivables	$ 233	$ 0

Summary of Significant Accounting Policies Property and Equipment Net (Details)	9 Months Ended
	Sep. 30, 2020
Computer equipment and software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Minimum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	1 year
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years

Summary of Significant Accounting Policies and Practices Finite Lived Intangible Asset (Details)	9 Months Ended
	Sep. 30, 2020 item
Finite-Lived Intangible Assets [Line Items]
Number of reporting units	3
Developed Technology
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	8 years
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	5 years
Trademarks and tradenames
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Minimum \| Internally developed software
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	3 years
Maximum \| Internally developed software
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	4 years

Summary of Significant Accounting Policies and Practices Schedule Of Equity Method Investments (Details)	Sep. 30, 2020
DKFS, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	46.00%

Summary of Significant Accounting Policies and Practices (Details)	9 Months Ended
	Sep. 30, 2020 USD ($)
Minimum
Disaggregation of Revenue [Line Items]
Entry fee	$ 0
Maximum
Disaggregation of Revenue [Line Items]
Entry fee	$ 10,000

Business Combination (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		9 Months Ended
	Apr. 23, 2020	Sep. 30, 2020	Dec. 31, 2019
Liabilities assumed:
Estimated goodwill (b) - (a)		$ 486,327	$ 4,738
Amount allocated to goodwill		$ 486,327	4,738
SBTech
Business Acquisition [Line Items]
Equity interest acquired		100.00%
Shares, options, and earnout shares issued for acquisition		45,017
Weighted average fair value		$ 17.53
Increase in consideration based on increase as defined in Business Combination Agreement		$ 10.17
Purchase consideration
Cash consideration(1)		$ 182,862
Share consideration(2)		789,065
Other cash consideration(3)		3,614
Total SBTech consideration	$ 975,541	$ 975,541
Share consideration (in shares)		3,558
Share consideration excluding contingent consideration		$ 776,524
Vested options		40,739
Contingent consideration for earnout shares issued to former stockholders		$ 12,541
Contingent consideration for earnout shares issued to former stockholders (in shares)		720
Preliminary pending finalization of valuation analyses pertaining to intangible assets acquired and tax liabilities assumed
Cash and cash equivalents	9,639
Trade receivables	18,741
Other current assets	1,848
Property and equipment	10,677
Intangible assets	490,513
Other non-current assets	1,017
Total identifiable assets acquired	532,435
Liabilities assumed:
Accounts payable and accrued expenses	23,613
Other long-term liabilities	4,226
Total liabilities assumed	27,839
Net assets acquired (a)	504,596
Estimated purchase consideration (b)	975,541	$ 975,541
Estimated goodwill (b) - (a)	470,945
Amount allocated to goodwill	470,945
B2C segments
Liabilities assumed:
Estimated goodwill (b) - (a)		353,083	4,738
Amount allocated to goodwill		353,083	$ 4,738
B2C segments \| SBTech
Liabilities assumed:
Estimated goodwill (b) - (a)	348,345
Amount allocated to goodwill	348,345
B2B segments
Liabilities assumed:
Estimated goodwill (b) - (a)		133,244
Amount allocated to goodwill		$ 133,244
B2B segments \| SBTech
Liabilities assumed:
Estimated goodwill (b) - (a)	122,600
Amount allocated to goodwill	$ 122,600

Business Combination Finite Lived Intangible Assets (Details) - SBTech $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Residual Value	$ 490,513
Developed Technology
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Residual Value	$ 392,028
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	8 years
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Residual Value	$ 93,699
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Trademarks and tradenames
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Residual Value	$ 4,308
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years
Gaming Licenses
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Asset, Residual Value	$ 478
Gaming Licenses \| Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	2 years
Gaming Licenses \| Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years

Business Combination - Acquisition (Details) - SBTech - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Business Acquisition [Line Items]
Transaction costs incurred	$ 0		$ 30,906
Amount of expense incurred related to equity issuance costs	41,378		41,378
Business Acquisition, Pro Forma Information [Abstract]
Net Revenue	132,836	$ 93,318	321,279	$ 269,259
Net Loss	(347,753)	$ (62,574)	(578,979)	$ (187,710)
Revenue since acquisition	29,185,000		44,139
Net loss since acquisition	$ 3,731,000		$ 10,669

