Gaming shares navigate information, regulation and money movement

Gaming and playing shares are navigating a shifting panorama as prediction markets, sports activities betting information rights and regulatory uncertainty reshape investor sentiment. Analysts say sector fundamentals stay stable, whilst valuation strain persists amid questions on how new betting codecs may have an effect on conventional sportsbooks.

BNN Bloomberg spoke with Jordan Bender, director of gaming, on-line gaming and gaming expertise analysis at Citizens, about his high concepts in gaming and playing, together with a sports activities betting information supplier with deep ties to the NFL, a serious on-line sportsbook operator and a diversified gaming firm positioned for improved free money movement.

Key Takeaways

• Sports betting information suppliers are more and more seen as infrastructure performs, supplying important expertise and information that energy sportsbooks fairly than competing for customers.
• Investor issues round prediction markets have pressured gaming valuations, although obtainable information suggests restricted cannibalization of conventional sports activities betting to this point.
• NFL information rights stay a essential driver of income and strategic worth for betting expertise firms tied to skilled sports activities leagues.
• Large on-line sportsbook operators could profit from prediction markets by integrating new merchandise fairly than dropping market share.
• Free money movement inflection factors, following years of heavy capital spending, have gotten a key catalyst for diversified gaming firms with brick-and-mortar property.

Read the complete transcript beneath:

ANDREW: Let’s get to some Hot Picks. This time, we’re trying on the playing and gaming business. Our visitor has Genius Sports, a betting information specialist, as a high decide. We’re joined by Jordan Bender, director of gaming, on-line gaming and gaming expertise analysis at Citizens. Thanks very a lot for becoming a member of us. It’s a scorching space and an exploding business. Tell us what Genius Sports does and why they caught your eye.

JORDAN: Yeah, it’s good to be right here. Thank you. So Genius Sports is the picks-and-shovels of the business. So the net sports activities betting and that iGaming business within the United States and up in Canada look extraordinarily robust. Fundamentals look good. And that is the again finish, what drives plenty of these sportsbooks.

So it’s an organization that’s rising income 20 per cent-plus. It’s rising EBITDA on the backside line. Margins are increasing. And we expect that is sort of the components and the setup in 2026. And buyers are this area and going, how will we play the sports activities betting business? And we expect that is the most secure method.

The inventory has pulled again right here. There’s prediction market — plenty of prediction market discuss throughout the business — and the overhang. We suppose Genius has been unfairly valued due to this overhang. So on the pullback, we expect that is — 2026 goes to be a beat-and-raise story.

So they put out 2028 targets again in September at their investor day. As we progress by means of the 12 months and the corporate beats and raises, we expect that’s what’s going to result in share appreciation and have valuation go from about 11 instances at the moment as much as our goal round 17 instances EBITDA.

ANDREW: And what do you — sorry, Jordan — you check with an overhang there. Can you simply make clear that?

JORDAN: Yeah, there’s simply, you already know, a thought on the market that prediction markets are going to cannibalize the authorized on-line sports activities betting business, and an organization like Genius wouldn’t be wanted in that case.

ANDREW: That’s wonderful. So the prediction markets are — they’re shouldering their method into the sports activities betting market?

JORDAN: Yeah. And they’re going by means of a unique sort of framework within the U.S., which is how they’ve sort of exploded during the last 12 months. And primarily, you already know, as a result of it’s not really conventional sports activities betting, if the business begins to maneuver in direction of prediction markets, you gained’t want an organization like Genius, or that’s at the very least what the bears within the business are speaking about as of at the moment.

We suppose that’s overblown. We suppose it’s not true. And what the information is telling us is that the cannibalization influence isn’t wherever near how these shares needs to be buying and selling.

ANDREW: That’s attention-grabbing. And I believe you touched on this, however the NFL relationship you suppose is extraordinarily invaluable for Genius.

JORDAN: Yeah. And, you already know, actually what buyers come to us speaking about is, how is Genius built-in into the NFL? And that is what’s going to primarily make or break this firm.

