Analysts at Bernstein have reiterated their 'outperform' rating on DraftKings, the US-based sports betting and iGaming operator, pointing to what they describe as a structural marketing advantage that sets the company apart from its rivals. In a research note published this week, the broker emphasised that DraftKings has been able to acquire and retain customers at a lower cost than competitors, a critical edge in the fiercely competitive US market.
The endorsement comes as the US sports betting landscape continues to consolidate, with major players vying for market share following the Supreme Court's 2018 ruling that allowed states to legalise sports wagering. Bernstein noted that DraftKings' data-driven approach to marketing, combined with its strong brand recognition, has enabled it to achieve a higher return on investment from promotional spend. The firm expects this advantage to persist as the market matures.
For UK investors, the analysis carries particular weight given the significant exposure of London-listed gambling giants to the US market. Flutter Entertainment, which owns FanDuel, and Entain, which operates BetMGM in a joint venture, are both heavily reliant on their American operations for growth. While DraftKings' strength is a positive signal for the sector's overall health, it also underscores the intense competition that UK firms must navigate.
Neil Wilson, chief market analyst at Finalto, commented: 'DraftKings' ability to keep customer acquisition costs down is a key metric. If they can sustain that, they will continue to take share from rivals. For UK-listed operators, the message is clear – efficiency in marketing spend is becoming just as important as the product itself.'
The broader context for the sector includes ongoing regulatory scrutiny, both in the US and the UK, where the Gambling Act review is expected to introduce tighter affordability checks. Despite these headwinds, analysts remain broadly optimistic about the long-term growth trajectory of online sports betting, with the US market still in its early stages of expansion. DraftKings shares have risen approximately 15% year-to-date, outperforming the wider market.
Source: Bernstein research note, Finalto commentary