Hedgeye analyst Sean Jenkins highlighted a critical, yet under-discussed, aspect of the online gaming sector this morning on The Call @ Hedgeye: the robust growth of iCasino.
Contrary to popular belief, it's not just sports betting that's booming; online casinos are providing unprecedented revenue spikes for apps like DraftKings (DKNG), a longstanding “Best Idea” Long for Hedgeye’s Gaming, Lodging & Leisure team.
“It’s a really unique, secular story not getting enough airtime, but we’re going to give it as much as we can on this platform and our notes and research,” Jenkins explained. “What’s real interesting is in a mature market like New Jersey, that’s offered iCasino since 2013, that market’s still accelerating north of 20% year over year.”
Casino operations currently drive 40-45% of DraftKings’ Gross Gaming Revenue (GGR).
“This is where all the profits are, at least for now,” Jenkins added. “You have that inflection in sports betting, but iCasino is really where the high-margin growth is.”
“There's a reason why on our signal strength list of longs, DraftKings is the finest wine,” added Keith McCullough. “It's the oldest, the longest-held idea by the team.”
Watch the clip above to see Hedgeye’s CEO announce a new product in the works.
