Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
OSB tax increases in Illinois
Jefferies’ David Katz on June 16 looked at how some companies are reacting to the increase of taxes on online sports betting.
“Flutter and DraftKings will offset Illinois’ OSB tax increase with a $0.50 per bet surcharge in the state,” Katz wrote. “Recall, Illinois recently passed a $0.25 per bet tax on the first 20 million bets placed in the state, with subsequent bets taxed at $0.50 per bet. We see the surcharge as an offsetting positive for Flutter and DraftKings, with reductions in handle likely to be small given the relatively low incremental cost. Both Flutter and DraftKings have said that they will remove the surcharge if the tax were to go away.”
Las Vegas meetings
Truist Securities’ Barry Jonas on June 13 wrote about meetings with companies and industry contacts in Las Vegas.
“Broadly: 1) the Strip is heading for a ‘choppy summer’ on tough comps/less events/seasonality but Q3 is seeing sequential improvements with a return to growth in Q4/2026 while operators don’t see any structural issues,” Jonas wrote. “2) Las Vegas locals trends are stable/solid, with the promo environment and low-end softness consistent. 3) The Regionals are seeing strong GGR performance with potential consumer trade-down tailwinds and 4), gaming tech is recovering from trade noise with Light & Wonder outperforming, and 5) Digital challengers (MGM, Caesars) initial take doesn’t appear to be following Flutter and DraftKings Illinois’ tax surcharges.”
New York OSB
Estelle Weingrod of J. P. Morgan on June 16 examined online sports betting in New York. “The most recent OSB data released yesterday was for the week ending June 8,” Weingrod noted, “recording handle growth of +16% year-over-year and GGR growth of +46% year-over-year, translating to an implied hold rate of 12.8% (up 261 basis points year-over-year). For Q2 to date (covering the period from March 31st to June 8th), the OSB handle was up 12% year-over-year, with GGR up 19% year-over-year, thereby resulting in an implied hold rate of 10.2% (up 63 basis points year-over-year).
Gambling.com overview
David Bain of Texas Capital Securities on June 11 wrote about Gambling.com being the “go-to affiliate/performance marketing and services company focused on the online wagering industry. It is also emerging as a data/service provider to the online sports industry. Gambling.com’s technology and services are underpinned by visible, multi-year global online wagering Total Addressable Market (TAM) growth. We believe Gambling.com’s EBITDA will outpace industry TAM growth driven by maturation of the B2C marketing structure, an increase of brands among operators, a longer-term acceleration/mix shift of new iCasino territories, profitable entrance into whitespace jurisdictions, margin augmentation, and continued acquisition integration/execution. “
