Latest news with #JordanBender
CNBC
4 days ago
- Business
- CNBC
FanDuel adds 50-cent surcharge on Illinois bets to offset state taxes, DraftKings may follow
FanDuel is upping the ante in Illinois with a new 50-cent surcharge on all wagers, and DraftKings may be next. Flutter-owned FanDuel is introducing the charge to mitigate the impact of new taxes that the state instituted with its new budget, which disproportionately affect the two leading sportsbooks. The new tax is applied to each wager that a sportsbook accepts — 25 cents per bet for the first 20 million wagers, 50 cents per wager after that. "Should the state reverse its decision at any point in the future, FanDuel will immediately remove the $0.50 transaction fee," Flutter said in a press release. DraftKings may be following suit. In a statement issued on Tuesday, a company spokesperson said, "DraftKings anticipates taking action and expects to share more information soon." Combined, FanDuel and DraftKings account for about 75% of the Illinois sports betting market. Citizens gaming analyst Jordan Bender estimates the new transaction fee will translate to $79 million in new 2026 revenue for DraftKings, or 5.4% of its projected EBITDA for that year, and $86 million for FanDuel, about 2% of EBITDA. The Illinois tax comes on top of a progressive tax passed last year, which leaves the most successful sportsbooks paying taxes at a rate of 40%. Before the change, they were paying at 15%. When that tax bill passed, DraftKings initially said it would pass along the costs to consumers. After massive backlash, it reversed course. Now FanDuel has picked up the gauntlet to manage the impact. "It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time. We are disappointed that the Illinois Transaction Fee will disproportionately impact lower wagering," said Flutter Entertainment CEO Peter Jackson in a statement. There are a number of other state legislatures considering raising their own tax rates, including New Jersey, Maryland, Massachusetts, Michigan and Pennsylvania. Jackson said the tax disproportionately punishes the companies that have invested the most in growing the regulated market, adding the fee will motivate gamblers to head to unregulated operators who don't pay taxes and don't have the same consumer protection. And he said, the tax most affects recreational customers who make small bets. "It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth and maximize revenue for states over time," he said.
Yahoo
02-06-2025
- Business
- Yahoo
How much the Illinois sports betting tax could cost operators
Shares of sportsbook operators DraftKings (DKNG), FanDuel parent company Flutter Entertainment (FLUT), and MGM Resorts (MGM) are hard pressed on Monday after Illinois lawmakers passed a tax on sports bets. Citizens Senior Equity Research Analyst Jordan Bender comes on Asking for a Trend to discuss what this new tax could cost sports betting platforms in the long run. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
March Madness: How big it is for gaming companies
March Madness has begun. The American Gaming Association predicts that Americans will bet $3.1 billion on March Madness. Citizens JMP Senior Equity Research Analyst Jordan Bender joins Asking for a Trend to discuss the sports betting landscape and the economy's impact on the industry. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Well, the first weekend of March Madness has come and gone, and along with all the upsets and buzzer beaters, one big winner has already emerged, sports betting platforms. That's because the American Gaming Association predicts fans are going to bet a whopping $3.1 billion on the tournaments this year. That would be up $400 million from last year. Joining us now is Jordan Bender, Citizens senior equity research analyst. Jordan, it's always great to have you on the show. So, let's start big picture, Jordan. March Madness, we talk about this event, talk about the tournament, Jordan. How important is it for the sports betting companies you cover? For investors, can you help quantify it for us? Josh, good to see you, as always. You know, this is a really important time of year for colleges, anyone with a bracket, as well as the sports spending companies. We estimate that around three to four billion dollars will be wagered over the course of March Madness. If we compare that to a Super Bowl, a Super Bowl, we estimated about 1.7 billion. So, you know, obviously a lot more games, but about double the size of the wagering pool. Now, we're only a couple of days in here. Um, you know, we think that the quarter, the first quarter here for the sports books are tracking in line to maybe better than expectations. Now, we don't know their early results, and we still have a couple games left within the first quarter. So the remainder of this week should be important for these companies. But overall, you know, it's a fairly good size um, you know, wagering pool for these companies to start the year. And and the companies you cover, Jordan, were they doing anything different this this year versus, you know, last year's March Madness in terms of the experience, what they were offering customers? Yeah, it's, you know, this sector is built around product and technology. Who can offer the most uh ways to bet, how you can bet, where you can bet. Uh we were actually with DraftKings last week, and kind of what