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DraftKings' In-Game Betting Could Be Very Profitable, Analyst Says

By Rhian Hunt - Updated Mar 18, 2021 at 9:33PM

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Many sports betting operators could cash in even more than expected because of this opportunity.

A group of analysts at J.P. Morgan agrees with online sportsbook operator DraftKings (DKNG 0.00%) that live, in-game "micro-betting" will add significant handle and profits to digital sports betting companies' activity, The Fly reports. The effects of in-game betting will likely prove "substantial," according to the analysts, and increase the sports betting market's size above the predicted $9.2 billion by 2025.

Headed by Daniel Politzer, the analyst group says micro-betting is a major driving force in profits for sportsbooks in England, where "in-game betting, and micro-betting in particular, are viewed as products that can help turn live sports into a more immersive gaming experience," Barron's reports. Politzer's team cites research indicating 75% of internet sports betting revenue in the United Kingdom comes from in-game micro-bets.

American paper money fanned out under a baseball

Image source: Getty Images.

In-game micro-bets are placed on live game broadcasts, offering odds on the next turn of play happening in the game. The J.P. Morgan team notes popular American sports, including basketball, baseball, and football, are well suited to the micro-betting model. Rather than featuring continuous play, these games frequently pause, giving participants time to place wagers on what they believe will happen next, a pattern Politzer refers to as an "accommodating cadence."

DraftKings has long maintained live, in-game micro-bets will provide a notable revenue stream.

Thus far, DraftKings' anticipated success from the March Madness basketball tournament has failed to materialize. However, J.P. Morgan expects a long list of sports betting providers may eventually benefit from micro-betting, including Caesars Entertainment (CZR -6.71%), which has been expanding into digital sportsbook activity even as physical Las Vegas gambling picks up, Barstool Sports partner Penn National Gaming (PENN -2.33%), and even Kentucky Derby operator Churchill Downs (CHDN -5.31%).

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Stocks Mentioned

DraftKings Inc. Stock Quote
DraftKings Inc.
DKNG
$13.86 (0.00%) $0.00
JPMorgan Chase & Co. Stock Quote
JPMorgan Chase & Co.
JPM
$120.09 (-1.71%) $-2.09
Penn National Gaming, Inc. Stock Quote
Penn National Gaming, Inc.
PENN
$30.20 (-2.33%) $0.72
Churchill Downs Incorporated Stock Quote
Churchill Downs Incorporated
CHDN
$186.10 (-5.31%) $-10.43
Eldorado Resorts, Inc. Stock Quote
Eldorado Resorts, Inc.
CZR
$47.95 (-6.71%) $-3.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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