Fears about new market entrants threatening the positions of Entain PLC (LSE:ENT)’s BetMGM and Flutter Entertainment PLC (LSE:FLTR)’s FanDuel in the US are overdone, according to Citibank.
“We’ve seen heightened media/investor attention on new US Online Gaming players (Fanatics, ESPN Bet) hoping to make a dent in leading operators’ market shares this NFL season.
“In our view, however, this will be difficult to achieve.”
Ongoing promo/marketing investment from leading operators is already US$2.8 billion at Flutter and US$2.5 billion at DraftKings, another well-ensconced online gaming business, estimates Citi.
“To match the pace of leading operators’ investment, new entrants are likely required to invest billions on customer acquisition/retention each year.”
Citi adds it sees this as unlikely, and as such has left its long-term (2030) US market share forecasts unchanged at 32% for Flutter and 18% for Entain.
The US bank is a buyer of both, which helped Entain edge up to 1,163p today and Flutter 2.2% to 13,670p.