“I have already made up my mind, don’t confuse me with the facts….” Philip A. Fisher, legendary investor
Since the 2018 SCOTUS decision, the sports betting sector has been churning like a tempest, blowing some boats to distant shores of paradise and others sitting in dead pools with few fair winds still on the way. Investors traded up some stocks to eyebrow raising valuations, leaving others to inch up or down a point here or there with no propulsion in sight. Some of the pom pom waving has been understandable. Month after month the stamp of approval of sports betting in one state legislator after another have sent retail investors chasing those stocks. Few pay attention to the realities of what was swiftly developing as an overcrowded sector and a raft of growing operating losses in a turbulent sea of giveaways.
No one disputes the bullish long-term prospects for what will be no more than a handful of companies thar will ultimately dominate the sector. We can certainly expect consolidation by acquisition or merger of the near 20 reasonably viable companies now engaged in chasing down new sports bettors with beggaring thy neighbor marketing.
Eventually we will have perhaps four or five operators gobbling up to 70% of the market or more, with all the others nipping at their heels with single digit crumbs. Flutter, now through its Fan Duel site and its other branded apps, will continue to lead the pack. A bet on Flutter (OTC:PDYPY) now is as close to a mortal lock as you can get as the game of US sports betting unfolds.
Until then it’s a dogfight. The question for investors now is what are the keys that should guide buy side decisions?
Last month (Nov, 16) we made the general case for Flutter Entertainment
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