Sports activities betting corporations are set to attain huge at this weekend’s Tremendous Bowl, with DraftKings and FanDuel main the frenzy, Financial institution of America stated in a Friday notice.
Sunday’s recreation will see the Kansas Metropolis Chiefs play in opposition to the San Francisco 49ers, paving the way in which for blowout betting exercise. Based on the notice, an anticipated $1.5 billion might be waged, marking a 35% acquire from final 12 months’s file quantity.
DraftKings and FanDuel stand to profit essentially the most from this weekend of massive betting, BofA fairness strategists led by Shaun Kelley wrote. The 2 corporations make up the largest slice of the sports activities betting business, collectively accounting for about 70% of the market within the third quarter of 2023.
“The sportsbooks could also be cheering on the 49ers given 71% of the cash is on the Chiefs however we predict elevated similar recreation parlay choices and prop bets will assist assist win charges,” Kelley stated.
Sports activities betting business 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 season tour has already highlighted how her look is usually a substantial monetary tailwind to quite a few industries. For example, income per accessible lodge room jumped 31% on common in cities she toured by.
“Sports activities books are leaning in and providing Taylor Swift themed prop bets, largely associated to Travis Kelce’s efficiency,” Kelley stated, referring to the Kansas Metropolis Chiefs participant courting Swift.
Some examples of those proposition bets — wagers not tied to the sport’s end result — embrace DraftKings’ “the way you get the woman,” the place Kelce scores a landing in every half. In the meantime, FanDuel is providing a wager that Kelce might suggest on the sector.
As of Friday afternoon, DraftKings’ inventory value stood at $43.67. The quickly increasing reputation of sports activities betting in 2023 helped the agency soar 185% over the past 12 months. Whereas FanDuel is not publicly traded, its dad or mum 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 docket choice legalized it in 2018. Based on Goldman Sachs, it is solely within the middle-innings of its growth, with solely half of US states having accredited cellular sports activities betting.
“We count on development to be pushed by a mixture of recent state openings and the next share of the buyer pockets being spent on sports activities betting over time,” Head of Leisure and Journey Analysis Ben Andrews wrote in a Wednesday notice.
He estimates that American spending on wagers will finally attain $45 billion per 12 months.
The business’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 soar in “bad-odd bets,” that do not wager on clear outcomes.
“The factor that we underestimated — that I believe goes to be a profit for all these corporations for some time anyway — is what unhealthy bettors the US gamblers are,” he stated in December.
