Less than 48 hours before the start of March Madness, DraftKings announced a major leadership change on Monday night.

On the eve of the NCAA Tournament, DraftKings announced it will shift CFO Jason Park to a new role as chief transformational officer with the company. Under the newly created position, Park will be expected to “address and capture large efficiency opportunities” within various segments of the company, according to CEO Jason Robins. DraftKings will also elevate Alan Ellingson to chief financial officer, effective May 1.

“I have asked Jason to take on a new role that I expect will generate significant incremental profitability over the coming years,” Robins wrote in a statement. “Jason’s unique skill set, based on his accomplishments over the last five years as our chief financial officer, will allow us to further improve how we operate.”

Park, who holds an MBA in finance from the University of Pennsylvania’s Wharton School of Business, joined DraftKings in June 2019, after spending 10 years at Bain Capital. Headquartered in Boston, the private equity firm was co-founded by former Massachusetts Gov. and Utah Senator Mitt Romney in 1984. The firm also has deep ties in the worlds of professional sports and finance. Boston Celtics co-owner Stephen Pagliuca serves as co-chairman, while New England Patriots owner Robert Kraft was among Bain’s early investors.

Robins has credited Park for using his expertise in private equity to help drive operational efficiencies. Hired by DraftKings weeks after the Supreme Court’s historic PASPA decision, Park oversaw the company’s transition to the public markets. By that December, DraftKings announced plans to go public through a tri-merger with SBTech and Diamond Eagle, a special purpose acquisition company (SPAC). In April 2020, at the height of the COVID-19 pandemic, DraftKings began trading on the Nasdaq Global Select Market as a multi-billion dollar company.

Over that period, DraftKings’ annual revenue grew more than tenfold from $323 million in 2019 to $3.67 billion last year. The company also generated positive Adjusted EBITDA in two quarters in 2023, a year when DraftKings delivered an improvement of $571 million, according to Park. DraftKings defines Adjusted EBITDA as net income (loss) before the impact of interest income or expense (net), income tax provision or benefit, depreciation, and amortization.

— Matt Rybaltowski (@MattRybaltowski) March 18, 2024

Upon the 2020 IPO, Morgan Stanley projected that DraftKings would remain a top-5 player with a 20% online sports betting (OSB) market share. In that regard, DraftKings greatly exceeded expectations. By handle, DraftKings maintained a 39% U.S. market share last September, according to a company presentation. On a revenue basis, DraftKings had a share of 37%, far above its March 2022 targeted range of 20-30%.

Based on its bullish estimate, Morgan Stanley projected that DraftKings could hit $75 a share by 2025 with an EBITDA margin around 34%. While DraftKings’ shares reached an all-time high of $74 in March 2021, they tumbled to the low double digits as inflation rattled global markets. DraftKings has since rebounded from a low of $10 to around $42 a share, resulting in a market capitalization of around $19.8 billion.

Last month, DraftKings provided full-year guidance for 2024 on its first earnings call of the year. The company projects revenue in the range of $4.5 billion and $4.8 billion, along with positive Adjusted EBITDA between $350 million and $450 million. Going back to 2020, Craig-Hallum analyst Ryan Sigdahl predicted that DraftKings could attain $4 billion in annual net revenue and $1 billion in EBITDA in less than 10 years.

Still, there are skeptics on the company’s plans to rein in promotional spending. On a quarterly call last August, Deutsche Bank analyst Carlo Santarelli pressed Robins on several long-range projections the company released 17 months earlier. At the time, DraftKings set a target of reducing promotional allowances to about 22% of the company’s gross revenue. Among its vintage states, DraftKings indicated in a presentation last November that promotional reinvestment waned, as the individual markets mature. In a letter to shareholders last month, Park noted that the company’s reinvestment rates for promos improved in the final quarter of 2023, as DraftKings “deployed more surgical promotional tactics.”

Others have questioned DraftKings’ decisions to offer stock buybacks when the company has yet to deliver a full year of profitability. At the same time, some analysts have taken exception with the company’s stock-based compensation for its executive team in comparison with its peers. Park reportedly disposed of more than 60% of his DraftKings holdings in November for a total of $9.2 million.

— Blackmrprophet74, CPA (@Blackmrphophet) February 16, 2024

The leadership change comes as DraftKings is considering shifting its focus to shareholder returns, JMP Securities analyst Jordan Bender wrote in a research note. As with other industry heavyweights, DraftKings has concentrated on emerging from the red in recent quarters. JMP believes Park will leverage his private equity background to enhance profitability in the next few years. Analysts at Jeffries indicated that the transition is apt in light of DraftKings’ pending $750 million acquisition of Jackpocket, a courier lottery service.

As artificial intelligence (A.I.) proliferates around the globe, the use of cutting-edge technologies in the sports betting industry has grown at an exponential rate. The application of A.I. in the sports world served as a hot topic at the MIT Sloan Sports Analytics conference this month. Days later, a panel tackled the impact of the technology on gambling compliance at a Seton Hall Law School summit. In November, FanDuel CEO Amy Howe noted that the company is using A.I. and machine learning to proactively shut down risky customer behavior before it becomes troublesome.

Robins, too, appears bullish on the adoption of A.I. across the sports betting industry. Speaking at Morgan Stanley’s Technology, Media and Telecom Conference this month, Robins emphasized that DraftKings has been focused on machine learning for a long time, adding that the companies with the “most robust data” will stand to benefit from the technological innovations. On Monday, Robins explained that there are potentially “transformational A.I. applications on the horizon” that could change the way businesses operate. It is immediately unclear what role Park will undertake from a tech standpoint.

“I am thrilled to take on this new role which tackles several significant opportunities to improve how we operate and taps into my passion for building great and highly efficient companies,” said Park in a statement.

Jason Park to Become Chief Transformation Officer, Alan Ellingson to be Elevated to Chief Financial Officer Alan Ellingson Alan Ellingson, DraftKings’ Senior V…

— Adam Mancino (@AdamoMancino) March 18, 2024

Ellingson, DraftKings’ senior vice president for finance and analytics, joined the company in 2020. For the past four years, he has worked with Park in building the forecasting capabilities that guide DraftKings’ multiyear financial objectives.

“We have built a world-class finance organization, and I look forward to expanding my leadership role with the team,” said Ellingson in the statement. “In addition, I look forward to working closely with Jason Robins to deliver outstanding financial performance and generate incredible shareholder returns.”

DraftKings traded around $43 a share on Tuesday, down fractionally on the session. DraftKings has surged roughly 30% year to date.