U.S. Digital Gaming: That Escalated Quickly

Research evidence excerpt

U.S. Digital Gaming: That Escalated Quickly

Barclays | U.S. Digital Gaming

DKNG PM volumes should continue to accelerate sequentially from here, on its rapid build out

of markets/offerings, the World Cup, as well as the layering in of exchange fees starting in June;

and 3) FLUT likely picking up PM traction over the summer as well. Lastly, while much less

important than the attention that it gets, it doesn't hurt that the NBA Finals have likely

accelerated NY weekly OSB handle data (and the stocks have been down materially when this

data point swings negatively).

To frame up valuation, DKNG/FLUT now trade at 13.6x/9.1x 2026E ex-prediction spend, which

we think embeds an unreasonably high risk-factor for its existing business in addition to

little future growth for the companies overall. Looked at another way, despite FLUT/DKNG

maintaining the lead two market share positions in US iGaming, their sports-heavy mix is clearly

weighing down valuations (due to the exposure of perceived PM risk in sports), whereas

iGaming-heavy peer RSI (not covered) trades at ~20x consensus estimates (after a long run of

beats, to be fair). Still, applying an RSI-multiple to our fair estimation of DKNG/FLUT iGaming

business contributions, we believe FLUT/DKNG's sports businesses are effectively being valued

at just ~6.1x/7.3x 2027E EBITDA (regional casino multiples).

See our recent reports for more on:

• DKNG PM revenue implications - You Have to Start Somewhere; 09 June 2026 *Note we've

since layered in Exchange fees within this note's version of that chart*

• PM Market making deep-dive - [Market] Making a Move; 29 May 2026

• PM OSB momentum shifts favor incumbents - Predicting a Shift; 6 May 2026

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