Benzinga | Dec 21, 2021 11:16AM EST

Analyst Reports 'Surge' In Online Sports Betting

Online gaming stocks have taken a big hit in recent months, but Bank of America analyst Shaun Kelley said there was a "surge" in U.S. online sports betting (OSB) revenue in November.

The Numbers: Total digital gross gaming revenue (GGR) in November was up 25% month-over-month and 129% year-over-year to a $665 million annual run-rate, Kelley said Tuesday. November OSB GGR jumped 81% M/M and 171% Y/Y to a $320 million annual run rate.

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"We believe that these GGR figures could create upside to Q4 estimates," Kelley said.

Major Markets: At this point, the lion's share of the OSB and iGaming market share is concentrated in just a handful of top names. In fact, in the top three OSB states (New Jersey, Pennsylvania and Michigan), the top five companies generate about 90% of the total GGR, Kelley said.

Flutter Entmt ADR (OTC:PDYPY) subsidiary FanDuel was still the market share leader in OSB in the top three states in November, accounting for 45% of total GGR.

Draftkings Inc (NASDAQ:DKNG) was a distant second in those three markets with 21% OSB market share, but DraftKings gained 1% share in November while FanDuel lost 2% share.

MGM Resorts International (NYSE:MGM) had the third-highest OSB market share at 11%, down 3% compared to October. Penn National Gaming, Inc (NASDAQ:PENN) subsidiary Barstool's OSB share gained 2% to 8% of the total. Caesars Entertainment Inc (NASDAQ:CZR) OSB market share was flat month-over-month at 3%.

Benzinga's Take: DraftKings, MGM and FanDuel are the three clear national market share leaders in both OSB handle and iGaming GGR. In the past three months, Flutter shares are down 26.5% and DraftKings stock is down 51%, while MGM shares have held up relatively well, gaining 1.9%.

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