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment, Net, by Type [Abstract]
Property and Equipment	$ 53,592		$ 53,592		$ 32,949
Accumulated depreciation	(14,110)		(14,110)		(7,004)
Property and Equipment, net	39,482		39,482		25,945
Depreciation expense	2,749	$ 1,249	6,489	$ 3,225
Computer equipment and software
Property, Plant and Equipment, Net, by Type [Abstract]
Property and Equipment	23,661		23,661		9,685
Furniture and fixtures
Property, Plant and Equipment, Net, by Type [Abstract]
Property and Equipment	7,664		7,664		5,891
Leasehold improvements
Property, Plant and Equipment, Net, by Type [Abstract]
Property and Equipment	$ 22,267		$ 22,267		$ 17,373

Intangible Assets and Goodwill Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 615,491	$ 55,756
Accumulated Amortization	(66,239)	(21,817)
Net	$ 549,252	$ 33,939
Developed Technology
Finite-Lived Intangible Assets, Net [Abstract]
Weighted-Average Remaining Amortization Period	7 years 6 months 26 days
Gross Carrying Amount	$ 426,062
Accumulated Amortization	(23,226)
Net	$ 402,836
Internally developed software
Finite-Lived Intangible Assets, Net [Abstract]
Weighted-Average Remaining Amortization Period	2 years 3 months 29 days	2 years 4 months 6 days
Gross Carrying Amount	$ 63,464	$ 43,753
Accumulated Amortization	(29,652)	(21,188)
Net	$ 33,812	$ 22,565
Gaming Licenses
Finite-Lived Intangible Assets, Net [Abstract]
Weighted-Average Remaining Amortization Period	4 years 3 months 22 days	4 years 10 months 10 days
Gross Carrying Amount	$ 19,450	$ 12,003
Accumulated Amortization	(3,798)	(629)
Net	$ 15,652	$ 11,374
Trademarks and tradenames
Finite-Lived Intangible Assets, Net [Abstract]
Weighted-Average Remaining Amortization Period	2 years 6 months 26 days
Gross Carrying Amount	$ 4,682
Accumulated Amortization	(681)
Net	$ 4,001
Customer relationships
Finite-Lived Intangible Assets, Net [Abstract]
Weighted-Average Remaining Amortization Period	4 years 6 months 26 days
Gross Carrying Amount	$ 101,833
Accumulated Amortization	(8,882)
Net	$ 92,951

Intangible Assets and Goodwill (Details) $ in Thousands	9 Months Ended
Intangible Assets and Goodwill (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2019	$ 4,738
Goodwill acquired in SBTech Acquisition	470,945
Cumulative Translation Adjustment	10,644
Balance as of September 30, 2020	486,327
B2C segments
Goodwill [Roll Forward]
Balance as of December 31, 2019	4,738
Goodwill acquired in SBTech Acquisition	348,345
Balance as of September 30, 2020	353,083
B2B segments
Goodwill [Roll Forward]
Goodwill acquired in SBTech Acquisition	122,600
Cumulative Translation Adjustment	10,644
Balance as of September 30, 2020	$ 133,244

Intangible Assets and Goodwill - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Finite-Lived Intangible Assets, Net [Abstract]
Amortization expense	$ 23,846	$ 2,181	$ 43,478	$ 6,404

Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accounts payable and accrued expenses
Accounts payable	$ 24,401	$ 16,618
Accrued compensation and related expenses	27,843	17,770
Accrued marketing	97,788	11,855
Accrued professional fees	13,299	10,344
Accrued operating taxes	14,050	5,745
Accrued partnership fees	12,000	7,868
Accrued other expenses	36,941	15,095
Total	$ 226,322	$ 85,295

