The online gambling & sports betting industry has transformed the way we invest in 2026. Since its rapid expansion, analysts continue to discuss these three companies: DraftKings (DKNG), Flutter Entertainment (FLUT) and Penn Entertainment (PENN) with an entirely new lens. The rush to obtain new states’ licensing rights has come to a close. Now it is time to focus on making money, gaining market share and expanding internationally. This article will outline how each company will perform as we enter the second half of 2026; and what you should watch out for when investing.

At a Glance: iGaming Stock Snapshot (Q2 2026)

DraftKings (DKNG): Grinding Toward Profitability

Ticker	Company	Exchange	Approx. Price (Q2 2026)	52-Week Range	Market Cap
DKNG	DraftKings Inc.	NASDAQ	~$42	$28-$51	~$19B
FLUT	Flutter Entertainment	NYSE	~$238	$180-$260	~$47B
PENN	Penn Entertainment	NASDAQ	~$17	$13-$24	~$2.6B

DraftKings has made a dramatic transformation over the last 3 years from an “at all costs” growth model to a “sustainable growth” model that is beginning to show fruit. Following the Company’s first full year adjusted EBITDA profitable in 2024, the Company has reduced GAAP loss while improving hold percentage which represents the portion of the betting revenue kept as a result of better promotional control.

For the First Quarter ended March 31st 2026, DKNG reported:

• $1.4 billion of revenue representing an increase of 18% compared with prior year;
• ~400 basis point improvement in adjusted EBITDA margins;
• A record monthly unique players (“MUP”) of 3.8 million; and,
• Improvements in structural hold due to increased use of same game parlays.

While there have been several positive developments for DKNG during 2026, the largest development was in the iGaming vertical. Currently, online casino generates approximately 30% of the Company’s overall handle and contributes positively to profitability when both sports wagering and online casino products are available in a given market. DraftKings has developed strong offerings for slot games and live dealer content. Additionally, DraftKings has successfully utilized its loyalty program, Crown, as a true retention tool.

Bear Case: DKNG continues to be a valuation risk. Although the price has retreated since 2021, the current price remains significantly higher than earnings. As mentioned previously, achieving GAAP profitability will require the elimination of stock based compensation expense. A negative regulatory outcome in one or more of the large markets could also negatively impact the Company. Competition from Flutter’s FanDuel does not appear to be diminishing.

Buy / Overweight Consensus among Analysts: The consensus estimate among analysts is mostly Buy / Overweight. Most estimates are within a range of $48 – $58.

Flutter Entertainment (FLUT): The Global Giant

Flutter represents an entirely different type of investment thesis than DraftKings. Whereas DraftKings is U.S.-centric story, Flutter is a global iGaming conglomerate, and as such the market has treated it as one since its primary listing moved to the New York Stock Exchange (NYSE) in the first quarter of 2024.

In addition to FanDuel (the #1 U.S. sports betting application by market share), Flutter owns PokerStars, Paddy Power, Betfair, Sky Betting & Gaming and Sportsbet in Australia. In this manner, Flutter generates revenue through various channels that are not available to either DraftKings or Penn National.

Below are some of the important items related to the first quarter of 2026 for FLUT:

• Global Revenue: Approaching $4 billion per quarter
• US Segment: Revenues at FanDuel are increasing ~22 percent year over year and improving margins
• International Markets: Primarily the UK and Australia are generating consistent, profitable cash flow
• Market Share in Online Sports Betting Handle in U.S.: Approximately 45% by FanDuel

The move to list on the NYSE was a strategic coup de grâce. This created potential index inclusion opportunities for Flutter, while providing significantly increased liquidity for U.S. institutional investors. As a result, Flutter is now included in mid-to-large-cap indices which should create structural buy-side pressure.

It’s the fact that Flutter’s international profitability subsidizes FanDuel’s U.S. growth that separates it from pure play U.S. operators. Although FanDuel continues to invest in acquiring customers for its platform, the combined company is highly profitable. Therefore, investors have access to the growth of the U.S. iGaming market without having to bear all of the risks associated with being a single-market operator.

Consensus among analysts: Strong Buy rating on most of the analyst coverage. Analysts’ price targets vary from $260 to $310. The major risk facing Flutter is regulatory. Any changes to the U.K.’s Gambling Act or restrictions on wagering placed by Australia will directly affect Flutter’s international businesses.

