DraftKings Gains Sports Betting Share Since Start of NFL Season
Posted on: October 17, 2023, 02:23h.
Last updated on: October 18, 2023, 09:36h.
Week six of the 2023 NFL season is in the books, and with a record number of states permitting regulated sports wagering, it’s not surprising that the handle is on the rise. Data also indicate that DraftKings (NASDAQ: DKNG) has added market share since the start of the football season.
In a new report to clients, Stifel analyst Jeffrey Stantial observed that the US sports wagering handle “accelerated nicely” into football season and, as expected, DraftKings is the biggest winner regarding market share gained. FanDuel, a unit of Flutter Entertainment (OTC: PDYPY), and DraftKings are the top two operators in US sports wagering share, accounting for more than 70% of the market.
We reiterate our Hold-rating on DKNG for now as while recent market share momentum and product execution is highly encouraging, we believe forthcoming competitive product launches/improvements could present a better entry point,” Stantial wrote.
Shares of Boston-based DraftKings are higher by 166.77% year to date, making it one of 2023’s best-performing gaming equities.
Online Sports Betting Competition Remains Fierce
If there’s one thing the US sports wagering industry is known for, it’s competition. Over the past several years, the duopoly established by FanDuel and DraftKings has claimed several victims, including operators who threw in the towel and others who opted to sell themselves.
DraftKings has built an enviable moat that’s allowed it to ward off a viable competitor in Caesars Sportsbook. That status is all the more important at a time when Fanatics and Penn Entertainment (NASDAQ: PENN) with ESPN Bet are looking to challenge the FanDuel/DraftKings duopoly.
Stantial pointed out that Fanatics is off to a solid start, but that’s mostly attributable to heavy promotional spending, a tactic that can threaten profitability. Penn’s ESPN Bet is slated to debut in November.
“While too early to discount either potential disruptor, we believe mostly stable share for DraftKings/FanDuel in a battleground state with high spending disruptors is notable, especially as the market continues to grapple with the upcoming ESPN Bet launch,” added the analyst. “We look to forthcoming October Kentucky data and initial North Carolina results in 2024 as even better measuring sticks for market share normalized for first mover advantage.”
DraftKings Sports iGaming Success, Too
While iGaming is live and legal in just six states, far fewer than the 35 permitting sports betting, analysts and operators remain enthusiastic about the long-term growth trajectory for online casinos.
Currently, Michigan is the only state that releases operator-level data. There, it appears that DraftKings and FanDuel are grabbing market share from BetMGM. Stantial noted Caesars Entertainment (NASDAQ: CZR) is another name that could boost iGaming market share going forward.
“Looking forward, we continue to monitor Caesars as a potential share winner given the launch of a standalone iCasino app and other improvements to product and omnichannel marketing execution,” concluded the analyst.
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