Tilman Fertitta bullish DraftKings, Wynn heading into 2024
Tilman Fertitta controls the growing Golden Nugget casino empire. But he's confident in 2024 on two other gaming stocks.
In an interview with CNBC's Brian Sullivan, Fertitta is bullish on DraftKings (NASDAQ: DKNG ) and Wynn Resorts (NASDAQ: WYNN ) -- two stocks in which he is the largest individual investor one.
I think Wynn is still the leading gaming company in the United States," Fertitta said in the interview."If there is business in Vegas, as always, Wynn is going to do the most business. "
On October 31, 2022, the owner of the Golden Nuggets and Houston Rockets announced that he held 6.1% of Wynn's shares, becoming the second largest individual shareholder of the stock after Elaine Wynn. That sparked speculation that Fertitta could "take over the Wynn entirely" at some point. No such transaction has occurred yet. However, his desire to own a casino resort on the Las Vegas Strip is well documented.
Wynn could be Fertitta’s winner
Fertitta Entertainment, Fertitta itself and another company purchased 6.91 million shares of Wynn stock in October 2022, according to a 2022 Schedule 13G filing with the U.S. Securities and Exchange Commission (SEC).
Depending on the timing of these purchases in October 2022, Fertitta could potentially receive a modest, if unrealized, gain on Wynn stock. The stock closed at $87.21 on October 1, 2022, and is currently priced at $90.42. While this points to the brand's poor price performance over the past year, Fertitta remains optimistic about Wynn's prospects.
"I'm very optimistic about Wynn," Fertitta added. “It’s been in the 80s there the last few months and I expect it’s going to take a big step up soon.”
According to SEC filings, Fertitta has neither increased nor decreased its stake in Wynn.
Fertitta was also very constructive at DraftKings
Fertitta told Sullivan he is the largest individual shareholder of DraftKings equity, although that likely refers to common stock, since co-founder and CEO Jason Robins owns more than 90% of another class of stock with supervoting rights.
Fertitta's position as a major investor in DraftKings came about through the online sportsbook's acquisition of its Golden Nugget Online Gaming (GNOG) -- an all-stock deal worth $1.56 billion that closed in May 2022. The deal paves the way for DraftKings to become one of the market leaders in the domestic iGaming industry as GNOG has established an internet casino presence in key markets such as New Jersey.
He remains bullish on DraftKings even as new competitors like ESPN Bet and Fanatics enter the arena.
"There are really going to be four or five companies that are going to dominate the sports betting industry," Fertitta told Sullivan."What you need to remember about this industry is that it only exists in a handful of states. It's not in California. It's not in Texas. There are a lot of people betting on offshore activities now, when these When big countries gain access to these activities, the profits for these companies will become very, very large.”
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Source: www.casino.org