they were talking about was they think they have the most product. So ways to bet, uh players to bet on out in the market this year. So, you know, as we've seen this sector really evolve over the course of the last seven or eight years, it's all been, it's been about how many ways you can get people to your platform and how many ways you can get them to bet. So, that's always been the name of the game, you know, year after year, sport by sport, it will always continue to evolve that way. And Jordan, following March Madness, then you you, I mean, you'll have baseball, but it is relatively, you know, quieter period for these companies. How how do they navigate that? Yeah, you know, this is where we kind of think it's the end of the the, you know, height of the sports betting calendar. You have football, you have March Madness, which we talked about the size of, you know, the wagering pool for that. But you do start to go into a seasonally slower part of the year, uh during the summer with um MLB, with uh NBA and NHL playoffs. You know, from a from a wagering per game perspective, it it's not as important from a seasonal point of view. Um, but we think that, you know, as the year goes on, back into football season, you know, Josh, as you talked about with product evolution, they'll continue to put out product through the summer for MLB, and then as well as into the NFL, um, you know, starting in the fall again. Kind of a broader question for you, too, Jordan. You know, investors have been more concerned about US economic growth, about whether the economy is going to slow down or or potentially something even even worse. What what could that mean for the sports betting companies and their businesses? So, there isn't all that much data, because, you know, like I said, this industry's only been around since 2018, at least here in the US. From what we can tell, you know, Nevada has been around for a while, as we know with casinos, with sports betting. The data is somewhat limited, but we do think that this is going to be a recession-resilient type of industry. It's a low form of entertainment for what you're actually spending. In Nevada during the great recession, handle was only down about two to three percent. So, you know, as we've seen in the last couple of weeks with all the tariffs and, you know, investors trying to assess, how will this impact the gambling sector? Then within that, the online gambling sector. We actually point to this um, you know, this area of the consumer industry as something we think could continue to actually grow through recession, just given A, the legalization and the the continued penetration to some of these states to acquire sports book customers, as well as again, it's a low form of entertainment that we think people will continue to do um through tougher turbulent times. In terms of the competitive landscape, Jordan, you know, you're talking about FanDuel and DraftKings, and we've talked about this on the show before, and then kind of bet MGM taking the bronze. Is that still the case, or is there been there been shifts there? You know, it's always been one A and one B, and it's always been DraftKings and FanDuel. Those two companies have, at least on the sports book side, have comprised about 75 to 80% of this of the market share in the United States. You know, so between them and their next competitors, there's always been a huge, massive difference. However, you know, Fanatics is the company that we're watching. They've built up their business around, you know, they have a a database of 75 million people who have bought apparel or merchandise through them, but they've also really uh dug into the VIP section of the sports betting ecosystem. So, very high net worth individuals, and they're actually within striking distance of BetMGM who currently holds the third place spot for that third place spot. You know, again, there's still a wide gap between the top two companies, but they're making a move. Um, you know, at this point, we don't really see them as too much of a threat to take over the one or two spot. Jordan, always great to see you and to have you on the show. Thanks for joining us. Thanks, Josh. Sign in to access your portfolio
Associated Press
03-03-2025
- Business
- Associated Press
The Future Of Sports Betting? Sportradar Technology Fuels Multi-Billion Dollar In-Play Industry
To learn more about how Sportradar is working to revolutionize the sports betting game, click here. NEWMEDIAWIRE) - Imagine that for every stock, bond or commodity you bought, you could only ever trade futures. The only way you could profit from that investment would be to let the contract run to expiration. But you could equally be forced to take a loss, while also missing out on any unrealized profit you might have made along the way. Financial markets have evolved instruments that overcome this problem. So, too, have the sports betting markets, with the difference between pre-game (or antepost) betting and in-play (or live) betting. And they needed to – because unlike with a futures contract, for a pre-game-only bet, when the game finishes and you have picked the wrong outcome, your loss is total – always. With in-play betting, you can close (or 'cash out') a winning position to take profits before the game is done or as a stop loss for a loser. This explains why in-play betting is so much more popular than pre-game in mature markets. JMP Securities analysts Jordan Bender and Eric Ross say only about 30% to 40% of betting turnover in the U.S. is from in-play betting, versus perhaps double that in Europe. They anticipate compound annual growth of 25% for in-play markets this decade as a base case. This suggests that, just as new financial-market innovations have raised trading volumes and market participation, so too could closing the pre-game/in-play gap introduce enormous amounts of liquidity to the U.S. betting market. This constitutes a major profit opportunity for U.S.