Current and Long-term Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Estimated contingent liability for indirect taxes	$ 43,771	$ 35,899
Short-term deferred rent liabilities	1,328	1,125
Long-term deferred rent liabilities	11,025	9,747
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	60,000	50,000
Principal outstanding	0	6,750
Net facility available from the Credit Agreement	$ 54,947	$ 38,769

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Stockholder's Equity (Details) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) item $ / shares shares	Sep. 30, 2019 USD ($)	Dec. 31, 2019 $ / shares shares	Dec. 31, 2018
Class of Stock [Line Items]
DEAC shares recapitalized, net of redemptions and equity issuance costs of $10,631		$ 665,485
DEAC shares recapitalized, Redemptions and equity issuance costs		10,631
Buyout of unaccredited investors				$ 7,192	$ 0
Proceeds from issuance of common stock				$ 620,800	$ 439
Stock Issued During Period, Value, New Issues		$ 620,800	$ 438
Preferred stock, shares authorized \| shares				300,000
Preferred stock, par value \| $ / shares				$ 0.0001		$ 0.0001
Preferred stock, shares issued \| shares				0		0
Preferred stock, shares outstanding \| shares				0		0
SBTech
Class of Stock [Line Items]
Recapitalization exchange ratio						0.353628	0.353628
Cash and other cash consideration				$ 186,477
Buyout of unaccredited investors				7,192
Net cash proceeds				$ 484,962
Series F \| SBTech
Class of Stock [Line Items]
Share conversion factor				1.40
Class A common stock
Class of Stock [Line Items]
DEAC shares recapitalized, net of redemptions and equity issuance costs of $10,631				$ 665,485
DEAC shares recapitalized, Redemptions and equity issuance costs				$ 10,631
Proceeds from issuance of common stock	$ 620,800
Stock Issued During Period, Value, New Issues	$ 16,000
Class A common stock \| Convertible Noteholders
Class of Stock [Line Items]
Number of shares of common stock issued in conversion of debt \| shares				11,254,000
Class A common stock \| SBTech
Class of Stock [Line Items]
Recapitalization exchange ratio				0.353628
Jason Robins
Class of Stock [Line Items]
Number of votes per share \| item				10
Voting power of the capital stock held				90.00%
Principal amount of debt converted to equity securities				$ 109,165
Unpaid accrued interest related to debt converted to equity securities				$ 3,380
Share price \| $ / shares				$ 10
Jason Robins \| Class B common stock
Class of Stock [Line Items]
Number of shares issued \| shares				393,014,000

Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue Recognition
Deferred revenue, beginning of the period	$ 24,759	$ 13,280	$ 20,760	$ 13,581
Deferred revenue, end of the period	33,464	15,986	33,464	15,986
Revenue recognized in the period from amounts included in deferred revenue at the beginning of the period	$ 6,632	$ 5,966	$ 10,505	$ 9,819

Revenue Recognition - Revenue Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Total Revenue	$ 132,836	$ 67,014	$ 292,309	$ 192,496
Online gaming
Disaggregation of Revenue [Line Items]
Total Revenue	99,477	62,475	238,591	183,877
Gaming software
Disaggregation of Revenue [Line Items]
Total Revenue	29,185		44,139
Other
Disaggregation of Revenue [Line Items]
Total Revenue	$ 4,174	$ 4,539	$ 9,579	$ 8,619

- Definition

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue Recognition - Revenue by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Total Revenue	$ 132,836	$ 67,014	$ 292,309	$ 192,496
United States
Disaggregation of Revenue [Line Items]
Total Revenue	106,938	67,249	254,325	189,539
International
Disaggregation of Revenue [Line Items]
Total Revenue	$ 25,898	$ (235)	$ 37,984	$ 2,957

