DraftKings Emerging As A Leader In $35B North American Online Betting Market, Analyst Says

Needham analyst Bernie McTernan reiterated DraftKings Inc DKNG with a Buy and a $60 price target.

The analyst noted DKNG as a leader in the emerging North American online gambling market, which is a $35 billion market opportunity.

McTernan said the legislative environment overall supports greater market access, which is a win-win for consumers and states.

Also Read: DraftKings Q1 Earnings Highlights: Sportsbook Posts Revenue Beat, EPS Beat, Raises Revenue, EBITDA Guidance

He noted an upside to his bull case industry total addressable market of $50 billion, which he said is more likely to play out than his bear case of only $18 billion.

As per McTernan, DraftKings has a sustainable customer acquisition strategy that should continue to drive its first—or second-place position in all states.

He expects margins to scale from tech stack ownership, national vs. local marketing benefits, and reaching terminal market access penetration.

McTernan’s math suggests a more significant tax revenue opportunity for states to legalize iGaming instead of increasing the OSB tax rate.

In the bear case scenario, he noted DraftKings and other operators have levers to offset a significant portion of higher OSB tax revenue, while in the bull case, he still noted a compelling case of iGaming legislation.

Price Action: DKNG shares traded higher by 1.06% at $38.65 at the last check on Wednesday.

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