- Online betting stocks have been on torrid paces of late
- Analysts sees DraftKings, data providers as top picks
Online betting stocks, both of the business-to-business and consumer-facing varieties, have been ripping higher of late, and at least one analyst expects that momentum will continue in the back half of 2025.
In a new report to clients, Macquarie analyst Chad Beynon said online betting names are finishing the second quarter on a strong note, buoyed by solid June hold data. He notes record hold rates in some of the largest sports betting states is supportive of gains for consumer-facing internet sports betting equities, including DraftKings (NASDAQ: DKNG), FanDuel owner Flutter Entertainment (NYSE: FLUT), and Rush Street Interactive (NYSE: RSI).
Beynon added that betting volumes are accelerating on a sequential basis with second-quarter turnover poised to grow by 15% following the 11% jump notched in the first three months of the year. Despite no movement in terms of iGaming expansion, internet casino growth continues topping expectations with Beynon forecasting 30% year-over-year growth for the June quarter.
He has “outperform” ratings on DraftKings, Flutter, and Rush Street Interactive, the first two of which are the biggest online sportsbook operators and leaders in the iGaming space.
Online Betting Stocks Beating Back Challenges
Shares of DraftKings and Flutter are higher by 21.17% and 12.39%, respectively, over the past month — impressive feats when considering that timeframe included Illinois passing its second sports betting tax increase in a year.
Under the new tax hike, operators in the state will pay a levy of 25 cents per wager on the first 20 million bets booked with that fee doubling to 50 cents thereafter. Making the recent bullishness displayed by DraftKings and Flutter all the more impressive is that those gains followed both companies announcing they’d charge transaction fees of 50 cents per bet in Illinois effective September 1. Those moves were skewered by bettors and industry observers, but investors clearly weren’t perturbed.
Despite tax headwinds, we think the outlook for 2025 gross gaming revenue (GGR) has gotten better in recent months, driven by 1) strong 2Q25 OSB hold rates; 2) an acceleration in online sports betting handle growth; and 3) better-than-expected iGaming growth rates,” wrote Beynon. “We now forecast 2025E Online GGR growth of 25% YoY (vs+20% prior).”
The analyst adds that more state legalizations will expand the total addressable markets for iGaming and sports betting, potentially prompting bullish revisions to investor expectations. California and Texas remain the “golden geese” in the yet-to-be-legal sports betting realm, and near-term prospects for approval in those states are murky.
Data Providers Leading Online Betting Stock Gains
As has been widely documented, data providers Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD), both of which Beynon rates “outperform,” are among this year’s best-performing betting equities as highlighted by an average 2025 gain of more than 33%.
The Macquarie analyst said the two are “lower-volatility ways to play global sports betting with strong upside from the shift toward in-play betting in the US.”
Other analysts have touted the data providers’ ties to artificial intelligence (AI) and their growth profiles, which are more in line with the software industry than gaming. However, neither Genius nor Sportradar sport the lofty earnings multiples often associated with software stocks, indicating the names aren’t a stretch on valuation.
The post Online Betting Stocks Can Extend Momentum Says Analyst appeared first on Casino.org.
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