DraftKings is pushing towards hitting EBITDA profitability in 2024. However, analysts at Roth MKM suggest that while the company has accelerated its cost-cutting measures, it may still struggle to reach EBITDA margins of even 20% due to high fixed costs and “sticky” gross costs such as taxes. Even if DraftKings’ market share expands, Roth does not believe EBITDA margins can reach 20% unless industry gross gaming revenue (GGR) reaches $30bn or higher. Roth also notes that for DraftKings to reach its long-term gross margin target of 56%, it would need an uptick in newly regulated states to balance out the 51% in New York, which may be challenging given the recent legislative committee hearing. Finally, Roth suggests that DraftKings’ more optimistic gross margin expectation compared […]

The gaming REIT market is thriving, according to VICI and GLP. VICI CEO Ed Pitoniak remarked that around 40% of the gaming industry has been “REITed”, while about 70% of the mall space is REITed. He added that the company is eager to engage in more business opportunities. COO John Payne expressed VICI’s bullish bet on the deal to acquire the Venetian when the Las Vegas market was uncertain. He also highlighted the unique experience offered by the Las Vegas market that consumers could not find a replacement for. The acquisition of MGM Growth Properties and four properties in Canada followed the Venetian deal. However, Pitoniak cautioned about the lack of visibility in the year ahead, citing tightened credit conditions. Despite this, analysts at CBRE […]