DraftKings Spent $700K on Private Jet Travel for CEO Robins in 2023

DraftKings (NASDAQ: DKNG) allocated $700K last year for private air travel for cofounder and CEO Jason Robins. 

This detail was disclosed in the company's annual report, released Thursday alongside the operator's fourth-quarter earnings announcement. In its submission to the Securities and Exchange Commission (SEC), DraftKings stated that beginning in 2022, it leased, “without markup,” a private jet owned by the CEO “for the business and personal travel of Mr. Robins and his family.”

"The Company had no direct or indirect interest in such private plane. During 2023 and 2022, the Company incurred no expenses and $0.7 million of expense, respectively, for use of the aircraft under these chartering services,” according to the regulatory document.

On March 30, 2022, DraftKings signed a lease agreement with a company managed by Robins, where the aircraft was leased to the gaming firm for $600K for a duration of one year. According to its conditions, the lease ended, and a new agreement for the same sum was created. 

 

DraftKings Board Approved 

The audit and compensation committees of DraftKings’ board of directors authorized the air travel and aircraft leasing agreement, referencing the comprehensive security program offered to Robins and his family. Those committees assert that private jet travel “is more effective and adaptable and better guarantees safety, confidentiality, and privacy.” 

The expenses for the private jet that DraftKings faced last year are significantly lower than those handled by the operator in 2022. Two years prior, the online sportsbook operator allocated almost $969K on security for Robins and his family, in addition to $131,607 in reimbursements for “the acquisition of game day tickets, special events, travel, and lodging for Mr. Robins’ family during the week’s events” associated with the 2022 Super Bowl. 

DraftKings’ 2023 annual report does not specify the overall security costs for Robins and his family, nor does it reference expenses related to the Super Bowl. However, the chief executive officer was in Las Vegas last week, as per his X feed. 

It is important to highlight that DraftKings' corporate jet costs are relatively moderate when compared to those of S&P 500 companies. Regarding expenditures on private jets within the gaming industry, Las Vegas Sands (NYSE: LVS) topped the list in 2022 with $3.2 million, coming in second to Facebook’s parent company, Meta Platforms (NASDAQ: META). 

 

DraftKings' Remuneration Committee 

The compensation committee of DraftKings is headed by venture capitalist Ryan Moore, while Jocelyn Moore and Steven Moore serve as the additional members. The charter of that committee specifies that the group's responsibilities consist of creating and authorizing options grants along with other allocations of DraftKings equity to Robins and other top executives. 

Certain executives, such as Robins, often sell DraftKings stock; however, this selling has not stopped the shares from rising 26.13% this year and 167.83% in the last 12 months. 

There’s little that outsiders can influence regarding insider selling or the compensation of DraftKings executives. In the SEC filing, the company specifically mentions that Robins holds all of the operator's Class B stock, which each share carries 10 votes. The Class A shares offered to the investing public carry only a single vote each. 

“Mr. Robins may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing, or deterring a change in control of DraftKings, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of DraftKings, and might ultimately affect the market price of shares of our Class A common stock,” according to the annual report.