DraftKings Can Launch Sports Betting Faster Than Competitors, Ark Funds Says In Bullish Take

Ark Funds hosted an investor webinar on Tuesday, and the asset manager's take on the growth of online sports betting was among the topics covered.

Ark On DraftKings: One stock that was recently added to the Ark Funds ETFs is DraftKings Inc DKNG.

“There’s significant supply and demand,” Ark analyst Nicholas Grous said of online gambling.

Demand for sports betting is increased, and there's a push to legalize in several states that are facing budget deficits. 

Fans of sports want to interact with the games and place wagers, and the old narrative of sports betting being taboo is changing.

The technology stack that DraftKings has with its SBTech platform is the big reason for Ark Fund’s bullishness on the stock, Grous said. 

“You need to be ready to launch faster than your competitors,” he said.

DraftKings is integrating its SBTech platform this year, which could also help with the company’s margins, the analyst said. 

The Ark webinar also highlighted DraftKings' partnership deals with major sports leagues as an advantage over competitors. DraftKings is able to market itself as the go-to player in online sports betting and has a well-known brand, Grous said. 

Related Link: 15 Big Ideas In ‘Disruptive Innovation’ According To Cathie Wood’s Ark Fund

Growth In Sports Betting: DraftKings has estimated its market size at over $60 billion for online sports betting and iGaming.

The Ark Funds estimate is for online sports betting to hit $18 billion over the next five years. In 2020, online sports betting was a $1.8-billion market in the U.S.

Ark Funds: The Ark Next Generation Internet ETF ARKW owns over 1.38 million shares of DraftKings worth $82.4 million. The stock represents 1.2% of the assets in ARKW.

The Ark Fintech Innovation ETF ARKF owns 604,500 shares of DraftKings worth $37.6 million. The stock represents 1% of the assets in ARKF.

DKNG Price Action: Shares of DraftKings were up 10.83% at $68.94 at last check Wednesday.