The underdog Kansas City Chiefs winning Super Bowl LVIII has resulted in the most bet on domestic sporting event, which was a negative outcome for regulated sportsbooks. However, analysts believe that this one bad day does not dent the long-term outlook for online betting stocks. DraftKings (NASDAQ: DKNG) and FanDuel parent Flutter Entertainment (NYSE: FLUT) are two of the leading companies in the online betting sector, maintaining a duopoly accounting for approximately 70% of the US market. Some analysts view Flutter’s NYSE listing as a potential plus for investors, as it could open up new markets and financing opportunities, while also allowing the company to retain and obtain new talent.
Flutter is now the second-largest gaming company trading on a US exchange behind only Las Vegas Sands (NYSE: LVS). The rivalry between DraftKings and Flutter is a compelling one among online betting stocks, as they are two of the largest pure-play names in the space. DraftKings occupies the number two spot at about 30% of the US sports betting revenue share, while FanDuel holds the number one spot with approximately 40%. Other competitors in the market include BetMGM, Caesars Sportsbook, ESPN Bet, and Bet365.
The legalization of mobile sports wagering in states like Georgia and Missouri could potentially boost online betting stocks, as it is expected to generate substantial tax revenue for state budgets. However, states like California, Texas, and Florida are less likely to put sports wagering before voters in the near term, although the need for revenue may eventually lead to a change in the future.
Overall, analysts believe that the long-term prospects for online betting stocks remain positive, despite the recent setback from the Super Bowl outcome for regulated sportsbooks. The potential for new markets, financing opportunities, and the incentive for states to legalize sports betting for tax revenue are factors that could further drive growth in the sector.