- Definition

+ References

+ Details

Stock-Based Compensation - Stock option activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($) item $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares
Options Activity
Outstanding at the beginning			135,822	111,877
Total \| $	$ 289,665
Recapitalization Impact			(87,796)	(72,317)
Outstanding at the beginning	48,026	39,560	39,560
Granted	24,938	9,683
Exercised	(6,024)	(770)
Forfeited	(692)	(374)
Outstanding at the end	66,248	48,099	48,026	39,560
Vested	39,318
2020	16,623
2021	5,506
2022	4,279
Estimate of Expected to Vest	26,408
Effect of estimated forfeitures	522
Weighted-Average Exercise Price
Outstanding (in dollars per share) \| $ / shares			$ 1.01	$ 0.84
Recapitalization Impact (in dollars per share) \| $ / shares			1.85	1.54
Outstanding (in dollars per share) \| $ / shares	$ 2.86	$ 2.38	2.38
Granted (in dollars per share) \| $ / shares	0.97	4.70
Exercised (in dollars per share) \| $ / shares	1.69	1.14
Forfeited (in dollars per share) \| $ / shares	4.13	3.39
Outstanding at the end (in dollars per share) \| $ / shares	2.16	$ 2.85	$ 2.86	$ 2.38
Effect of estimated forfeitures (in dollars per share) \| $ / shares	$ 2.91
Weighted Average Remaining Term (in Years) and aggregate Intrinsic Value
Outstanding (in years)	7 years 4 months 2 days	7 years 10 months 17 days	7 years 7 months 21 days	8 years 1 month 24 days
Estimate of Expected to Vest (in years)	7 years 6 months 22 days
Effect of estimated forfeitures (in years)	8 years 3 months 4 days
Outstanding at the end (in dollars) \| $	$ 3,754,747	$ 90,282	$ 203,431	$ 69,765
Estimate of Expected to Vest (in dollars) \| $	1,533,542
Effect of estimated forfeitures (in dollars) \| $	$ 29,675
Estimate of Expected to Vest (in dollars per share)
2020 \| $ / shares	$ 0.27
2021 \| $ / shares	2.97
2022 \| $ / shares	2.48
Estimate of expected to vest (per share) \| $ / shares	$ 1.19
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of types of stock-based compensation \| item	3
Vesting period	4 years
Expiration period	10 years
Time Based Options
Options Activity
Outstanding at the beginning			78,772
Options \| $				$ 66,527
Recapitalization Impact			(50,919)	(43,003)
Outstanding at the beginning	27,853	23,524	23,524
Granted	4,781	5,479
Exercised	(4,695)	(754)
Forfeited	(684)	(355)
Outstanding at the end	27,255	27,894	27,853	23,524
Vested	20,387
2020	947
2021	3,401
2022	2,205
Estimate of Expected to Vest	6,553
Effect of estimated forfeitures	315
Time Based RSUs
Options Activity
Vested	14
RSUs
Granted	3,696
Vested	(73)
Forfeited	(8)
Outstanding balance	3,615
Estimate of expected to Vest
2020	122
2021	1,240
2022	2,074
Total	3,436
Estimate of Expected to Vest (in dollars per share)
Effect of estimated forfeitures	165
PSP Options
Options Activity
Outstanding at the beginning			11,233
Options \| $				$ 5,161
Recapitalization Impact			(7,261)	(3,336)
Outstanding at the beginning	3,972	1,825	1,825
Granted		2,214
Exercised	(618)	(16)
Forfeited		(19)
Outstanding at the end	3,354	4,004	3,972	1,825
Vested	3,354
PSP RSUs
Options Activity
Granted	907
Outstanding at the end	907
Estimate of expected to Vest
2021	865
Total	865
Estimate of Expected to Vest (in dollars per share)
Effect of estimated forfeitures	42
LTIP Options
Options Activity
Outstanding at the beginning			45,817
Options \| $				$ 40,189
Recapitalization Impact			(29,616)	(25,978)
Outstanding at the beginning	16,201	14,211	14,211
Granted		1,990
Exercised	(638)
Outstanding at the end	15,563	16,201	16,201	14,211
Vested	15,563
LTIP RSUs
Options Activity
Granted	15,554
Outstanding at the end	15,554
Estimate of expected to Vest
2020	15,554
Total	15,554
Time Based
Options Activity
Vested	20,401
Weighted-Average Exercise Price
Vested (in dollars per share) \| $ / shares	$ 2.10
PSP
Options Activity
Vested	3,354
Weighted-Average Exercise Price
Vested (in dollars per share) \| $ / shares	$ 4.18
LTIP
Options Activity
Vested	15,563
Weighted-Average Exercise Price
Vested (in dollars per share) \| $ / shares	$ 3.43
Time based, PSP and LTIP
Weighted-Average Exercise Price
Vested (in dollars per share) \| $ / shares	$ 2.80
Weighted Average Remaining Term (in Years) and aggregate Intrinsic Value
Vested (in years)	7 years 2 months 5 days
Vested (in dollars) \| $	$ 2,191,530

