DraftKings Tremendous Bowl Maintain Strong, Huge iGaming Opps Forward

Posted on: February 27, 2024, 06:41h. 

Final up to date on: February 27, 2024, 06:41h.

Whereas most sportsbook operators have been pinched by the Tremendous Bowl as a result of the underdog Kansas Metropolis Chiefs received outright, DraftKings’ (NASDAQ: DKNG) first-quarter earnings may show sturdy as a result of operator successful on parlays and a few standard proposition wagers.

DraftKings stock
A DraftKings billboard seems at Occasions Sq. in New York Metropolis. An analyst believes the operator did nicely with the Tremendous Bowl and will have large iGaming alternatives forward. (Picture: NASDAQ)

Following a gathering with a number of high-ranking DraftKings executives, together with co-founder and CEO Jason Robins, JPMorgan analyst Joseph Greff stated he got here away “incrementally impressed.” He added that the operator probably notched first rate maintain on the Tremendous Bowl as a result of neither Kanas Chiefs tight finish Travis Kelce nor working again Isaiah Pacheco scored touchdowns within the large recreation, which means loads of DraftKings shoppers that constructed same-game parlays with these props misplaced.

Steady product iteration and expertise competencies are driving larger structural maintain charges, benefiting from elevated adoption of its higher-margin parlay merchandise and different diversified wager sorts which are unlocking elevated engagement and monetization of its buyer base,” noticed Greff.

The analyst added DraftKings’ general Tremendous Bowl maintain was strong even with the Chiefs successful and the operator might have given a clue to that impact by elevating 2024 steerage earlier this month.

DraftKings iGaming Future Vivid

As has been extensively documented, gaming corporations, together with DraftKings, are enthusiastic in regards to the long-term outlook for web casinos, however simply six states at the moment allow that type of wagering.

Greff instructed shoppers that DraftKings is contemplating pitching iGaming in Illinois as an avenue for plugging gaps within the that state’s funds. That’s seen as a possible compromise to Gov. J.B. Pritzker’s (D-IL) lately proposed funds, which pitches elevating the state’s tax on sports activities betting to 35% from 15%.

The JPMorgan analyst added that the DraftKings executives cited bullish income traits within the states that permit web casinos and that the outlook for growth is shiny as a result of some states, together with New York and a few in New England, are grappling with funds constraints and want to search out new sources of income.

The executives additionally mentioned DraftKings’ lately unveiled $750 million money/inventory deal for on-line lottery supplier Jackpocket, telling Greff the agency will initially operate as a standalone entity and later be built-in into the customer’s sports activities betting and iGaming platforms. The acquisition may assist DraftKings growth efforts, together with into Texas the place Jackpocket is already operational, in keeping with the analyst.

Talking of Enlargement…

DraftKings administration instructed Greff they continue to be open to further acquisitions and with a hovering share value and with $1.27 billion in money and money equivalents available on the finish of 2023, the operator has the sources with which to make offers.

The analyst famous that the gaming firm is open to worldwide purchases and whereas particular jurisdictions weren’t talked about, it seems DraftKings is unlikely to buy groceries in Western Europe on account of restricted development alternatives in that area.

Greff identified that given the agency’s sturdy money place, it may contemplate a share repurchase program, however a possible dividend wasn’t talked about.

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