Sports betting in the U.S. is experiencing significant growth, with projected revenue reaching $40 billion by 2026. Online sports betting, in particular, is expected to drive this expansion, attracting nearly 55 million users by 2029. Carl Icahn's recent acquisition of a substantial stake in Caesars Entertainment highlights the sector's appeal. DraftKings, a pure play in the online sports betting industry, has received positive attention from analysts such as Morgan Stanley and Bank of America, with strong Q1 results and increased revenue and EBITDA guidance for 2024. Caesars, benefiting from its digital unit's strong performance, also stands as a promising investment in the growing sports betting market.

The United States sports betting market is experiencing a significant surge, with projected revenue reaching an impressive $40 billion by 2026. This growth is primarily driven by the increasing popularity of online sports betting, which is expected to attract nearly 55 million users by 2029 [1].

Carl Icahn, the renowned investor, and multibillionaire, recently acquired a substantial stake in Caesars Entertainment (CZR), highlighting the sector's appeal [2]. Caesars' digital unit, which includes its online sports betting app, generated $5 million in EBITDA last quarter, showcasing the potential of this growing market [2].

One of the most attractive pure plays on online sports betting is DraftKings (DKNG). Morgan Stanley identified DKNG as a top pick in the North America gaming and lodging sector, citing the company's positive free cash flow and the strong growth of the sports betting market [1]. DraftKings reported strong Q1 results, with a 53% increase in revenue and a positive adjusted EBITDA of $22.39 million [1].

Bank of America also added DKNG to its list of best investment ideas, recognizing the company's potential in the growing sports betting market [1]. DraftKings raised its 2024 sales guidance to $4.9 billion and its adjusted EBITDA outlook to $500 million, demonstrating the company's strong financial performance [1].

Caesars Entertainment, with its digital unit's strong performance, also stands as a promising investment opportunity in the sports betting market. Icahn's acquisition of a substantial stake in the company further validates this potential [2].

In conclusion, the United States sports betting market is expected to reach $40 billion by 2026, driven primarily by online sports betting. Companies like DraftKings and Caesars Entertainment, with their strong financial performance and growth potential, present promising investment opportunities for those looking to capitalize on this growing industry.

[1] https://investorplace.com/2024/06/3-online-sports-betting-stocks-that-look-like-likely-winners/
[2] https://www.bloomberg.com/news/articles/2023-05-31/carl-icahn-said-to-have-a-sizable-position-in-caesars-entertainment

View source