Sports betting corporations are set to attain large at this weekend’s Super Bowl, with DraftKings and FanDuel main the push, Bank of America stated in a Friday be aware.
Sunday’s sport will see the Kansas City Chiefs play towards the San Francisco 49ers, paving the best way for blowout betting exercise. According to the be aware, an anticipated $1.5 billion will probably be waged, marking a 35% achieve from final yr’s document quantity.
DraftKings and FanDuel stand to profit probably the most from this weekend of huge betting, BofA fairness strategists led by Shaun Kelley wrote. The two corporations make up the most important slice of the sports activities betting trade, collectively accounting for about 70% of the market within the third quarter of 2023.
“The sportsbooks may be cheering on the 49ers given 71% of the money is on the Chiefs but we think increased same game parlay offerings and prop bets will help support win rates,” Kelley stated.
Sports betting trade gamers are additionally positioned to profit from the anticipated attendance of Taylor Swift, whose presence could kick betting exercise into the next gear, BofA wrote.
The pop star’s summer time tour has already highlighted how her look generally is a substantial monetary tailwind to quite a few industries. For occasion, income per accessible lodge room jumped 31% on common in cities she toured by way of.
“Sports books are leaning in and offering Taylor Swift themed prop bets, mostly related to Travis Kelce’s performance,” Kelley stated, referring to the Kansas City Chiefs participant relationship Swift.
Some examples of those proposition bets — wagers not tied to the sport’s final result — embody DraftKings’ “how you get the girl,” the place Kelce scores a landing in every half. Meanwhile, FanDuel is providing a wager that Kelce might suggest on the sphere.
As of Friday afternoon, DraftKings’ inventory worth stood at $43.67. The quickly increasing recognition of sports activities betting in 2023 helped the agency bounce 185% during the last 12 months. While FanDuel is not publicly traded, its guardian agency Flutter turned an NYSE-listed firm in late January, and its shares have risen over 35% within the final 12 months.
Commercialized sports activities betting has ballooned right into a $10 billion sector after a Supreme Court resolution legalized it in 2018. According to Goldman Sachs, it is solely within the middle-innings of its enlargement, with solely half of US states having accredited cell sports activities betting.
“We expect growth to be driven by a combination of new state openings and a higher share of the consumer wallet being spent on sports betting over time,” Head of Leisure and Travel Research Ben Andrews wrote in a Wednesday be aware.
He estimates that American spending on wagers will finally attain $45 billion per yr.
The trade’s success has additionally gained it an endorsement from famed short-seller Jim Chanos, who closed his quick place on DraftKings in July 2022, after he witnessed a bounce in “bad-odd bets,” that do not wager on clear outcomes.
“The thing that we underestimated — that I think is going to be a benefit for all these companies for a while anyway — is what bad bettors the US gamblers are,” he stated in December.