The U.S. sports betting industry has seen a shift towards more rational valuations and expectations. Online sports betting companies are now being valued at levels that allow investors to analyze their current and prospective values more reasonably.
Gone are the days of overvalued stocks selling at high multiples of projected revenues. Companies like DraftKings and Flutter are now selling at more reasonable valuations of around 10 to 11 times projected 2026 EBITDA. DraftKings, in particular, has turned profitable, making positive EBITDA guidance more credible.
Despite this shift towards rationality, some trends remain consistent in the industry. Big American fantasy sports operators like DraftKings and FanDuel continue to maintain large market shares. Brick-and-mortar casino companies are also vying for success in the online betting space, with operators like Caesars, PENN Entertainment, and MGM Resorts pursuing profitability and growth.
In this evolving industry landscape, companies like Flutter and Entain stand out as particularly interesting. Flutter, originally from the British Isles, has become an industry leader through its acquisition of FanDuel and its success in the U.K. sports betting and iGaming markets. The company has demonstrated a consistent ability to grow profitably, a rare feat in the industry.
Entain, a London-listed conglomerate with a strong presence in online and retail sports betting and iGaming, is also making waves with the appointment of Gavin Isaacs as CEO. Isaacs, a seasoned gaming executive with a track record of turning around underperforming companies, brings a wealth of experience in mergers and acquisitions to the table. His leadership could potentially lead to significant changes at Entain, which has seen its stock price decline in recent years.
As the digital sports betting-iCasino industry continues to evolve with new players, mergers, and changes in business models, companies like Flutter and Entain are positioned to make a significant impact. Investors and industry observers are closely watching how these companies navigate the dynamic landscape and capitalize on emerging opportunities. With experienced leadership and a focus on profitability, both Flutter and Entain have the potential to shape the future of the sports betting industry.