written by reader Us gambling

By exfool, April 22, 2021


You bought a ROKU set which you are very impressed with and you saw the number of Chewy boxes on local doorsteps increase dramatically during lockdown.
An extremely good base from which to make investment decisions you said, try the product before you buy the stock. So true.
Iā€™m seeing an extraordinary growth in YouTube presenters researching and endorsing DraftKings as a product. Would you mind giving us a bit of a deep dive into Draftkings in particular and the gambling sector as a whole?
I followed you in with GAN by the way

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Travis Johnson, Stock Gumshoe
April 23, 2021 9:09 am

I regret selling DraftKings after that first post-SPAC merger surge, and they are emerging as the strongest brand — though part of that’s because I’m in Massachusetts, FanDuel is stronger in some markets. The valuation has been at “just hold your nose and buy growth” levels for a long time, partly because sports gambling hasn’t historically been all that profitable (though that may change as the market evolves, the crazy online bets are higher-margin for the casino than “traditional” sports bets). It’s been in the back of my mind for a while, and certainly among the ways to play the unstoppable trend of spreading sports gambling legalization, but it’s mostly a “brand” bet and it’s really hard to know whether this will be a “winner take most” industry like most of technology, or if it will be very competitive. So far it’s pretty competitive, with folks like BetMGM and Caesars getting their act together and smaller tech providers like Kambi, GAN and EVO helping small casinos hold their share, but there is a chance for a national oligopoly to emerge… which would make the valuation of DKNG seem more rational.

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šŸ‘ 17870
Chewy
Irregular
Chewy
May 10, 2021 10:20 am

Hi Travis, would you consider DraftKings at these levels?

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Travis Johnson, Stock Gumshoe
May 10, 2021 12:22 pm
Reply to  Chewy

Would I consider it? Sure, they have the potential to build the leading brand in a growing space. Opinions are easy to have, though…. Have I bought it? No.

Maybe I will someday. Still very richly valued, as it has always been, still could potentially be in an insanely competitive space for a long period of time as big brands try to stake out their market share.

šŸ‘ 17870
Chewy
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Chewy
May 11, 2021 4:48 pm

Many thanks Travis

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