Macquarie Confident in Growth of US iGaming Sector Amid Booming Revenues

Positive Outlook for the US iGaming Market

Macquarie, a prominent financial services company, has expressed a strong belief in the promising future of the US iGaming industry. Despite challenges faced by the broader sports betting market, the online casino segment is showing considerable strength and potential for growth.

Current State and Growth Trends in iGaming

Although sports betting has become widely available across more than half of the US states, the presence of iGaming remains more limited. Nevertheless, recent financial results reveal that the iGaming sector is not just growing but outperforming expectations. In the first quarter, the overall earnings before interest, taxes, depreciation, and amortization (EBITDA) for online gambling exceeded projections by approximately 9%, highlighting a robust and expanding market.

Within this space, companies involved in iGaming are experiencing faster growth compared to those focused on sports betting. For example, Rush Street Interactive (RSI) has surpassed earnings forecasts by 25%, prompting Macquarie to revise RSI’s 2026 EBITDA predictions upward by 9%. Similarly, Super Group has exceeded expectations by 5%, leading to a modest increase in their forecast.

Conversely, major sportsbooks like DraftKings and Flutter, known for FanDuel, have had to lower their EBITDA forecasts for the upcoming year. Macquarie attributes this contrast to several challenges faced by sportsbooks, including volatility in betting markets and pressures linked to prediction markets.

Industry analysts suggest this divergence signals stronger underlying growth dynamics and clearer profit margins for iGaming companies compared to sportsbook operators.

Impact of Earnings Forecasts on Stock Performance

While examining market responses, Macquarie noted an interesting disconnect between changes in earnings forecasts and movements in stock prices. For instance, Sportradar experienced a significant 23% drop in its share price, despite only a slight 1% reduction in projected EBITDA. On the other hand, positive earnings revisions tend to boost investor confidence substantially; RSI’s upward earnings revision of 9% led to a remarkable 22% increase in its stock price.

This gap between earnings projections and share price movement suggests that factors beyond just forecast changes influence investor behavior. Nevertheless, Macquarie maintains an optimistic stance on RSI’s future prospects and has raised its target price for the company to $30.