Benchmark reiterated a Buy rating and $30 price target on DraftKings Inc. on Tuesday, citing the sportsbook operator's strong profitability metrics despite a challenging operating environment in New York.
DraftKings' shares, currently trading at $25.26, have fallen 27% year-to-date. The company reported a 3.7% year-over-year increase in handle for Week 8 in New York, though gross gaming revenue declined 31.3% and hold dropped to 7.7%, down roughly 400 basis points from the prior-year period.
Statewide data for New York showed a 29.9% year-over-year decline in total handle and a 10.9% drop in gross gaming revenue for Week 8. Hold improved to 8.0%, up 170 basis points from 6.3% a year earlier, though it fell from 11.7% in the prior week. The decline in statewide metrics was largely driven by Fanatics, which generated $47.7 million in handle compared with $212.7 million in the year-ago week. Excluding Fanatics, statewide handle rose approximately 0.8% year-over-year, while gross gaming revenue fell roughly 20%.
Fanatics' gross gaming revenue in Week 8 reached $3.5 million, up from about $0.4 million a year earlier. DraftKings' main competitor, Flutter's FanDuel, reported a 5.1% year-over-year increase in handle but saw gross gaming revenue decline 4.1% and hold fall to 8.1%, down 80 basis points from the prior year. Bank of America estimated a $4 million impact on FanDuel's EBITDA from fee adjustments related to Kalshi's parlay markets.
PENN Entertainment reported a 29.8% year-over-year drop in handle and a 63.2% decline in gross gaming revenue, with hold falling to 6.5% from 12.3% a year earlier. Rush Street, by contrast, saw an 11.2% decline in handle but an 8.4% increase in gross gaming revenue, with hold expanding to 11.7% from 9.6%. Prediction market volumes across platforms such as Kalshi and Polymarket rose to $10 billion.
