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We are getting some big earnings from the sports betting industry in the coming days with DraftKings reporting on Thursday. You got FanDuel parent company Flutter Entertainment on Tuesday. So how can investors take advantage of opportunities in this space? We are navigating how to play the sports betting sector with the Yahoo Finance playbook. And joining us now is Jordan Bender, senior equity research analyst at Citizens JMP. Jordan, always great to see you and have you on the show. So, got some big names in your coverage universe getting ready to report. Jordan, got DraftKings Thursday. I got FanDuel's parent on Tuesday. What does their earnings setup look like, Jordan, heading into these prints?

Josh, good to see you. Yeah, you know, DraftKings Thursday, um, FanDuel on Tuesday. These are kind of the two bellweathers in the group. So, you know, really what we've seen uh I guess quarter of the day is how bad actually the NFL has started, and that's for the sports books. If you're a better, you've been winning a lot. We've been seeing a lot of the long-dated parlays winning, which is putting more money in people's pockets and less money in the sports operators pockets. And that's been a big topic of discussion. What we think will dominate the conversation going into earnings is what is the financial impact, you know, what are results in three Q, and then what would be the impact in the fourth quarter and what does that mean in 2025 as well. So, you know, that's that's kind of been the big topic of discussions and uh it's been a good start to the NFL season but not so much if you're DraftKings or FanDuel.

So that's interesting, Jordan, that's an interesting dynamic. So customer acquisition, I guess you're saying looks positive, but also betters are are winning a lot this NFL season. Just to be clear, you have buys on both those names, though, correct?

Yeah, that's that's exactly what we're seeing. Is customer acquisition and wagering has been extremely strong, um you know, since the start of the NFL season really in early September. So September data looks great. October from a wagering perspective actually looks pretty well. Um we expect to get more data in the coming weeks. But again, from a how much are customers winning perspective has been very weak coming from uh DraftKings and FanDuel. But to your point, we are buy-rated. We do think that underlying fundamentals are actually very, very strong within the sector. And what we call bad game outcomes or the favorites winning, which is what we're seeing here, these are just part of the online betting ecosystem. This is what investors have to learn to trade around. You know, these are, in theory, one-time events. This shouldn't impact results going into, well, it's November, December here, even 2025. So we think the setup for company like DraftKings and Flutter as well into 2025 look extremely promising.

Two other names you cover, Jordan, that that you like, MGM and Caesars. Now, they reported. Seems like investors were underwhelmed. What happened there?

Yeah, I mean, these are the kind of two ways traditionally to play the Las Vegas strip. Um, you know, both of those companies reported last week and both of them sold off pretty hard. They've been underperformers over the last week. And really what we saw on the Las Vegas strip, mainly for MGM, is in the prior year you had a lot of VIP players um show up. This year, not so much. And all it takes is five, six, seven people not to show up on the extremely high end of this to result in a lot of uh missed either revenue or EBITDA. And the swing for MGM year-over-year was about $80 million didn't show up between a couple players. So you know, that dynamic coupled with the fourth quarter looks like a tough comp, you know, F1 started in the prior year in Las Vegas. We have that again this year, but it's not going to be as big. The Super Bowl tough comp in the first quarter, not coming back to Las Vegas. So you know, we like the Las Vegas strip. We're maybe a little bit more cautious than previously going into earnings. Um but we think the setup for both Caesars and MGM um should be about flat to maybe slightly up in terms of earnings growth in 2025. Um, but I'd say, you know, our our view post earnings to now is maybe just a little bit more slightly hesitant on on the leisure and consumer side.

Final question, Jordan. Uh another name, Century Casinos. Just today, you go to a buy on that name. Why why the buy, Jordan? Maybe also your take just on the broader regional gaming sector.

Yeah, I think, you know, Century Casinos kind of fits into our play of how do you own regional gaming. So casinos outside of Las Vegas. You know, it's been a tough tough tough couple years for regional gaming companies. It's been very low growth. Um expenses eating away margins. For company like Century, we see them, you know, they've invested a lot of capex in the last couple years. That will start to pay off and will start to get returns uh in terms of EBITDA growth in the coming years. We think that it's extremely cheap, but we think it plays into this broader picture of you need to own names in regional gaming that have invested in the business either through uh organic uh, you know, capex or M&A. We also like a name, you know, Churchill Downs. That's a company that has invested into business. Uh it's at the top of it or the end of its investment cycle, and we expect it to reap the benefits um in '25 and '26 and further grow EBITDA and earnings from here. Jordan, always great to see you. Thanks for your time and those picks.