NFL betting kicks off Thursday, the most important stretch of the year for sports betting apps and their stocks.
After years of parlay-fueled gains, investors are closely watching whether betting growth is slowing, margins are maxed out, and if challengers like Fanatics can chip away at DraftKings and FanDuel’s duopoly. Stifel called NFL betting “seasonally critical” for operators, while Citizens added “stocks will move up on positive game outcomes” after sportsbooks endured unprecedented week-to-week losses last season.
NFL betting slowing down?
Industry-wide handle growth has cooled from 2024’s 15% to 30% surge to high-single and low-double digits late last year. Jeffrey Stantial, managing director of gaming and leisure at Stifel, expects that slower pace to persist “with more downside than upside risk.”
He described betting firms as victims of their own success, pointing to tougher comparisons after a year of rapid growth, operators pulling back on promotions,and tax hikes that have forced tighter spending.
Citizens is more bullish, projecting $39 billion in football bets through the Super Bowl, including $13 billion in parlays, about one-third of all wagers. If sportsbooks can ramp up parlay penetration even more while attracting more legs on bets, that “should drive stocks over the next two quarters,” wrote Jordan Bender, a senior equity research analyst at Citizens.
Sportsbooks balance market share goals
DraftKings enters the season having grown live betting handle 16% year-over-year last quarter. Analysts cautioned that while the growth is encouraging, live bets tend to carry lower margins because they often replace parlays, which historically deliver higher hold rates.
BetMGM has held steady around 7% handle share since late 2024, but “latency remains by far” its biggest hurdle Stantial said. NFL season will test whether recent app upgrades can close the gap with DraftKings and FanDuel or if it remains a drag on retention, he added.
Meanwhile, bet365’s U.S. share has stalled in the mid-single digits after cutting promotions earlier this year, which analysts say could be the breadcrumbs of a potential sale.
Can anyone crack the duopoly?
DraftKings and FanDuel control about 70% of U.S. betting. If anyone is going to ever make a dent, this NFL season is critical.
“Privately-held Fanatics appears best-positioned given a clear number three OSB product and sustained above-market promo investment,” Stantial said. He cited Fanatics’ willingness to spend around 6% of handle on promotions in reporting states, its FanCash rewards program and recruitment of VIP bettors as supporting factors.
Bet365 has built one of the strongest live betting products, but analysts said its retreat from promotional spending could make it difficult to build on that progress. Without re-accelerating investment during the NFL season, they say its market share likely stays capped.
Penn faces the most immediate pressure, in analysts’ eyes. The company has until the late-2026 mutual opt-out in its ESPN partnership to prove the deal is sustainable. ESPN Bet holds about 3% of handle share entering its second football season. Analysts will be closely watching whether recent ESPN integrations and deeper fantasy tie-ins can boost results or if both sides likely walk away.
Caesars has narrowed the product gap and will test a new universal wallet in Nevada this season, according to Santial. With promotions at 1% to 2% of handle compared with 3% to 5% at peers, analysts called its ceiling for growth limited. Other “tier-two operators” are unlikely to shift the national picture. Bally’s has pivoted to an iCasino-first strategy in Rhode Island, while Rush Street Interactive‘s BetRivers holds steady near 2% of handle, seeing much stronger iCasino results.
NFL betting competing with prediction markets
Alternatives such as prediction markets and new fantasy formats are drawing attention, but analysts said they are unlikely to affect sportsbook stocks in the near term. The products are mostly limited to non-betting states and carry thinner margins than regulated sportsbooks.
Kalshi reported $87 million in trades during the first weekend of college football, its fourth-highest day ever. Robinhood and Underdog are both pushing into sports prediction contracts outside betting states. Meanwhile PrizePicks, Betr and FanDuel have shifted their pick’em games to peer-to-peer formats to reach more states without legal sports betting.
Stifel called these platforms “a curiosity” compared with the bigger questions facing sportsbooks this NFL season, writing that prediction markets are “too basic for near-term adoption.”
Citizens added that DFS+ products like peer-to-peer pick’em may help companies grow customer databases in untapped states but still are not expected to drive stock performance.
