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The logo for DraftKings is displayed on a smartphone in an arranged photograph taken in Little Falls, New Jersey, U.S., on Wednesday, Oct. 7, 2020.
Gabby Jones/Bloomberg
The state of New Jersey reported another record month for legal sports betting. That is good news for sports betting company
DraftKings.
The New Jersey Division of Gaming Enforcement said the November sports wagering handle—the amount of money in wagers taken—hit $931.6 million, up from $803.1 million in October. The split once again was in favor of internet sports betting, which totaled $872.1 million of the total handle.
Loop Capital Markets analyst Daniel Adam, who has a Buy rating and $100 price target on
DraftKings
stock (ticker: DKNG), noted the release included an acceleration for iGaming, or online casino games, and sports betting revenue.
“While we caution investors from extrapolating from single data points like this one, NJ’s gross gaming revenue (GGR) data is significant as many investors base their online gaming TAM estimates on the latest GGR per capita numbers reported by the state,” he wrote, referring to the TAM, or a total addressable market.
By applying New Jersey’s gross gaming revenue per capita to the 75% of states that have either legalized sports betting or have introduced legislation to do so, he argues New Jersey’s data suggests a total addressable market in the U.S. of $36 billion, ahead of even his initial $34 billion TAM and Wall Street’s consensus at roughly $20 billion.
He also notes DraftKings expanded its market share lead by gross gaming revenue, up to 25% from 23.9% in October.
Caesars Entertainment
maintained ground in the top five in market share at 10.9%, even after completing its sale of Bally’s Atlantic City on Nov. 18.
Adam argued the data reinforces his view that DraftKings, “should emerge the clear share leader in the U.S.,” as well as his belief that
Caesars Entertainment
‘s (CZR) “extensive market access rights and pending acquisition of
William Hill
position the company well to capitalize on the rapidly growing domestic sports betting and iGaming opportunities.”
DraftKings stock was up 1% to $50.58 on Monday, while Caesars stock was up 2.7% to $71.81. The S&P 500 index was down 0.4%.
Write to Connor Smith at connor.smith@barrons.com