Taylor Swift boosts record Super Bowl betting, DraftKings and FanDuel benefit

Sports betting companies are expected to see significant gains during this weekend's Super Bowl, with DraftKings and FanDuel leading the way, according to a note from Bank of America. The anticipated betting activity for the game between the Kansas City Chiefs and the San Francisco 49ers is predicted to reach $1.5 billion, a 35% increase from last year's record amount.

DraftKings and FanDuel are projected to benefit the most from this surge in betting, as they make up the largest portion of the sports betting industry, accounting for about 70% of the market in the third quarter of 2023. BofA equity strategists believe that increased offerings of same game parlay and prop bets will help support win rates for these companies.

In addition, the expected attendance of Taylor Swift at the Super Bowl may further boost betting activity. The pop star has previously been shown to have a substantial financial impact on industries, with revenue per available hotel room increasing by an average of 31% in cities she has toured through.

Sportsbooks are capitalizing on Swift's presence by offering Taylor Swift-themed prop bets, particularly related to Travis Kelce's performance. Examples of these proposition bets include wagers on Kelce scoring a touchdown in each half or even proposing on the field.

DraftKings' stock price currently stands at $43.67, with a 185% increase over the last 12 months. While FanDuel is not publicly traded, its parent company Flutter became an NYSE-listed company in late January, with shares rising over 35% in the last year.

Commercialized sports betting has become a $10 billion sector since the Supreme Court legalized it in 2018. Goldman Sachs predicts that the industry is still in the early stages of expansion, with only half of US states having approved mobile sports betting. Ben Andrews, Head of Leisure and Travel Research at Goldman Sachs, estimates that American spending on wagers will eventually reach $45 billion per year.

Notably, famed short-seller Jim Chanos closed his short position on DraftKings in July 2022, citing the surprising tendency of US gamblers to place "bad-odd bets" that do not wager on clear outcomes. Chanos believes that this characteristic of American bettors will benefit sports betting companies in the long term.


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