DraftKings Expected to Share FanDuel's Q4 NFL Betting Setback, Analyst Reports

DraftKings Expected to Share FanDuel's Q4 NFL Betting Setback, Analyst Reports

By Marcus Bennett

January 8, 2025 at 10:14 PM

DraftKings faces potential Q4 earnings impact from NFL betting outcomes, similar to Flutter Entertainment's recent financial warning. Bank of America analyst Shaun Kelley estimates a $60-80 million reduction in DraftKings' Q4 EBITDA due to favorable bettor outcomes in NFL games.

DraftKings stock ticker display board

DraftKings stock ticker display board

Key factors impacting Q4 performance:

  • NFL favorites won over 70% of games
  • Favorites covered spreads at nearly 54% rate
  • One of the highest cover rates in Super Bowl era

However, DraftKings may have fared better than FanDuel due to:

  • Success from the Tyson-Paul fight sponsorship
  • Avoiding FanDuel's +4891 parlay payout
  • Less exposure to unfavorable NFL Christmas Day game outcomes

Industry outlook remains positive for several reasons:

  • Current high favorite win rates are historically unusual
  • Data shows most US recreational bettors typically underperform
  • Potential recovery during NFL playoffs
  • Growing NBA and college basketball seasons
  • Sports betting outcomes outside US market remain favorable

Analysts view this NFL-related setback as temporary, with some suggesting any stock weakness presents a buying opportunity. The broader sports betting market fundamentals remain strong, supported by product development and risk management capabilities.

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