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Analysts at JMP Securities have highlighted that iGaming growth was partially offset by adverse sports betting results for US operators in Q1 2024.

JMP has released its Q1 2024 previews for US online sports betting and iGaming.

The analysts highlighted strong trends in gambling handle though Q1, alongside almost all-time high gaming margins in January.

However, February and March were impacted by unfavourable sporting outcomes which came after companies provided quarterly and yearly guidance estimates, they said.

JMP said this evened out into a “slightly unfavourable” sports betting impact for the quarter compared to expectations.

However, iGaming continued to grow during the quarter, the analysts pointed out, which would help to offset the negative impact from sports betting.

In the wake of underwhelming legislative sessions in 2024, JMP said it has updated its estimates to reflect fewer states coming online for iGaming than was previously expected.

Looking ahead to Q2 and Q3, the analysts said “solid” Q1 betting handle growth was a good omen for April, which will see operators benefit from the tail end of March Madness as well as the beginning of the NBA and NHL playoffs.

JMP added that it expects gaming operators to highlight improvements to gaming margins during these quarters, resulting from improvements in technology and product.

However, the analysts also warned this period presents some of the toughest comparative figures of the year.

DraftKings loses market share in Q1

The analysts previously said they believed DraftKings lost handle and GGR market share in Q1.

They pointed to the brand’s outperformance during the Super Bowl being offset by unfavourable sports outcomes during March Madness.

JMP said it expects DraftKings’ Q1 results to come in slightly below company expectations, albeit offset by a strong performance from its iGaming segment.

Going forward, the analysts said the company will likely focus on driving growth from its existing user base, while integrating the Jackpocket acquisition.

They added that DraftKings’ size and balance sheet could result in M&A within the in-game technology space.

Meanwhile, DraftKings’ main rival FanDuel was the winner in terms of market share for Q1, JMP said.

This, it added, was partly driven by a more promo-heavy January. Gaming margins were also seen to accelerate during the quarter.

Finally, the analysts projected that sports betting and iGaming will grow at an annual rate of 14% and 17% respectively between 2023 and 2028.

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