Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
J.P. Morgan’s Dan Politzer examined the recent DraftKings’ earnings call on August 7:
“DraftKings’ report itself was better than feared, as 2Q Adjusted EBITDA of $115 million was similar to J. P. Morgan’s Equity Strategy/buy-side expectations and investors were relieved that the company maintained its financial year 2026 guidance, especially after peer Flutter lowered. Positives that stood out were commentary on (1) predictions momentum, (2) operation expenses prudence/restraint, and (3) post-World Cup July handle +20% year-over-year, with strength seen carrying into NFL. We take a more balanced view on the recent surge in customer acquisitions (DraftKings spent 10% more than planned, but customer acquisition costs 25% lower than anticipated), and similarly, we think it’s difficult for DraftKings to be fully insulated from Flutter accelerating sportsbook promo spend.”
Barry Jonas of Truist Securities wrote about Penn Entertainment’s second quarter on August 6:
“Penn reported a +4% 2Q26 EBITDAR beat, capping a strong quarter for regional gaming. Results were boosted by property renovations (Aurora, Illinois , Columbus, Ohio, & Joliet, Illinois), each posting robust improvements in core KPIs and driving a +2% 2026 EBITDAR guidance raise. Interactive losses were in-line as management leans increasingly into icasino and hopes to translate success in Canada to newly opened Alberta. We reiterate our Buy rating as we continue to see scope for value/free cash flow-oriented investors to rotate in, especially as Interactive losses begin to inflect this year and Penn’s strong free cash flow profile comes more into focus. We move 2026E to the midpoint (2027E NC) with no change to our $25 price target.”
Texas Capital Securities’ David Bain looked at Inspired Entertainment on August 6:
“Following a 1% EBITDA beat, our forecast is largely unchanged. 2Q26 was an execution quarter, in our view. 2Q26 segment results were matched by continued debt repayment and share buybacks. Importantly, Inspired Entertainment guidance was held, despite concerns surrounding the U.K. tax increase in April (stock risk reduction). However, Inspired Entertainment trades for 3.8x CY27E EV/EBITDA, a valuation we do not believe is sustainable. We continue to believe Inspired Entertainment shares should re-rate higher to better reflect its recently transitioned business to sustainably higher margins and higher free-cash-flow generation coupled with lower net leverage.”
Jefferies’ David Katz wrote about New York online sports betting on August 9:
“New York OSB data for the week ending August 2 showed a stronger week for operators, with statewide hold of 12.1%. The largest operators performed best, with average hold across DraftKings, Flutter (FanDuel), and Fanatics of 12.8%, while all three gained at least 150 basis points of market share week-over-week. Meanwhile, DraftKings’ prediction market exchange, DKeX, reached a record high in weekly volume for the week ending August 6 at $2.095 million, +60.7% above the prior weekly record set during the World Cup week ending July 9.”
