Sun. Nov 24th, 2024
ESPN vs. DraftKings. Which sports gambling app are you betting on? - The Boston Globe

With a powerful new competitor taking a seat at the sports-betting table next week, DraftKings is gambling that its full-featured app will keep rivals at bay.

Sports media giant ESPN and DraftKings rival Penn Entertainment are debuting their new gambling app, called ESPN BET, on November 14 in 17 states, including Massachusetts. Analysts expect a full-scale marketing blitz filled with offers for free and discounted bets to lure customers away from DraftKings and FanDuel, the current market leaders.

But DraftKings plans to stay above the promotional fray, according to chief executive Jason Robins.

“Definitely, we’ll stay disciplined,” Robins said on a call with analysts after the company reported third-quarter earnings last week. “We’ve seen multiple waves of competition. Last time we saw a huge wave of competition, we stayed disciplined. We didn’t increase our promotion rate and I don’t think we expect to do that this time.”

The Boston-based company has recently pulled ahead of FanDuel as the top app in the market for sports and other online gambling games. Analysts credit improvements to DraftKings’ app that allow for more betting on live events and for combining a series of bets into a parlay.

DraftKings’ stock, which has been on a tear all year, got another boost from the latest earnings report on November 2. Revenue jumped 57 percent to $790 million in the third quarter, better than analysts had forecast. And the company said its revenue could reach almost $5 billion next year.

The company’s stock closed at $35.10 on Monday, up 21 percent since the earnings report and more than tripling its price from the end of 2022.

“DraftKings has the momentum right now,” analyst Robert Fishman at MoffettNathanson noted on Friday. “This has been clear for most of the year and proven yet again with [third quarter] earnings and updated guidance.”

Robins also gave credit to a pop culture phenomenon for helping boost its results, at least a little bit. Bets on Kansas City Chiefs player Travis Kelce doubled since the star tight end started dating Taylor Swift, Robins said at the Global Gaming Conference last month. Asked if Swift’s presence at games might be affecting Kelce’s performance, Robins quipped: “He’d shake it off.”

Elsewhere in Boston consumer-tech companies, Wayfair executives said they expect fierce discounting for the holiday season. There’s no new competition — in fact, there’s less with Bed Bath & Beyond’s bankruptcy and sale to Overstock. com.

But with the slowing economy and higher interest rates, retailers are pulling out all the stops to attract buyers, Wayfair chief executive Niraj Shah said last week during an earnings call with analysts.

“Our merchandising calendar, everything we’ve worked out with suppliers, our merchandising plans reflect what we expect to be a very promotional season,” Shah said. “You can get that feeling right now. Pull up any of the apps. So you can see that we’re leaning in on that.”

Wayfair’s third quarter reflected the company’s first year-over-year sales increase in two years, as revenue increased 4 percent to $2.9 billion. That was slightly less than analysts expected. But Wayfair’s stock has gained amid the company’s second quarter in a row of profitability after excluding some expenses. The company went through rounds of deep job cuts in August, 2022, and in January.

Closing at $46.17 on Monday, the stock is up 8 percent since the November 1 earnings report and 40 percent for the year.

“The plans we set in motion during 2022 have come to fruition,” Shah said.


Aaron Pressman can be reached at [email protected]. Follow him @ampressman.

By Xplayer