On Thursday, BMO Capital Markets maintained its Outperform rating on DraftKings Inc. (NASDAQ:DKNG) with a steady price target of $54. The firm's positive outlook is anchored in the ongoing shift to online sports betting and iGaming, despite potential challenges such as increased taxation in Illinois.
DraftKings' position in the online sports betting (OSB) and iGaming market is reinforced by recent state gaming disclosures. These disclosures revealed a significant growth in sports betting revenues, which surged approximately 33% during April and May. This marks an acceleration from the 25% growth witnessed in the first quarter of the year.
The successful launch of online sports betting in North Carolina has been a particular highlight, with the state quickly becoming a major player. In terms of OSB revenue, North Carolina ranked third and fifth in April and May respectively.
The analyst from BMO Capital emphasized the company's robust standing in the digital gaming space. With the transition to online gaming still in its early stages, the analyst sees considerable room for growth and adoption. This perspective supports the reiteration of the Outperform rating for DraftKings, reflecting confidence in the company's future performance amidst the digital transformation of gaming.
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