Online betting stocks may continue to gain traction predicts analyst
Online Betting and iGaming Market: Key Players Shine Amidst Regulatory Headwinds
In the dynamic world of online betting and iGaming, key players are making waves with strong performances and promising outlooks. As of June 27, 2025, the industry is showing no signs of slowing down.
DraftKings is leading the charge with record-breaking financial performance. In Q2 2025, the company reported a 37% year-over-year increase in revenue, reaching $1.513 billion. This impressive figure also marks all-time highs for net income and adjusted EBITDA. DraftKings reiterated its full-year 2025 revenue guidance of $6.2 to $6.4 billion and adjusted EBITDA guidance of $800 to $900 million, aiming to reach the high end of these ranges. Although the company slightly missed its earnings per share (EPS) target, its EPS of $0.38 still represents substantial growth (73% YoY).
DraftKings is strategically focusing on product expansion, sportsbook hold improvements, and promotional efficiency under competitive and regulatory pressure, including state tax hikes. The company also launched a political action committee (PAC) to influence favorable market conditions. Its success in the second half of 2025 will depend on the momentum of NFL season launches, hold trends, and new features to drive monetization further.
Flutter Entertainment, owner of FanDuel, holds a strong market position and a positive medium-term outlook. Analysts, such as Jefferies, give Flutter a “Buy” rating with a price target of $380, expecting a 31% sales increase and 17% EBITDA compound annual growth rate over the next three years. However, Flutter faces competitive pressures from DraftKings and challenges from higher state-level taxation and operational expenses due to market expansion. Favorable analyst sentiment and robust fundamentals suggest solid growth potential continuing into H2 2025.
Rush Street Interactive (RSI) is generally viewed as a competitive regional player focusing on differentiated market penetration and partnerships. Given industry trends, RSI’s 2025 outlook likely involves continued geographic expansion and product innovation to grow its footprint amidst intensified competition from larger peers like DraftKings and Flutter.
Genius Sports and Sportradar are key data and technology providers whose outlook depends on continuing partnerships with betting operators and sports leagues. Both companies are positioned to benefit from industry growth driven by increasing regulation and demand for reliable data solutions in both betting and iGaming markets. They are also likely expanding into new markets and enhancing their product offerings tied to the broader industry growth.
The regulatory environment and competitive landscape remain key factors shaping all companies' H2 2025 prospects. California and Texas remain the key states to watch for potential sports betting legalization, but near-term prospects for approval in those states are unclear. The new tax hike in Illinois will result in operators paying a levy of 25 cents per wager on the first 20 million bets booked, which will double to 50 cents thereafter.
Despite Illinois passing a second sports betting tax increase in a year and announcing transaction fees of 50 cents per bet in Illinois effective September 1, consumer-facing internet sports betting equities like DraftKings and Flutter have experienced significant gains over the past month. Record hold rates in some of the largest sports betting states have supported these gains.
More state legalizations are expected to expand the total addressable markets for iGaming and sports betting, potentially prompting bullish revisions to investor expectations. Online betting stocks have been experiencing a surge in their performance, with DraftKings, FanDuel owner Flutter Entertainment, and Rush Street Interactive among the consumer-facing internet sports betting equities mentioned.
Internet casino growth continues to exceed expectations, with a forecasted 30% year-over-year growth for the June quarter. Macquarie analyst Chad Beynon thinks the outlook for 2025 gross gaming revenue (GGR) has improved, citing strong 2Q25 OSB hold rates, an acceleration in online sports betting handle growth, and better-than-expected iGaming growth rates. Beynon expects the momentum in online betting stocks to continue in the second half of 2025. He sees Genius Sports and Sportradar as "lower-volatility ways to play global sports betting with strong upside from the shift toward in-play betting in the US."
In summary, the online betting and iGaming market is thriving, with key players like DraftKings, Flutter Entertainment, Rush Street Interactive, Genius Sports, and Sportradar leading the charge. Despite regulatory and competitive headwinds, these companies are poised for continued growth and success in the second half of 2025.
- DraftKings, with its impressive financial performance, aims to reach the high end of its full-year 2025 revenue and adjusted EBITDA guidance.
- Flutter Entertainment, owner of FanDuel, is anticipated to see a 31% sales increase and a 17% EBITDA compound annual growth rate over the next three years, according to Jefferies.
- Rush Street Interactive (RSI) is expected to continue geographic expansion and product innovation to enhance its market presence amidst competition from larger peers.
- Genius Sports and Sportradar, key data and technology providers, are well-positioned to benefit from industry growth as they expand into new markets and enhance their product offerings.
