The NFL season kicks off Thursday night, not only to herald the return of America’s favorite sport, but also the start of the most important annual expansion for gambling companies to look out for. Sports bettors.
According to Macquarie Research, about $1 billion is bet every week during the NFL season, with the fourth quarter accounting for about 35% of gambling companies’ annual revenue. Wall Street analysts will be watching closely this fall to see which one sports book He reigns in handling the lion’s share of bets in the newly discovered gambling sector.
Vandel The space currently leads the way with a 51% market share in the countries in which it operates. However, the question looming as we enter the new football season centers on how FanDuel retains its customers while competitors such as DraftKings (DKNG), Caesars Entertainment (CZR), BetMGM (MGM) and Penn Entertainment (the pen) Try to attract new users.
There will also be a focus on original content with FanDuel Launching its own 24/7 sports network and ben End its purchase of Barstoll Sports. While analysts will be watching closely to see who brings in the most customers, there will also be interest in how much is being spent acquiring those customers as nearly all sportsbooks haven’t posted a positive quarterly profit since launch.
We expect healthy year-over-year growth for each company and the highest quarterly focus on that [fourth] quarter,” Macquarie analyst Chad Bennon told Yahoo Finance. “Given lower losses in the second quarter, we estimate that with additional revenue in the fourth quarter and lower operating costs, most companies will have their best quarter of the year during the fourth quarter.”
In other words, street analysts expect gambling companies to spend less on customer acquisition during this year’s NFL season, but increase revenue as many gambling markets mature.
The American Gaming Association (AGA) agreed, predicting that 46.6 million Americans will bet on the NFL this year, up about 3% from last year. About half of these bets are expected to be placed on the legal market, which is 18% larger than it was in 2021, the AGA told Yahoo Finance.
Sports betting Currently legal It operates in 31 states and Washington, DC. The mobile market, which is the biggest driver of revenue for companies like FanDuel and DraftKings, operates in 21 states and Washington, D.C.
“We continue to expect that the modern states will experience a massive acceleration at the start of the NFL season,” Bennon recently wrote in a note to clients.
“Free money will vanish
Several gambling executives boasted of their company’s low losses in the last quarter due to lower marketing spending.
MGM CEO Bill Hornbuckle said on his company’s earnings call that MGM is “getting smarter and smarter” and will continue to “reduce” marketing spending.
Jason Robbins, CEO of DraftKings Yahoo Finance That New York tax of 51% is the reason the company “slid a little bit.”
Jordan Bender, senior equity research analyst at JMP Securities that covers the gambling sector, has included lackluster marketing spending in his estimates for the coming quarters. In a recent note to customers, Bender wrote that “the free money is going away,” referring to the extravagant promotions that many sports bets boast to new users before the first week.
“Given the new countries, we expect upgrades [as a % of gross gaming revenue] High in September, but will move through the season at lower levels than the previous year, due to the trend of faster adoption rates from newly launched states and operators not chasing unprofitable customers.”
Josh is a reporter and producer at Yahoo Finance.