They have the rights to the NFL to promote that information to the sportsbooks. So, you already know, they’ve the sports activities betting part they usually have the media integration part, so that they’re serving to advertisers promote throughout the NFL. And with that, the NFL is a rising sport within the U.S. It is dominant. And we expect it’s a by-product play off of the well being of the NFL right here.

ANDREW: Let’s transfer on to DraftKings, one other huge participant in sports activities betting, they usually have a partnership with ESPN.

JORDAN: Yeah. So Genius is the back-end a part of the ecosystem. DraftKings is the entrance finish, the B2C firm. So DraftKings, in our view, you already know, because it sits right here at the moment, it appears to be like like they’re beginning to achieve share.

They are the primary — you already know, given the day — the primary or the second largest sports activities betting firm within the United States and Canada. You know, from their place, as a result of, you already know, we expect they’ve the partnership with ESPN that began Dec. 1.

We suppose they’re beginning to take some share that leads into the primary quarter with simple comps, after which into the center a part of the 12 months, which is a sports activities calendar that’s much less unstable now that we exit the NFL.

So from a setup perspective, we like DraftKings right here with the valuation the place it’s buying and selling. Again, it’s been caught up within the prediction market overhang. For them, it really needs to be a profit. They launched their very own platform, and we expect they’re going to — finally, it’s going to be a web, web constructive.

ANDREW: That’s actually attention-grabbing. So Kalshi could be one of many huge prediction markets. Are they — who regulates them anyway? Is it a little bit of a gray space?

JORDAN: As of at the moment, it’s technically authorized. They function by means of the federal stage. In the CFTC now, there’s this large ongoing debate of how authorized is it for them to supply sports activities contracts. That’s why they’ve exploded.

They’ve sort of discovered a solution to get into all 50 states throughout the United States and provide a sports activities betting-type product. Ultimately, it’s going to bounce by means of the courts and finally find yourself within the Supreme Court. And that’s the last word decision-maker proper there.

ANDREW: And then your remaining thought right here is Churchill Downs. Are we — we’re speaking about far more than racetracks right here, although?

JORDAN: Yeah. You know, everybody may know Churchill Downs for the Kentucky Derby in May, however, you already know, as of at the moment, that solely sits about 15 per cent of their earnings.

And in recent times, they’ve invested some huge cash into the opposite a part of the enterprise. So they’ve casino-type choices. And, you already know, the setup for the inventory is, it’s traded flat for the final 5 years, however they’ve gone by means of an enormous capex cycle, M&A cycle.

And as we sit right here, that’ll begin to pull again for the primary time in a very long time. As capex falls, we expect this firm goes to begin producing plenty of free money movement, and that’s going to assist the stability sheet of the corporate.

And if we expect that’s what buyers are going to need right here from a bellwether — a really clear firm throughout the gaming area.

ANDREW: And simply inform us — what else are they doing? They’re concerned in digital roulette. How does that work? Are these machines, or is it on-line roulette?

JORDAN: Yeah. So about half of their enterprise is definitely conventional brick-and-mortar casinos. So such as you would see in regional markets or in Las Vegas.

There’s one other piece of it that they provide — gaming in a slot machine that has completely different back-end economics. You know, we like to only inform individuals it’s casinos. So, you already know, the overwhelming majority of their enterprise really sits inside brick-and-mortar tables and slot machines.

ANDREW: Thanks very a lot, Jordan. And actually, what a panorama. We’re tight for time, however I imply, the explosion of on-line gaming in recent times, and the willingness of sports activities leagues to truly embrace playing.

JORDAN: It’s a wild business. And it’s at all times — it’s one thing new each day.

ANDREW: Jordan, thanks very a lot certainly. Really recognize it. I hope you may come again quickly. Jordan Bender has been our visitor there. And yeah, it truly is unbelievable how governments have, over the previous decade or so, simply loosened the management on playing.

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This BNN Bloomberg abstract and transcript of the Jan. 22, 2026 interview with Jordan Bender are printed with the help of AI. Original analysis, interview questions and added context was created by BNN Bloomberg journalists. An editor additionally reviewed this materials earlier than it was printed to make sure its accuracy and adherence with BNN Bloomberg editorial insurance policies and requirements.