Stock-Based Compensation - Stock compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized stock-based compensation expense	$ 289,665		$ 289,665
Total unrecognized stock-based compensation expense expected to be recognized over a weighted-average period			1 year 7 months 13 days
Stock compensation expense, Options	2,054	$ 1,844	$ 24,408	$ 8,519
Stock compensation expense, RSU	114,980		151,954
Stock compensation expense	117,034	1,844	176,362	8,519
Class B common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense, Options			8,000
Stock compensation expense			8,000
Time Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense, Options	2,054	1,844	5,223	5,455
Stock compensation expense, RSU	8,867		9,047
Stock compensation expense	10,921	$ 1,844	14,270	5,455
PSP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense, Options			1,633	3,064
Stock compensation expense, RSU	3,479		3,479
Stock compensation expense	3,479		$ 5,112	$ 3,064
PSP \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance objectives in years			2 years
PSP \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance objectives in years			1 year
LTIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense, Options			$ 9,552
Stock compensation expense, RSU	102,634		139,428
Stock compensation expense	$ 102,634		$ 148,980

Income Taxes - Reconciliation of the federal income tax rate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Reconciliation of the federal income tax rate to the Company's effective tax rate
Provision (benefit) for income taxes	$ (13)	$ 19	$ 319	$ 35
Statutory federal income tax rate	0.00%	(0.03%)	(0.06%)	(0.03%)
State taxes, net of federal tax benefit			21.00%	21.00%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Segment Information (Details) $ in Thousands		3 Months Ended						9 Months Ended
Segment Information (Details) $ in Thousands	Apr. 23, 2020 segment	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Segment Reporting Information, Profit (Loss) [Abstract]
Total revenue		$ 132,836			$ 67,014			$ 292,309	$ 192,496
Total adjusted EBITDA		(197,079)			(48,421)			(304,035)	(89,937)
Depreciation and amortization		26,595			3,430			49,967	9,629
Interest (income) expense, net		(686)			(277)			2,253	(1,364)
Income tax expense		(13)			19			319	35
Stock-based compensation		117,034			1,844			176,362	8,519
Transaction-related costs		3,585			1,328			34,492	2,603
Litigation, settlement and related costs		2,419			710			5,771	2,411
Other non-recurring costs and special project costs		1,645			444			4,291	1,816
Non-operating costs		(95)						(380)
Net Loss attributable to common shareholders		(347,753)	$ (161,437)	$ (68,680)	(55,919)	$ (28,113)	$ (29,554)	(577,870)	(113,586)
B2C segments
Segment Reporting Information [Line Items]
Number of operating segments \| segment	2
Segment Reporting Information, Profit (Loss) [Abstract]
Total revenue		103,651			67,014			248,170	192,496
Total adjusted EBITDA		(201,455)			$ (48,421)			(304,889)	$ (89,937)
B2B segments
Segment Reporting Information [Line Items]
Number of reportable segments \| segment	2
Segment Reporting Information, Profit (Loss) [Abstract]
Total revenue		29,185						44,139
Total adjusted EBITDA		$ 4,376						$ 854

Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Loss Per Share
Net loss	$ (347,753)	$ (161,437)	$ (68,680)	$ (55,919)	$ (28,113)	$ (29,554)	$ (577,870)	$ (113,586)
Basic and diluted weighted-average common shares outstanding	355,900			185,686			277,932	184,787
Loss per share attributable to common stockholders:
Basic and diluted	$ (0.98)			$ (0.30)			$ (2.08)	$ (0.61)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Loss Per Share - Diluted shares outstanding (Details) - shares	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	68,399	52,171
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,151	182
Stock options and RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	66,248	48,099
Convertible notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total		3,890

