Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Prediction markets vs. OSB
Chad Beynon of Macquarie on January 16 released an overview of prediction markets for sports betting:
“Online stocks are -24% from end-August highs, prior to poor NFL hold in September and negative headlines from predictions threat. Our view is unchanged from Day 1 – Predictions’ sports product is not competitive with OSB, and most volume is from non-legal sports betting states, creating incremental EBITDA opportunities for DraftKings/Flutter. Low NFL hold to start the season has been (or should have been) a bigger driver of stock performance, in our view. We don’t believe consensus for Flutter/DraftKings is capturing this strong OSB hold, serving as a catalyst for the entire sector. We highlight Sportradar/Genuis Sports as unfairly hit despite insulation from hold volatility and benefitting in all prediction scenarios as their total addressable markets increase at no additional cost. Despite this, Sportradar/Genuis Sports shares are down 37%/22% from August highs. Both should win from increased US in-play (currently ~30% of handle vs 60%+ in mature markets) given a 3x increase in pricing.”
Bally’s in Chicago
David Katz of Jefferies on January 18 wrote that Bally’s is seeking an extension:
“Press reports in the Chicago Tribune indicated that Bally’s is pursuing a 12-month extension for its temporary casino license in Chicago, which expires on September 26. Our impression from management commentary is that the original timeline of late 2026 has been a bull case, whereas funding guidance from GLPI, as well as other commentary from management over the past year support a 2027 opening. In short, the application for an extension should not be taken as a surprise or have meaningful impact on the shares (GLPI +4.1% for the week).”
New Jersey December revenue
JP Morgan’s Dan Politzer looked at New Jersey revenue in a January 16 statement:
“New Jersey December Casino GGR of $216.1 million was -6.7% year-over-year and 4Q25 GGR was +3.5% year-over year. December table (game) GGR was -11% year-over-year (table drop was actually +10% year-over-year, but low hold of 15.1% compared to a high 18.6% in December 2024), while slot GGR was -5% year-over-year. December 2025 and 2024 each had eight weekend days, though New Year’s Eve fell on a Wednesday this year vs. Tuesday in 2024. December sports betting GGR of $116.3 million was +85% year-over-year (OSB GGR of $113.5 million was +84% year-over-year and retail GGR of $2.7 million was +168% year-over-year), while handle of $1.07 billion was -12% year-over-year, implying an 11.6% hold rate (+600 basis points year-over-year). December igaming revenue of $273.2 million was +20% year-over-year.
Digital outlook
Truist Securities Barry Jonas examined digital operators on January 13:
“Digital Operators (in) 2025 saw 1) structural hold concerns, 2) rising OSB taxes, and 3) prediction market fears. We believe hold improved into year-end and suspect initial 2026 company guidance may be conservative to avoid guide downs. Higher taxes may be less of an issue in 2026, though we also don’t see much legalization right away (beyond Maine). Prediction market legal battles will heighten in 2026 and while not without risks – DraftKings/Flutter are positioned if it flourishes / or goes way.”
