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DRAFTKINGS INC.

(DKNG)
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The NFL is Back and Sports Bettors Are Following

09/14/2020 | 04:01pm EDT

By Katherine Sayre

Sports betting in the U.S. is surging with the return of the National Football League and other major professional sports, and gambling operators are vying for fans' attention.

Sports betting has been on the rise as more states legalize the industry, and the recent return of the biggest sports leagues has helped satisfy demand that built up during Covid-19 shutdowns.

In New Jersey, the biggest market for sports betting outside Nevada, total sports-wagering revenue in August rose nearly 57% compared with last year, to $39.5 million, according to numbers released Monday. From January through August, revenue totaled about $178 million, up 16.5% versus 2019, despite the several-month sports hiatus earlier in the year. In April, when virtually all major sports were canceled and casinos shut down, sports-betting revenue plummeted to $2.6 million, an 88% drop from the previous year.

This autumn marks the third NFL season since a 2018 U.S. Supreme Court ruling paved the way for states outside Nevada to allow sports betting. Twenty-two states and the District of Columbia now have legalized sports wagering. Sports books got a boost this past weekend as leagues staging games or matches included the NFL, Major League Baseball, the National Basketball Association, the National Hockey League and the U.S. Tennis Association.

"In a word, it was monstrous," said Johnny Aitken, chief executive of mobile sports-betting app PointsBet USA, referring to last weekend's betting activity. "Since Covid[-19] and the pausing of headline U.S. sports, there was this momentous pent-up demand."

About 13% of American adults, or 33 million people, plan to gamble on the NFL this year, down from about 38 million people the previous year, according to surveys by the American Gaming Association, a gambling-industry trade group. About half of those bettors said they would wager casually among family, friends and co-workers. About one-third said they planned to bet online, either legally or illegally, and 20% said they would place bets at a retail sportsbook.

With U.S. sports closed down this past spring, dedicated bettors threw down money on the few options available, such as Russian table tennis and Belarusian soccer.

The sports-betting industry's performance for the remainder of the year depends on how well the biggest sports can stave off and manage Covid-19 infections among players and staff, which could derail seasons. Before the pandemic, the U.S. sports betting market was expected to bring in $1.6 billion in gross revenue this year. That figure will likely shrink to $650 million to $950 million, depending on whether college football and Major League Baseball proceed as planned, according to a report by Eilers & Krejcik Gaming.

Meanwhile, competition for bettors is fierce. Casino operators and big online brands such as FanDuel Group, owned by Flutter Entertainment PLC, and DraftKings Inc. are spending huge sums to acquire U.S. customers and expand beyond hard-core bettors this year.

On Monday, Walt Disney Co.'s ESPN said it struck a deal with DraftKings and Caesars Entertainment Inc. to connect viewers to the gambling operators' sportsbooks across the network's digital platforms. The sportsbook of Caesars is operated by William Hill US. ESPN declined to say how much the deal is worth.

Companies are offering free-to-play games and other promotions to reach new customers. DraftKings said this month that Michael Jordan, the NBA legend and avid gambler, joined the company as a special adviser to the board. Mr. Jordan is taking an equity interest in DraftKings in exchange for strategic advice, the company said.

--Benjamin Mullin contributed to this article.

Write to Katherine Sayre at katherine.sayre@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
CAESARS ENTERTAINMENT, INC. -0.98% 110.31 Delayed Quote.48.53%
DRAFTKINGS INC. -0.95% 53.14 Delayed Quote.14.13%
FLUTTER ENTERTAINMENT PLC 1.06% 162.2 Real-time Quote.-2.82%
POINTSBET HOLDINGS LIMITED 1.63% 13.72 End-of-day quote.15.59%
REACH NEW HOLDINGS LIMITED -15.49% 0.6 End-of-day quote.140.00%
WALT DISNEY COMPANY (THE) 0.46% 177.38 Delayed Quote.-2.10%
WILLIAM HILL 0.00% 271.8 End-of-day quote.0.63%
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Financials (USD)
Sales 2021 1 170 M - -
Net income 2021 -1 212 M - -
Net cash 2021 1 469 M - -
P/E ratio 2021 -18,9x
Yield 2021 -
Capitalization 21 343 M 21 343 M -
EV / Sales 2021 17,0x
EV / Sales 2022 12,5x
Nbr of Employees 2 600
Free-Float 45,7%
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DraftKings Inc. Technical Analysis Chart | MarketScreener
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Technical analysis trends DRAFTKINGS INC.
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TrendsNeutralBearishNeutral
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 68,85 $
Last Close Price 53,14 $
Spread / Highest target 97,6%
Spread / Average Target 29,6%
Spread / Lowest Target -20,0%
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Managers and Directors
NameTitle
Jason D. Robins Chairman & Chief Executive Officer
Jason K. Park Chief Financial Officer
Paul Liberman Director, President-Global Technology & Product
Travis Dunn Chief Technology Officer
Jennifer Aguiar Chief Compliance Officer
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1st jan.Capitalization (M$)
DRAFTKINGS INC.14.13%21 343
EVOLUTION AB88.07%40 047
SANDS CHINA LTD.-0.29%35 406
GALAXY ENTERTAINMENT GROUP LIMITED3.65%35 007
FLUTTER ENTERTAINMENT PLC-2.82%34 396
CAESARS ENTERTAINMENT, INC.48.53%23 022