Related-Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2021	Dec. 31, 2019
Related Party Transaction [Line Items]
Total commitment	$ 863,704		$ 863,704
Revenue from related parties	1,073		1,721
Administrative Services Agreement
Total administrative services expenses	0	$ 0	12,349	$ 0
Shareholder
Related Party Transaction [Line Items]
Payable to shareholder	2,696		2,696
SB Tech
Related Party Transaction [Line Items]
Accounts receivable	839		839			$ 0
Related party transactions		0		0
Media Purchase Agreement
Related Party Transaction [Line Items]
Annual commitment					$ 15,000
Additional contingent commitment	5,000		5,000		$ 5,000
Total commitment	15,000		15,000
Sales and marketing expenses from related party transaction	7,692	$ 2,713	11,092	$ 4,929
Amount due to related party	70		70			2,413
Equity Method Investee
Related Party Transaction [Line Items]
Receivables from Equity Method Investment	$ 1,084		$ 1,084			$ 959

Commitments and Contingencies (Details)				3 Months Ended		9 Months Ended
Commitments and Contingencies (Details)	Nov. 06, 2020 USD ($)	Oct. 21, 2019 claim	Jun. 14, 2019 patent	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Other Commitments [Line Items]
Rent expenses				$ 5,178	$ 2,950	$ 12,963	$ 7,547
Contractual obligations				863,704,000		863,704,000
Mass Arbitration Demands Filed by One Law Firm
Other Commitments [Line Items]
Number of mass arbitrations filed against the company \| claim		1,000
Number of individuals filed against the company	999
Interactive Games LLC \| Daily Fantasy Sports
Other Commitments [Line Items]
Number of patents allegedly infringed \| patent			2
Interactive Games LLC \| Sportsbook product
Other Commitments [Line Items]
Number of patents allegedly infringed \| patent			2
Media Purchase Agreement
Other Commitments [Line Items]
Contractual obligations				443,000,000		443,000,000
Letter of Credit [Member] \| Pacific Western Bank
Other Commitments [Line Items]
Letters of credit				$ 5,053		$ 5,053		$ 4,481

Commitments and Contingencies - Future minimum lease payments (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
From October 1, 2020 to December 31, 2020	$ 3,699
2021	16,780
2022	14,927
2023	14,310
2024	12,596
Thereafter	37,638
Total	$ 99,950

Commitments and Contingencies - Other Contractual Obligations and Contingencies (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Other Contractual Obligations and Contingencies
From October 1, 2020 to December 31, 2020	$ 25,246
2021	130,512
2022	121,923
2023	107,047
2024	100,976
Thereafter	378,000
Total	$ 863,704

Subsequent Events (Details) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
Subsequent Events (Details) - USD ($)	Oct. 09, 2020	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Subsequent Event [Line Items]
Total offering size			$ 620,800,000	$ 438,000
Proceeds from issuance of Class A common stock, net of issuance costs					$ 620,800,000	$ 439,000
Class A common stock
Subsequent Event [Line Items]
Total offering size		$ 16,000,000
Proceeds from issuance of Class A common stock, net of issuance costs		$ 620,800,000
Over-allotment \| Subsequent Event [Member] \| Class A common stock
Subsequent Event [Line Items]
Number of shares issued	4,800
Underwritten public offering \| Subsequent Event [Member] \| Class A common stock
Subsequent Event [Line Items]
Number of shares issued	36,800
Public offering price	$ 52.00
Total offering size	$ 1,914,000
Proceeds from issuance of Class A common stock, net of issuance costs	$ 1,060,000,000
Directly sold by entity \| Subsequent Event [Member] \| Class A common stock
Subsequent Event [Line Items]
Number of shares issued	20,800
Sold by Selling stockholders \| Subsequent Event [Member] \| Class A common stock
Subsequent Event [Line Items]
Number of shares issued	16,000