-focused sportsbook operators and the value chain that serves them. And part of the vanguard leading that effort is the global B2B sports technology company Sportradar Group (NASDAQ: SRAD). The company reports it has exclusive access to colossal amounts of data from its long-term partnerships with major sports leagues and federations around the world such as the NBA, the WNBA and NBA G League, ATP tennis, the NHL, MLB, NASCAR and the Bundesliga and UEFA. The data, the company says, fuel the technology it has developed that sits behind odds-setting, risk management, marketing and trading services for almost the entire betting industry. These services are utilized by its hundreds of betting-operator clients, including online giants DraftKings, Bet365 and Flutter – the parent company of FanDuel. Through Sportradar's technological innovation, the in-play betting volumes sportsbooks handle are growing. Its ATP offering is one example that underscores how this is being achieved. Sportradar delivers 1,500 betting opportunities across every ATP tennis match, creating minute-by-minute markets that are then offered to bettors by operators all over the world. This type of in-play betting maximizes the engagement touchpoints fans have available to them while watching events. The real-time betting interactions of in-play micro-markets naturally enhance fans' engagement with the games they are watching. Also launched for the NBA in 2024, Sportradar is this year expanding its micro-market model in the U.S. through soccer, baseball and ice hockey. And adoption of these in-play products is expanded by delivery mechanisms that are again Sportradar innovations. Its emBET product integrates betting content and functionality directly into NBA League Pass, the NBA's OTT service – giving fans in jurisdictions where sports betting is legal the opportunity to bet from directly within the game stream. Stephen Shapiro, sports and entertainment management professor at the University of South Carolina, has said: 'From a sports business perspective, leagues love [betting]. A sports fan is going to consume more sport if they are gambling. And they are going to care about more teams and players than if they were not.' But it is not only the betting operators, the leagues and the federations that profit from a new proliferation of in-play betting activity. All markets require information to be efficient, and the betting markets are no different in that regard. Which is why the media also stands to potentially benefit from Sportradar products like Radar360, which powered FOX Sports' broadcast of Super Bowl LIX. Its integration of real-time data and advanced analytics again delivers insights directly into the broadcast, allowing fans to dispense with their second screen. Another product, 4Sight streaming, uses computer vision, artificial intelligence and machine learning to analyse live video at up to 120 frames per second. The data are then incorporated in real time into dynamic, 3D-animated overlays of visual datapoints to augment the viewing experience and inform betting decisions. It can also help build audiences by pushing automated highlight clips during live matches. And just as Sportradar helps make leagues' platforms and media outlets the conduits to betting markets, it also makes broadcasters of the sportsbook operators. By hosting sports content that might otherwise not have had a TV audience, Sportradar is expanding the reach of those new and niche sports and leagues. Sportradar reports its Live Channel Online features are generating over 200 million views per month for its partners from more than 400,000 events it broadcasts live every year in 17 different sports. This combination of attracting new audiences and engaging existing fans more deeply helps ensure their attention is held for extended dwell time, building their brand loyalty with the league. This, in turn, raises the revenues of sportsbooks, many of which are powered by Sportradar's own white-label Managed Trading Services. The company reports that this platform is the engine under the hood for hundreds of bookmakers globally, providing the advanced sportsbook services that keep them going and handling around €35bn in turnover in the twelve months leading up to the end of the third quarter of 2024. So, plainly, what is good for the sports ecosystem is also good for Sportradar's own revenues. According to Cornell University, 'gambling markets represent a simplified form of financial markets.' If that is true, then an investment in Sportradar is an opportunity to purchase a stake in a chunk of the trading revenue, the risk management, the broadcasting content, the marketing and the future technological innovation in and around sports' financial markets. All at a time when the company anticipates that liquidity in the system is about to explode.
