Investment firm Macquarie has picked DraftKings (DKNG) and Flutter Entertainment (FLUT) as the best online sports betting stocks to own going into the NFL and college football seasons. Indeed, four-star analyst Chad Beynon believes that higher tax rates in New Jersey, Illinois, and Louisiana are already reflected in their stock prices. In addition, both companies are expected to benefit from favorable NFL outcomes, better profit margins, and continued growth in online sports betting and iGaming during Q4.
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It is worth noting that recently, sportsbooks have seen stronger “hold rates”—the percentage they keep after payouts—which had been disappointing in earlier quarters. That improvement is partly due to bettors placing more high-margin wagers, like parlays and prop bets. These types of bets are riskier for the bettor but more profitable for the sportsbook.
Furthermore, as of July, FanDuel (owned by Flutter) led the U.S. online sports betting market with a 39.0% share, followed by DraftKings at 34.4%. Fanatics/PointsBet came in third with 7.9%, and BetMGM (MGM) was fourth at 7.0%. Meanwhile, Caesars Sportsbook (CZR), Bet365, and ESPN Bet (PENN) were the only others with a market share of over 2%. Interestingly, the total legal sports betting handle in the U.S. is expected to reach about $164 billion in 2025, up 9.5% from 2024. Most of that growth comes from increased user activity, not new state markets, with football continuing to drive the majority of bets.
Which Sports Betting Stock Is the Better Buy?
Turning to Wall Street, out of the stocks mentioned above, analysts think that CZR stock has the most room to run. In fact, CZR’s average price target of $36.82 per share implies more than 39% upside potential. On the other hand, analysts expect the least from PENN stock, as its average price target of $22.22 equates to a gain of 12.3%.
