Chad Beynon of Macquarie raised his 2025 online gaming gross revenue forecast given the growth seen in online casino and sports betting so far this year.
He now forecasts $31.6 billion in total iGaming revenue for the year, an increase of 25% from 2024. Beynon previously estimated a 20% increase in 2025.
Online sports betting accounts for a majority of the revenue forecast at $18.9 billion, up 25% from last year. Online casino revenue is expected to hit nearly $12.7 billion, a 24% increase.
Shares up despite negative headlines
Online gaming stocks in Beynon’s coverage have grown 12% in the past month despite negative headlines with multiple states raising sports betting taxes. That growth compares to a 4% increase in the S&P 500.
That growth comes mainly from stronger hold rates sportsbooks have seen in the second quarter, based on data from New York, Beynon said. He expects the online sports betting market to report around 11% hold for the second quarter, which could lead to record hold rates for DraftKings and FanDuel.
Caesars, MGM Resorts and BetRivers parent Rush Street Interactive should all report improved hold as well, he added.
Handle is up 15% so far in the second quarter compared to an 11% increase in the first quarter.
Online casino exceeding expectations
Online casino gross revenue should be up 30% in the second quarter, Beynon said.
That outpaces the 27% growth recorded in the first quarter and the 29% increase seen for all of 2024.
Beynon now forecasts a compound annual growth rate for North American online gaming revenue of 21% from 2024 through 2027, an increase from 19.8% previously.
FanDuel (26.7%), DraftKings (20.2%) and BetMGM (19.9%) remain the only three operators with double-digit online casino market share, according to Beynon’s estimates for May.
Top online casino, sports betting stocks
Beynon called out five specific stocks as his top picks for the online gaming sector.
Both Genius Sports and Sportradar offer “lower-volatility ways” to invest in the global sports betting market. There is strong upside for the market as the US continues to grow its live betting share, Beynon said.
DraftKings has the most upside from additional legalization throughout the United States. On a smaller scale, Rush Street Interactive is preferred for its lower exposure to sports hold and a “niche iGaming following” in key markets.
FanDuel parent Flutter is recommended as it is “unrivaled” in its global growth that is underpinned by “best-in-class products/hold” and a proven acquisition strategy.
