Online gaming stocks are on fire again, with DraftKings exciting investors by raising its revenue outlook for itself and for the industry.
DraftKings lifted its own long-term revenue projection to $5 billion, compared to around $1 billion expected this year.
It now also sees the total addressable market in the U.S. maturing at $22 billion for online sports betting and $40 billion for online casino. Canada sports betting would add another $5 billion.
DraftKings is easy to follow. It’s a large public company that communicates well to investors. It’s first, second or third in market share in states that report online gaming revenues in detail.
But tracking companies industrywide is more challenging. Many states don’t provide detailed revenue information. And the companies crowding into the space are numerous. They’re growing in number, all signing alliances and marketing agreements, winning skins and making bold claims for themselves.
Jefferies equity analyst David Katz has addressed this issue by creating a matrix of more than a dozen social and online data points he calls the Digital Wagering Scorecard. Datapoints range from web traffic to time on site to posts and shares and views, among other factors.
Katz then ranks the top 16 operators in separate tables, one on ranking from his data points, and the other on each company’s momentum.
Here’s Katz’ February Top 10:
| Name | Ticker Symbol | Relative Score |
| 1. Bet365 | Private | 100 |
| 2. DraftKings | DKNG | 96.95 |
| 3. FanDuel | FLTR | 96.82 |
| 4. Wm. Hill US | WMH/CZR | 85.26 |
| 5. BetMGM | ENT/MGM | 81.39 |
| 6. Foxbet | FLTR | 86.57 |
| 7. Barstool | PENN | 64.61 |
| 8. PointsBet | PBH | 62.06 |
| 9. BetRivers | RSI | 53.38 |
| 10. Golden Nugget | GNOG | 34.58 |
It should be noted that, in addition to BetRivers, Rush Street Interactive also operates PlaySugarHouse, and Caesars operates under its own name as well as William Hill. PlaySugarHouse and Caesars’ own brand also rank in Katz’ Top 16.
Perhaps the most interesting thing about the Scorecard is that Bet365 ranks No. 1. One wouldn’t know that by the headlines. As a private company, Bet365 doesn’t get nearly the daily coverage of its competitors.
Over time, Katz says he expects his matrix will become a proxy for revenues and, in turn, stock performance.
It’ll be interesting to watch this new measure evolve.
RIP, David Ehlers
It isn’t often one can say that a single individual outside of immediate family helped change his or her life.
Dave Ehlers was one of those people for me.
Dave spent a career in the securities industry, and remained an avid and insightful investor, even in retirement.
I first met Dave in the 1990s, when I became an investor in gaming stocks and he moved to Las Vegas and developed the same interest.
At the time, I was a newspaper guy who already had a long career—as a state house-political reporter, city editor, managing editor and editor-in-chief of a capital city daily, business journal publisher, and treasurer and vice president of a newspaper corporation.
But my interest in gaming stocks led me to start an emailed newsletter for fellow investors. It attracted subscribers from institutional investors to C-level executives to old securities hands like Dave.
It was February 2002 when I visited Dave in Las Vegas and he bellowed to me in his unique manner: “You’re charging $250 for your newsletter. You ought to charge $2,500. It’s worth it.”
I had just come from a meeting at Harrah’s where I learned that their top executives, from CEO Phil Satre on down, read my newsletter daily.
So, I went home and checked in with some other subscribers, among them still-current subscribers like Jason Ader and Robin Farley. Based on their feedback, I decided at middle age to quit my employer of many years and make my part-time hobby into a full-time business. That’s how Fantini Research was born.
Thanks, Dave. You will be missed.
