The NFL season could potentially boost betting stocks, albeit temporarily.
The 2023 NFL season will kick off on a Thursday with the Detroit Lions going up against the Kansas City Chiefs, who are the defending Super Bowl champions. Along with this, college football is entering its second full week of action, which may possibly lead to beneficial seasonality for certain betting stocks.
FanDuel's parent company, Flutter Entertainment (OTC: PDYPY), and DraftKings (NASDAQ: DKNG) - the two biggest online sportsbook operators in the US - are prime examples of this potential favoritism towards betting stocks. As football is the most frequently wagered upon sport in America, it is likely that there can be noticeable advantages that come with specific seasons for these companies. However, some experts suggest that these benefits may not last all that long.
Historically, online gaming stocks have known to rise leading up to the beginning of the NFL season; while not as notable afterwards. A recent report by Bank of America pointed this out and emphasized on the possibility of the NFL-inspired gains for sports betting equities being more enduring than anticipated. The upcoming months are packed with various sports events, including the start of both the NBA and NHL seasons in October, and college basketball in November.
In addition, the inclusion of Kentucky in the list of live and legal mobile sports betting states is a bonus for these operators.
Sports Betting Stocks with an edge: Flutter, DraftKings
A recent survey by Jefferies seems to support this theory; highlighting that a sizeable 44% of participants had placed a sports bet within the past year - an increase from 37% at the start of 2023. Out of these, FanDuel and DraftKings - who together own around 75% of the American online sports betting market - are capable beneficiaries.
Jefferies also noted that bettors have increasingly loitered around their current accounts with 89% saying they are likely or very likely to continue wagering with their existing accounts, compared to 83% in January. Furthermore, bettors holding multiple sportsbook accounts decreased to 39% from 37% prior.
Jefferies positioned Flutter and DraftKings as their top two investment options. Flutter, a company from Dublin, is anticipated to transfer its shares to New York by the close of this year.
Other Positive Views on Betting Stocks
Analyst Bernie McTernan from Needham is optimistic about DraftKings and sports wagering data provider Genius Sports (NYSE: GENI). He highlighted that DraftKings' upcoming Investor Day could be a game changer for its shares as it essentially serves as a platform for the company to showcase its growth strategy in addition to its commitment towards profitability.
In the case of Genius, the perception is that its stock could reap benefits from the growing trend of in-game wagers over pregame betting, as more bettors seem to sway towards this type of wagering. The company works with numerous sportsbook operators and several major sports leagues, including the NFL.
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