Posted on: April 2, 2024, 09:58h.
Last updated on: April 2, 2024, 09:58h.
A recent survey on consumers’ iGaming and online sports betting habits conducted by Truist Securities indicated users have a preference for DraftKings (NASDAQ: DKNG).
DraftKings and Flutter Entertainment’s (NYSE: FLUT) FanDuel have carved out an enviable duopoly in the US sports wagering market, by some estimates controlling 70% of it. However, DraftKings has established a leading in iGaming. Those polled by Truist note they use DraftKings (29%) more than FanDuel (22%) and 61% of those that use both mobile applications prefer the former to the latter.
Reasons for that preference were generally mixed, leading us to believe the consumer generally views the two as largely equal today,” observed Truist analyst Barry Jonas.
Both DraftKings and FanDuel are among the most recognizable and valuable gaming brands, but Jonas noted the former is likely to emerge victorious in a marketing war, though the duo can find ways to coexist in the iGaming/sports wagering landscape.
Good News for ESPN Bet
Although it’s still less than six months old, Penn Entertainment’s (NASDAQ: PENN) ESPN Bet scored well in the Truist survey.
“(That) reinforces our belief in its potential to succeed longer term,” added Jonas. “Consumer-health responses were about what we expected, as a more expensive cost of living seems to be having a moderate impact” on ESPN Bet users’ betting frequency.
That could allay concerns about the ability of the app to gain market share against entrenched incumbents such as DraftKings and FanDuel. Some analysts believe that ESPN Bet can make market share gains in states where it debuts alongside competitors, not following rivals into markets after they’re established.
Forty-four percent of those surveyed by Truist said ESPN Bet is their preferred destination for checking scores and 64% said they’d like to see the app enhance integration for betting purpose beyond currently available lines. Another 52% told the research firm they envision ESPN Bet becoming their mobile betting app of choice in the future.
Parlays Pivotal for Operators
Not surprisingly, parlays are proving pivotal for gaming operators because they’re highly profitable and accretive to margins. The good news for gaming companies in the Truist survey is that 75% of those questioned said they primarily betting parlays.
However, 39% said they’re doing so less while 20% are increasing their use of such wagers. The remaining 41% are neither cutting nor upping their use of parlays.
On the iGaming front, DraftKings (27%) was the leader in the Truist poll followed by FanDuel (18%) and BetMGM (14). An encouraging sign from Caesars Entertainment (NASDAQ: CZR) was that it pulled 15% customer preference across both its iGaming and sports wagering apps.
“A positive proof point for the rollout of its dual strategy. … A majority of players (62%) stated they prefer to play icasino on the same platform they sports bet, speaking to the importance of cross-selling and retention,” concluded Jonas.
