Chanos Sees Opportunity in Sports Betting Equities
Posted on: December 18, 2023, 03:00h.
Last updated on: December 17, 2023, 08:20h.
Recently, Jim Chanos, a well-known short seller, has become optimistic about sports betting equities, identifying an opportunity in the US market’s fondness for exotic wagers.
Famously, Chanos was bearish on DraftKings (NASDAQ: DKNG), however, he has since had a change of heart, attributing the company’s success to its long-odds wagers, including in-game bets and same-game parlays that appeal to US bettors.
Exotic Wagers the Key to Success
Chanos observed that DraftKings and its competitors, such as BetMGM and FanDuel, have capitalized on the fondness of US bettors for long-odds wagers. In particular, in-game betting and same-game parlays have provided a significant boost to the operators’ margins.
He noted that in-game bets and same-game parlays do not necessarily favor the bettors, but they have provided operators like DraftKings with new revenue opportunities.
According to Chanos, while live wagering currently accounts for just a quarter of the US betting market, there is significant potential for growth given the high usage in other, more mature betting markets, such as Europe and the UK.
Chanos Sees Opportunity, But Remains Cautious
It is unclear which specific gaming equities Chanos is optimistic about. DraftKings is the largest pure-play operator in the US, but the upcoming listing of FanDuel parent Flutter Entertainment (OTC:PDYPY) on the NYSE suggests that there could be some surprises waiting for investors.