The sports betting industry is in focus after several big-name companies in the space reported financial results last week, including DraftKings, Caesars Entertainment, MGM, and Penn National Gaming, with each telling a slightly different story. While Caesars and Penn forecast weaker growth, DraftKings did the opposite, raising its full-year 2022 revenue guidance to a range of $2.08 billion to $2.18 billion. Brett Sifling, Director of Get Invested for Gerber Kawasaki Wealth & Investment Management, joins Cheddar News' Closing Bell to discuss.

Closing Bell

Sports Betting Industry in Focus After DraftKings Raises 2022 Revenue Gudiance

well, let's turn the biz of sports, the sports betting industry and focus after several big name companies in the space reported financial results last week, including draftkings, CAesar's MGM and Penn National Gaming. While caesars and Penn reported weaker than expected growth. Draftkings did the opposite actually raising its full year 2022 sales guidance. Let's take a look at shares of draftkings to see how they're doing And as we do that, I do want to welcome in our next guest. Draftkings of 2% today Brett sit fling with Gerber, Kawasaki wealth and investment management Brett thanks so much for coming on. What are your thoughts on this differing guidance? Mixed messages that we're getting from the sports betting world. It's certainly interesting because, you know, it's really driven by the digitalization and also the legalization of sports betting and so you're seeing companies like Penn who has that drag of the casinos in person, have a lot of different guidance and someone like Draftkings who has completely gone digital and looking at, you know, 30% growth in paying customers as well as the 30% growth in the revenue that they're extracting per customer. So these companies have had a lot of capital expenditures up front and it's starting to slowly pay off for them as we see these reports come out. Okay, so it's clear that digital is important, obviously marketing important as well. What do we know about customer acquisition bread that might put a company like draftkings in a better position, You know, it's, it's clear that young people want to bet on their phones and they would rather do that than go into the sports book, it's not necessarily a huge different experience by turning your ticket in in the ring. And so I think that, you know, bar stool with pen obviously has a huge influence on the younger people, but with sports returning to the stadiums I think is the most important part because with sports returning, you're having these leagues actually embrace sports betting for the first time. You look at the tv screen, you have the lines of the games up there, you can bet on individual players and the announcers or even, you know, talking about these bets in the game. So I think that that, you know, embraces really driving it across the society. Mhm. Now, in terms of the NFL, I know that that at least for draftkings right, is the money maker? It's where we see the most bets wage the Super Bowl a big event as well, Even more so than major sporting events like the olympics per se. Um as we've learned in the past, any expectations bred as to what this NFL season might hold. I think that it's probably gonna be one of the best seasons. I mean sports are back, right, people have this pent up demand to not only just go to the games, but also bet on the sports because it is such a cheap way of having entertainment. Um you know, I I do have a little bit of worries from the recessionary side of this, if people do have less disposable income that might influence their sports betting habits and so we'll kind of see how that rolls out over the next, especially as we get into football season. Okay, the economy slowing down a bit, but we're starting to see a turnaround in the stock market. The expectation is that the consumer price data is going to come down a little bit potentially after peaking in june when we get that july report this week as well. And the jobs market still is holding up Brett any indication as to how the economy, overall economic sentiment and performance actually impacts this sector. I think it will in the short term. Again, you know, people don't have as much money at the end of the month, they might, you know, think twice about putting that bed in. Um, but really, I think the story here is as states legalize this over the next 3 to 5 years, it's gonna be a great driving force. Like I live in California here in Los Angeles, I can't even place a sports bet on my phone where most, you know, a lot of the other states can, and so, you know, there's actually a bill that's upcoming here in november in California, that might change that and that would, you know, along with two other states, bring up close to about 40 million participants into that ecosystem. So when you look at that versus maybe a slight slowdown in consumer spending, I think that, that, you know, story has a lot greater footing, so bread, it sounds like you do see a clear winners out perf formers showing off obviously in this industry with football season upon us set to kick off soon more dollars going to the sports betting venues, whether it's digital or actually the sports betting book itself. Do you think we might see some consolidation in this space, what business activity could be in the future? Uh, whenever there's, you know, a sell off these stocks, especially the growth stocks, like we've just seen, there's always a chance that a competitor, maybe like MGM who has their bet MGM app or, or someone who is very well capitalized that wants to get into the space, scoop someone smaller up. Um, it's not necessarily something that we want to bet on. We kind of, you know, like having our, our few companies that we own specifically, MGM is our favorite here with the refresh coming later in the year. But acquisitions are definitely possible in this, you know, public equity market that sold off quite a bit. I'm just curious. I mean, we've been discussing for a while now, Brett how popular football is among some of these sports betting apps and venues, what do you think it's gonna take for other leagues or other athletes to actually get some traction on some of these platforms. It's, I think as the States continue to legalize it, it's going to become more common now with that being said, we have to remember that sports betting is extremely addictive, right? And it could be detrimental to a lot of people's lives. And so if we don't see proper regulation and we don't see the proper oversight for these leagues, then ultimately we could see States kind of rolling that back. And so I do think that that's a huge risk. But if they do it the right way, I think that leagues will become, you know, more accepting of, you know, the entertainment that it provides because it's a lot of fun. And at the end of the day, that's what sports are all about, is making sure that you have fun and you're entertained. All right, Brett sniffling with Gerber, Kawasaki wealth and investment management, Brett, thanks so much for coming on.