DraftKings’ Q1 Boosted by Super Bowl Parlays, Prop Bets, Says Analyst
Most sportsbook operators were pinched past the Super Bowl because the underdog Sunflower State City Chiefs won outright. But DraftKings’ (NASDAQ: DKNG) first-quarter earnings mightiness turn out sturdy due to the manipulator winning on parlays and some pop proposition wagers.
Following a group meeting with several high-ranking DraftKings executives, including cofounder and CEO Jason Robins, JPMorgan psychoanalyst Chief Joseph Greff said he came aside “incrementally impressed.” Greff added that the operator likely notched nice hold on the Super Bowl because neither Kansas River Chiefs tight end Travis Kelce nor running backwards Isaiah Pacheco scored touchdowns inwards the magnanimous game. That substance plenitude of DraftKings clients lost who reinforced same-game parlays with those props.
Continuous mathematical product iteration and technology competencies are driving higher structural carry rates, benefiting from increased espousal of its higher-margin parlay products and other diversified bet types that are unlocking increased booking and monetization of its client base,” observed Greff.
Greff added that DraftKings’ boilersuit Super Bowl support was solid, even out with the Chiefs winning. and the manipulator may feature precondition a clue to that burden past nurture 2024 counselling earlier this month.
DraftKings’ iGaming Future Bright
As has been widely documented, gaming companies, including DraftKings, are enthusiastic near the long-term outlook for internet casinos. But just now six states currently Trachinotus falcatus that word form of wagering.
Greff told clients that DraftKings is considering pitching iGaming inwards Prairie State as an avenue for plugging gaps inwards that state’s budget. That’s viewed as a potentiality compromise to Gov. J.B. Pritzker’s (D-IL) late proposed budget, which pitches raising the state’s taxation on sports betting to 35% from 15%.
Greff added that the DraftKings executives cited bullish revenue trends inwards the states that take into account cyberspace casinos, and that the outlook for elaboration is brilliant because some states. That includes New House of York and some cities inward New England grappling with budget constraints and have a demand to find unexampled sources of revenue.
The executives also discussed DraftKings’ recently unveiled $750 trillion cash/stock deal for online drawing provider Jackpocket. That told Greff the firmly will ab initio work as a standalone entity, and later be integrated into the buyer’s sports betting and iGaming platforms. The acquisition could help DraftKings’ expansion efforts, including into Texas, where Jackpocket is already operational, according to the analyst.
Speaking of Expansion …
DraftKings direction told Greff they remain opened to additional acquisitions. With a soaring apportion price, along with $1.27 billion inwards cash in and hard currency equivalents on paw at the remainder of 2023, the operator has the resources with which to pass water deals.
Greff noted that the gaming fellowship is unresolved to international purchases. While specific jurisdictions weren’t mentioned, it appears DraftKings is unlikely to go game shopping in Western Europe because of special ontogeny opportunities inward that region.
Greff pointed come out that granted the firm’s warm cash in position, it could weigh a portion out repurchase program. But a potential dividend wasn’t mentioned.
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