Online Betting Stocks Can Extend Momentum Says Analyst
Positive Trends in Online Betting Stocks
Online betting stocks have been experiencing a remarkable rise recently. An analyst predicts that this momentum will persist through the latter half of 2025. With top companies like DraftKings, Flutter Entertainment, and Rush Street Interactive in focus, investors are eager to capitalize on the ongoing growth in this sector.
Market Overview
According to a recent report by Macquarie analyst Chad Beynon, online betting stocks are wrapping up the second quarter on a high note, fueled by strong June holding data. He emphasizes that record holding rates in significant sports betting states support continued growth for leading consumer-facing companies.
Key Companies to Watch
- DraftKings (NASDAQ: DKNG)
- Flutter Entertainment (NYSE: FLUT)
- Rush Street Interactive (NYSE: RSI)
Notable Growth Figures
Beynon indicates that betting volumes are on the rise, with second-quarter turnover anticipated to grow by 15%, following an 11% increase in the first quarter. Despite no advancements in iGaming expansion, online casino growth is expected to surpass expectations with an impressive forecast of 30% year-over-year growth for the June quarter.
Recent Market Challenges and Responses
In light of recently imposed tax hikes in Illinois, shares of DraftKings and Flutter have surged by 21.17% and 12.39%, respectively, showcasing resilience against market challenges. Under the new tax structure, operators must pay 25 cents per wager for the first 20 million bets, with a subsequent increase to 50 cents thereafter. The ability of these companies to maintain bullish performance despite additional fees reflects investor confidence.
Future Prospects for Online Betting
Beynon is optimistic about the gross gaming revenue (GGR) outlook for 2025, predicting a 25% year-over-year growth compared to the previous estimate of 20%. This optimistic forecast is driven by three main factors:
- Strong second-quarter OSB hold rates
- Accelerated online sports betting handle growth
- Better-than-expected iGaming growth rates
Furthermore, Beynon anticipates that ongoing state legalizations will broaden the market for iGaming and sports betting, further boosting investor confidence.
Emerging Data Providers
Data providers like Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD) are also shining stars in the betting industry, with average gains exceeding 33% thus far in 2025. Beynon rates both companies as “outperform,” recognizing their lower volatility and potential for growth driven by the shift toward in-play betting in the U.S.
Conclusion
The online betting sector is poised for significant expansion, driven by robust consumer interest and strategic company performance. With ongoing advancements and legalizations, the opportunity for growth in 2025 and beyond appears promising.
Summary
In summary, online betting stocks are projected to maintain their upward momentum as driven by strong fundamentals and rising betting volumes. Investors should keep a keen eye on the performance of key players and market developments as the landscape evolves in the coming months.