05

November, 2021

Okay, Sports Betting, What’s Next?

Share on facebook
Share on twitter
Share on linkedin

Summary:

Okay, Sports Betting, What's Next?

This week, 2 major players in the sports betting game posted Q3 earnings that underwhelmed investors.

Bottom line: neither company is feeling an outpouring of love from the market right now.

But LikeFolio data suggests there’s still gas in the tank here.
 
1. A growing consumer trend is propelling both companies: Sports Betting.
While these mentions typically tick up to a peak during the Super Bowl, they are already outpacing levels recorded last year by +9%.
 
Even though the federal ban on Sports Betting was struck down in 2018, legalization is now unrolling on a state-by-state level. And perhaps a bit slower than expected.
 
Mobile and online sports betting are only legal in 19 states right now. This means tremendous growth potential is still palpable, with millions of would-be users waiting for the green light by their legislatures.
 
2. DraftKings and Barstool Sportsbook (PENN minority-owned) continue to exhibit growing consumer demand.

Consumer mentions of downloading and using the DraftKings platform to wager on sporting events has increased +10% YoY.

Albeit, slower growth vs. last year’s rate, but still powering through all-time highs. This slow-down is what informed our bearish near-term stance on DKNG on our weekly earnings sheet. We saw promising revenue growth but were concerned about near-term profitability. Bullseye.
 
Long-term, we still like this name, especially as it shows signs of continued market share capture vs. peer FanDuel.
 
Penn National Mentions are a little more tricky. The company operates a mix of traditional casinos and racetracks but also holds a minority stake in Barstool Sportsbook.
 
Barstool Sportsbook usage mentions have increased +44% YoY.
PENN noted that the Barstool Sportsbook brick-and-mortar concepts are stimulating growth and attracting a younger audience: “our retail Barstool Sportsbook concepts are continuing to stimulate database growth and increase the frequency of visitation in the younger segments while also boosting gaming and food and beverage spend.

Stay ahead of wallstreet, take a tour/buy now.

Get a demo at your own pace and see the power of LikeFolio data & insights for yourself.  Let’s do this!

Sign Up For Our Daily Insights

Fill in your name & email to download your complimentary report.