Penn Entertainment (PENN): The ESPN Bet Reckoning

The story of Penn in 2026 is a reinvention story – and if the public thinks so. When Penn spent about $1.5 billion to obtain the right to rename its Barstool Sportsbook “ESPN Bet” in late 2023, it took what many would call one of the biggest risks in iGaming history. The $1.5 billion was for a 10 year license agreement and equity; the idea was to create enough brand power to speed up Penn’s digital transformation.

So how has this worked out? While there is certainly high recognition of ESPN Bet as a name and brand (awareness), turning that awareness into actual bettors has been tougher than Penn had hoped. ESPN Bet has less than 10% of the online sports betting market; and significantly behind FanDuel and DraftKings.

Penn’s stock price reflects these uncertainties. In June 2026 at about $17 per share it is miles away from the over $40 shares were selling for during the heyday of Barstool and over $130 in March of 2020 (the pandemic). Penn also has significant amounts of debt, and its brick and mortar casinos are in a space that will likely see negative trends going forward due to increasing adoption of online gaming.

What can turn things around?

• Turn the growth of ESPN Bet into a meaningful increase in handle, especially through NFL season;
• iGaming progress – Penn has developed iGaming offerings, but they do not yet reach a meaningful level of penetration;
• Big player interest – bigger players may view Penn as a potential acquisition candidate based upon Penn’s strong national footprint of physical casinos plus its growing digital portfolio;
• State by state expansion – Pennsylvania, Ohio, Missouri and Illinois are all still waiting to allow iGaming.

Penn is not a consistent compounder. This is a turnaround trade. Those who invest in PENN are betting that ESPN Bet either gains traction or becomes an attractive merger/acquisition candidate.

Consensus among analysts is mixed, roughly 50/50 on Hold vs. Buy. Analysts’ price targets vary from $15 to $26; those estimates are largely dependent upon how quickly/strongly ESPN Bet grows.

Key Themes Driving iGaming Stocks in 2026

Several large-scale influences exist outside of how well these companies individually perform. These include:

iGaming Legalization Pipeline – Only a handful of U.S. states currently allow online casinos. Analysts are primarily focusing on the opportunities associated with legalized iGaming in New York, Illinois, and Texas. Legalized iGaming in New York alone would increase revenue from nearly every major operator by hundreds of millions of dollars.

AI and Personalization – All three companies are investing into their respective AI-driven Recommendation Engines (Hold Percentage), Responsible Gaming Tools (Churn) and Dynamic Odds Pricing (Margins). Companies who can improve Hold Percentage through AI/Personalization while keeping Churn low will be the winners long-term.

Expectations of Profitability – The time of “Grow At All Costs” has clearly come to an end. Investors expect a clear plan to achieve GAAP Profitability and are also scrutinizing promotional spend.

Risk Associated with Regulatory Actions – An increased tax rate on sports betting handle has been approved in Illinois. It is likely other jurisdictions will seek additional revenue streams and pass similar legislation. Increasing taxes will reduce industry wide margins.

Mergers & Acquisitions Appetite – Given Penn’s depressed stock price and as many small operators such as Rush Street Interactive remain independent, it is likely there will be continued M&A activity during the second half of 2026.

DKNG vs. FLUT vs. PENN: Which Is Right for Your Portfolio?

Factor	DKNG	FLUT	PENN
Risk level	Medium	Medium-Low	High
Growth profile	High	Medium-High	Speculative
Profitability	Approaching breakeven	Already profitable	Loss-making (digital)
Geographic exposure	US only	Global	US only
Catalyst dependency	iGaming legalization	Index inclusion, UK regulation	ESPN Bet turnaround
Suitable for	Growth investors	Core/balanced exposure	Speculative / turnaround

Final Thoughts

In 2026, the iGaming industry is beyond its adolescence. Only through building real customer loyalty and improving unit economics can the companies in this industry continue to grow. Companies such as Flutter (Flutter), DraftKings (DKNG) and Penn National Gaming (PENN) have both the opportunity and the challenges of navigating the emerging landscape with respect to an evolving patchwork regulatory environment. All three of these companies are among the best opportunities for investors in the consumer discretionary space. However, they also represent some of the most volatile. As previously stated, the legislative calendar for 2026 will be one of the largest drivers of volatility in the stock prices of Flutter, DraftKings and Penn National Gaming.