DraftKings Proves Resilient Against New Competitors in US Sports Betting Market
Posted on: December 15, 2023, 06:51h.
Last updated on: December 15, 2023, 09:06h.

The US sports betting landscape is becoming crowded with new competitors, but DraftKings (NASDAQ: DKNG) appears to be holding its ground against these fresh entrants. Despite new rivals entering the market, the company is not experiencing adverse effects.

DraftKings, along with Flutter Entertainment’s FanDuel, currently dominate the US online sports betting market, controlling over 70% of the share. While competitors are aiming to steal some of this market share, the impact on DraftKings has been minimal. Companies such as Fanatics and Penn Entertainment’s ESPN Bet have shown promising starts, but DraftKings has not been heavily impacted by their presence.

According to Stifel analyst Jeffrey Stantial, DraftKings has cited no immediate impact from the launch of ESPN Bet and sees potential for the offering to grow the market.

Stantial, who recently met with executives from DraftKings, rates the stock “hold” with a $40 price target, signaling an upside of 13.1% from the current stock price.

Fanatics and ESPN Bet have been highly anticipated new entrants in the sports betting landscape, with ESPN Bet debuting last month. Despite this, DraftKings and FanDuel continue to have a stronghold in the market due to their resources and experience.

While some operators have scaled back their US sports betting ambitions, DraftKings has proven to be resilient against ESPN Bet in states where the two operators compete against each other. The company has seen little impact on its customer base and spending patterns in these states.

Looking ahead to 2024, DraftKings is expected to benefit from new product offerings such as the Pick6 fantasy game and progressive parlays, as well as gaining more iGaming market share. This could be aided by favorable legislative outcomes next year.

Overall, Stantial remains optimistic about the fundamental outlook for DraftKings. However, he advises caution due to the demanding valuation and potential iCasino market share deconsolidation. Therefore, he reiterates a “hold” rating on the stock, but remains opportunistic on potential pullbacks.

By admin

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