While to the highest degree sportsbook operators were pinched by the Super Bowl because the underdog Sunflower State City Chiefs won outright, DraftKings’ (NASDAQ: DKNG) first-quarter earnings mightiness establish tough due to the manipulator winning on parlays and some popular proposition wagers.
Following a coming together with several high-ranking DraftKings executives, including co-founder and CEO Jason Robins, JPMorgan psychoanalyst Chief Joseph Greff said he came away “incrementally impressed.” He added that the manipulator potential notched nice hold up on the Super Bowl because neither Kanas Chiefs tight death Travis Kelce nor running backwards Isaiah Pacheco scored touchdowns inwards the liberal game, meaning plentifulness of DraftKings clients that reinforced same-game parlays with those props lost.
Continuous mathematical product loop and technology competencies are impulsive higher structural carry rates, benefiting from increased adoption of its higher-margin parlay products and other diversified wager types that are unlocking increased booking and monetization of its customer base,” observed Greff.
The psychoanalyst added DraftKings’ boilersuit Super Bowl hold up was self-coloured even with the Chiefs winning and the operator may have given a clue to that force past nurture 2024 counsel before this month.
DraftKings iGaming Future Bright
As has been widely documented, gaming companies, including DraftKings, are enthusiastic virtually the long-term outlook for internet casinos, but simply half a dozen states currently let that make of wagering.
Greff told clients that DraftKings is considering pitching iGaming inwards Land of Lincoln as an avenue for plugging gaps in the that state’s budget. That’s viewed as a potentiality compromise to Gov. J.B. Pritzker’s (D-IL) latterly proposed budget, which pitches raising the state’s taxation on sports betting to 35% from 15%.
The JPMorgan psychoanalyst added that the DraftKings executives cited bullish revenue trends inward the states that tolerate internet casinos and that the outlook for elaboration is vivid because some states, including New York and some in New England, are grappling with budget constraints and demand to feel young sources of revenue.
The executives also discussed DraftKings’ recently unveiled $750 one thousand thousand cash/stock deal for online drawing provider Jackpocket, apprisal Greff the steady will initially run as a standalone entity and later follow structured into the buyer’s sports betting and iGaming platforms. The acquisition could help DraftKings elaboration efforts, including into TX where Jackpocket is already operational, according to the analyst.
Speaking of Expansion…
DraftKings direction told Greff they remain undetermined to additional acquisitions and with a soaring part price and with $1.27 1000000000000 in cash and hard currency equivalents on helping hand at the ending of 2023, the manipulator has the resources with which to piss deals.
The psychoanalyst noted that the gaming society is open up to international purchases and spell specific jurisdictions weren’t mentioned, it appears DraftKings is unlikely to spell shopping inwards horse opera Europe due to limited development opportunities inward that region.
Greff pointed out that given the firm’s strong hard currency position, it could consider a portion repurchase program, but a potential dividend wasn’t mentioned.
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