ESPN Deal Extends DraftKings 'Already Large Marketing Reach'
Walt Disney Co's (NYSE: DIS) ESPN announced two separate deals with DraftKings Inc (NASDAQ: DKNG) and Caesars Entertainment (NASDAQ: CZR) on Monday. The deals include link outs for both brands sportsbooks.
DraftKings gets exclusive rights for daily fantasy sports partnership with ESPN. Both brands will be featured on ESPN’s website, apps, and integrated into studio shows.
Why It’s Important: Bank of America analyst Shaun Kelley sees this as a “meaningful improvement on its previous deal with ESPN” for Caesars.
“We continue to expect meaningful progress on a restructuring of its deal with William Hill by year-end which will be a key milestone in the pursuit of this growth vertical,” Kelley says of Caesars sports betting partnership with William Hill.
“For DraftKings, this further builds on its existing relationship with ESPN’s parent Disney and extends the company’s already large marketing reach,” Kelley says.
DraftKings has been active in signing partnerships over the last few months with Michael Jordan and the Chicago Cubs recently announced. ESPN is the top sports website in the U.S. with over 400 million views in the month of August.
August Numbers: New Jersey reported $97.8 million in iGaming volume for the month of August, up 113% year over year. iGaming gross volume has increased 100% year over year in each month since April. The 2020 year-to-date iGaming figure is already 24% ahead of the full year 2019 figure with four months still to report.
Online sports betting hit an all-time high gross volume of $602 million in New Jersey for the month of August. This was 23% higher than the previous record set in December 2019. Overall sports betting in New Jersey hit a monthly state-record $668 million.
What’s Next: Kelley recently reiterated a Buy rating on Penn National Gaming (NASDAQ: PENN). Kelley has a Neutral rating on DraftKings with a $40 price target. He's watching the growth of sports betting through additional states in the 2020 and 2021 years.
“There are a number of key states that are live for the 2020 football season that were not active in 2019, mainly Colorado and Illinois,” Kelley said. “Michigan, which is expected to go live for mobile later this year, may be the most important state to watch."
Price Action: Shares of DraftKings are down 2% to $47.86. Shares are up more than 200% in 2020.
Photo credit: World Poker Tour, Flickr
Latest Ratings for DKNG
Sep 2020 | Wolfe Research | Initiates Coverage On | Peer Perform | |
Sep 2020 | Evercore ISI Group | Initiates Coverage On | Outperform | |
Sep 2020 | Bank of America | Initiates Coverage On | Neutral |
View More Analyst Ratings for DKNG
View the Latest Analyst Ratings
See more from Benzinga
Talking Sports Betting And Dave Portnoy With BETZ ETF Founders
As NFL Plays On During Coronavirus Pandemic, Strong Ad Rates Put Broadcasters In Spotlight
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
