Date: January 8, 2025, 02:39h.
Last updated on: January 8, 2025, 02:39h.
DraftKings (NASDAQ: DKNG) may be experiencing similar challenges as Flutter Entertainment (NYSE: FLUT), which recently warned investors about lower fourth-quarter and 2024 earnings and revenue due to favorable customer outcomes in NFL games.
Following Flutter’s financial warning on Monday, DraftKings saw some fluctuations in its stock price. Bank of America analyst Shaun Kelley highlighted that NFL results impacting Flutter could also affect DraftKings.
This season, NFL favorites are winning at a significant rate, which is good news for bettors but challenging for operators like DraftKings. Kelley estimated that DraftKings could see a decrease in fourth-quarter EBITDA of $60 million to $80 million due to the frequency of favored teams winning.
Kelley mentioned that DraftKings’ EBITDA challenges are less severe than expected and lower than Flutter on a proportional basis.
DraftKings’ Q4 Performance Compared to FanDuel
DraftKings and FanDuel, owned by Flutter, are prominent names in sports betting. Bank of America’s Kelley suggested that DraftKings may have had some favorable outcomes compared to FanDuel in the last quarter of the year.
Reasons for DraftKings’ performance include sponsorship highlights such as the Tyson-Paul fight and parlay wins that benefited the company in November and December, respectively.
The high success rate of NFL favorites this season poses risks for sportsbook operators, including DraftKings.
Flutter’s Position
Despite challenges, the unusually high success rate of NFL favorites and recreational bettors’ tendencies indicate potential gains as the season progresses.
Analysts like Morningstar’s Dan Wasiolek see Flutter benefiting from favorable sports betting outcomes and view any share weakness as a buying opportunity for investors.