NFL Week 17 Indicate Operators Benefited From OSB Launch In Ohio: Analyst

NFL Week 17 Indicate Operators Benefited From OSB Launch In Ohio: Analyst
  • Needham analyst Bernie McTernan reiterated Buy on DraftKings Inc DKNG with a $20 price target.
  • In McTernan's weekly report during the NFL season, the analyst tracked game results and their potential impact on the coverage and Apple Inc AAPL iOS app rankings for OSB operators in the sports category.
  • Week 17 results of the five largest spreads likely indicate a negative hold for sportsbook operators, with favorites winning in all the five most giant spread games. This continues a difficult stretch for the OSB operators, as, during the last seven weeks in the five most extensive spread matchups per week, the favorite has won 34 of 35 games.
  • In the iOS app rankings, FanDuel held an edge over DKNG for the top spot on average for the fifth straight week. 
  • Elsewhere in the rankings, the OSB apps McTernan track all saw a boost this week. 
  • BetMGM averaged the #7 spot in the iOS app rankings, their first time in the top 10, and Barstool averaged the #12 spot, the first time they've been ranked in the top 15. 
  • The analyst believes the operators benefited from the OSB launch in Ohio on Jan 1.
  • McTernan sees DKNG as a leader in the emerging North American online gambling market, a $35 billion market opportunity. 
  • Within this market, the analyst believes DKNG has a sustainable customer acquisition strategy that should continue to drive its first- or second-place position in all states. 
  • McTernan expects margins to scale with the tech stack transition to SBTech from Kambi, national vs. local marketing benefits, and reaching terminal market access penetration.
  • Also ReadDraftKings Analyst Sees Upside In Stock After NFL Week 16
  • Price Action: DKNG shares traded lower by 2.55% at $11.10 on the last check Tuesday.

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