Earlier this week, DraftKings (NASDAQ:DKNG) announced it’s the official partner of Amazon’s (NASDAQ:AMZN) Thursday Night Football broadcast. At least one analyst says the accord could have meaningful implications for the sportsbook operator’s same-game parlay offerings.
An advertisement for Thursday Night Football. An analyst says a deal with Amazon could benefit DraftKings. (Image: ClutchPoints)
Under the terms of the accord, the gaming company will provide pre-game and live odds during the games streamed by Amazon. The first Thursday Night Football broadcast on Amazon Prime Video arrives tomorrow, when the Los Angeles Chargers travel to take on their AFC West rival Kansas City Chiefs.
In a note to clients today, Oppenheimer analyst Jed Kelly said DraftKings’ agreement with Amazon could set the stage for the sportsbook operator to speed along its same-game parlay platform.
Quick same game parlays (Quick SGPs) — pre-packaged same game parlays bets available across NFL, college football, NBA, college basketball, Major League Baseball (MLB), NHL and soccer,” according to the gaming company.
Last week, DraftKings said it’s allowing bettors to compile same-game parlays across multiple sporting events. For example, a client could piece together a same-game parlay on DraftKings with two legs from Sunday’s Cleveland Browns/New York Jets game and another two legs from the Baltimore Ravens/Miami Dolphins tilt later that day.
DraftKings Following FanDuel Template
FanDuel, which is the largest online sportsbook operator in the US, rolled out a similar spin on same-game parlays last December.
Oppenheimer’s Kelly said DraftKings’ relationship with Thursday Night Football could pay dividends. That’s because FanDuel reaped same-game parlay benefits from its partnership with TNT through that network’s broadcasts of Thursday night NBA games.
The analyst noted FanDuel branded its same-game parlay around those broadcasts. Data supports the point that by offering a free $10 bet to clients, the sportsbook operator was able to compel more bettors to embrace same-game parlays and bolster its handle on such bets.
FanDuel partnered with TNT Thursday night NBA broadcasts over the past two seasons. Kelly forecasts similar rewards for DraftKings by way of the Thursday Night Football deal. The analyst rates DraftKings stock “outperform.”
Important Financial News
DraftKings shareholders that are eagerly awaiting a more rational spending environment and profitability, take note: Kelly says the costs the gaming company is incurring by way of the Amazon deal are already factored into the 2022 guidance the sportsbook operator revealed last month.
The firm forecast 2022 revenue of $2.08 billion to $2.18 billion, up from a prior outlook of $2.05 billion to $2.17 billion. That implies year-over-year revenue growth of 60% to 68%. Analysts were expecting $2.1 billion. Boston-based DraftKings sees a 2022 EBITDA loss of $765 million to $835 million — better than the previously forecast loss of $810 million to $910 million.
Separately, Guggenheim analyst Curry Baker lifted his DraftKings price target to $34 from $31 while reiterating a “buy” rating on the stock. Baker cited a more conservative promotional spending climate and robust daily average user data, among other factors, in boosting the price outlook on the gaming stock.
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