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DraftKings Is the Real MVP of the 2025 NFL Football Season
DraftKings Inc. (NASDAQ: DKNG) is best known for its online and mobile sports betting app, especially as the 2024 National Football League (NFL) season is underway. There are lots of mobile sports betting apps from competitors in the consumer discretionary sector like Flutter Entertainment plc (NYSE: FLUT), FanDuel, MGM Resorts International (NYSE: MGM), MGM Bet and PENN Entertainment Inc. (NASDAQ: PENN), ESPN Bet. However, DraftKings is especially entrenched when it comes to the NFL and Major League Baseball (MLB) due to its origins.
DraftKings: A True Sports Fan's Platform
DraftKings wasn’t always a sports betting app. In fact, it wasn't even created for sports gambling but rather for the love of the game. Three friends started DraftKings in a bedroom to create a daily fantasy sports platform. While it was launched in 2012 with MLB in mind, it gained the most popularity when the NFL was added to the daily fantasy sports contests. For years, DraftKings heavily advertised itself as a free fantasy sports platform with daily contests. FanDuel also promoted fantasy sports as well. This would serve as a gateway to incubate players for the seamless transition into sports betting if and when it was legalized in the United States.
Fantasy Sports: Build It, and They Will Come
Fantasy sports can be traced back as far as the 19th century. In fantasy sports leagues, players can perform real-time drafts to construct sports teams comprised of real-life sports athletes. They can compete with friends and other players all season long based on how the players perform in the real games. Fantasy sports weren't considered online gambling since players weren't exchanging money with each other but rather playing to win prizes in daily contests. While DraftKings wasn't the first fantasy sports platform, they are a pioneer in popularizing it, ushering it into the digital mainstream.
Strong Momentum Heading Into the 2024 NFL Season
NFL football season is the strongest betting season of the year for DraftKings, for both fantasy and its sportsbook. Everything leads up to the Super Bowl of betting, which is the Super Bowl championship. Not surprisingly, the legalization of sports betting (in specific states) has surged the viewership for the NFL since putting money on the line tends to make people more interested in the game. Having skin in the game makes it exponentially more compelling.
Analysts expected the 2024 NFL season to cumulatively generate a record $35 billion in total online wagers. In the 2023 NFL football season, DraftKings had the highest uptime at 96.1%, followed by FanDuel at 90.55% and BetMGM at 86.36%.
DraftKings heads into NFL season with 3.1 million average monthly unique players (MUP) from the second quarter of 2024, up 50% YoY. DraftKings raised its fiscal 2024 revenue guidance to $5.05 billion to $5.25 billion, from previous guidance of $4.80 billion to $5.00 billion, equating to YoY revenue growth of 38% to 43%.
More Skin in the Game
As more states legalize online sports betting, more opportunities for DraftKings emerge. For the 2023 NFL season, 33 states, including Washington D.C., had legal sports betting in some form. That number rose by five states heading into the 2024 NFL season. DraftKings is legal and operating in 26 states heading into the 2024 NFL football season. DraftKing’s online casino is currently available in five states. Its daily fantasy sports are legal in 45 states in the United States.
DraftKings' Ace Up the Sleeve: BetVision and Micro-Bets
DraftKings will be bolstering its app features in the 2024 NFL season with BetVision, a feature that will stream live games in the DraftKings app while enabling users to bet on the same screen simultaneously. This makes for a more immersive experience merging live viewing with real-time betting. BetVision streaming is only available for the games you place a bet on.
Additionally, the acquisition of Simplebet, enables DraftKings to seamlessly offer in-game micro-betting as well, which enables players to bet on literally every play. In Europe, soccer games were found to have 70% to 80% of wagers were in-game bets. In the United States, live betting accounts for 40% to 50%. DraftKings hopes to boost that average this season.
DKNG Stock Is in a Daily Ascending Channel Pattern
An ascending channel is comprised of an ascending (rising) upper trendline resistance and a parallel ascending lower trendline support, indicating higher highs and higher lows.
DKNG commenced its ascending channel on Sept. 4, 2024, from $30.30. Higher highs and higher lows followed heading into the 2024 NFL football season. The daily anchored VWAP support rose to $38.35.
The daily relative strength index (RSI) hasn't been able to crack the 70-band as it pulled back to the 61-band. Fibonacci(Fib) pullback support levels are at $37.79, $34.47, $31.09 and $28.84.
DraftKings stock’s average consensus price target is $49.74, and its highest analyst price target is $60.00.
Actionable Options Strategies: DKNG stock entered the 2024 NFL football season with a full head of steam but still hasn't pushed into overbought territory above the 70-band, as evidenced by the RSI. Bullish investors can enter on pullbacks using cash-secured puts at the fib pullback support levels to buy the dip for a potential move to the consensus analyst price target.
Bullish options investors can limit the downside and profit from modest upside gains for less capital than owning the stock by implementing abullish call debit spread.
The article "DraftKings Is the Real MVP of the 2025 NFL Football Season" first appeared on MarketBeat.
