FanDuel, DraftKings Are Dominating US Online Sports Betting Market

Bank of America has released its latest U.S. online sports betting and iGaming numbers for the month of August, and the new data suggests Draftkings Inc DKNG and Flutter Entmt ADR PDYPY subsidiary FanDuel are still dominating the nation’s largest online sports betting markets.

What Happened: Bank of America analyst Shaun Kelley reported a total August U.S. digital gross gaming revenue run rate for reporting states of $412 million. That number is up 87% from a year ago but down 7% compared to July.

Kelley said the monthly decline in gaming revenue is not particularly concerning given August is traditionally a down month for sporting events.

“August faced much tougher comps due to the disruption to last year’s sports calendar (August 2020 OSB handle was +113% M/M vs. July ’20), so the sequential performance is more telling,” Kelley wrote in a note.

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Why It’s Important: The top three states for online sports betting gross gaming revenue are currently New Jersey, Pennsylvania and Michigan. Kelley said FanDuel is the clear leader in these three markets with about 40% overall OSB market share. DraftKings is second with about 29% market share. However, DraftKings gained share in all three markets in August, which is good news for investors.

MGM Resorts International MGM was a distant third in OSB market share in New Jersey, Pennsylvania and Michigan at 14%. But the good news for MGM investors is that the company’s BetMGM app is leading in national iGaming market share at 30%, more than double any other app.

In the top three OSB states, Penn National Gaming, Inc PENN and its Barstool Sportsbook app were fourth in August market share at 5.5% followed by Caesars Entertainment Inc CZR at 1.5%.

Benzinga’s Take: Wells Fargo initiated coverage of a dozen gaming stocks just last week and said investors should avoid companies with exposure to the Macau market and focus on companies with exposure to Las Vegas and U.S. digital gambling. Wells Fargo named MGM its top overall gaming stock pick.