Core Insights - DraftKings is in negotiations to acquire Railbird, a regulated prediction market platform based in New York [1] - Railbird was founded in 2021 by former Point72 analyst Myers Safran and Edward Tian, and received approval from the CFTC in June 2025 to operate as a designated contract market [1] - Railbird's platform allows users to trade event contracts, enabling betting on real-world event outcomes across various sectors, including economic indicators, public policy decisions, weather patterns, entertainment trends, and sports results [1] Company Developments - DraftKings has previously applied for federal approval to operate a prediction market but withdrew the application months later [1] - In the sports betting sector, Flutter Entertainment's FanDuel has reportedly engaged in discussions with Kalshi, a well-known regulated exchange focused on trading future event outcomes [1] Investment Landscape - Railbird's investors include the CEO of SeatGeek and several venture capital firms, indicating strong backing and interest in the prediction market space [1] - The platform aims to cover all 50 states in the U.S., highlighting its ambition to expand its reach and user base [1]

You bought more DraftKings. DraftKings is up 14% in a month. It's great when you can have these midcap, small cap names ride the coattails, but I mean your true investment are in the large cap.It's fun to get into some of these smaller names. We bought DraftKings. To your point, it's up 14%.I like the momentum, but this is like a dualopoly. They have 80% of the market share in combined with um the other name DraftKing and FanDuel. Thank you.Yeah, FanDuel. So 80%. And you've only got 25 states so far for Dra ...

Core Insights - DraftKings Inc. is shifting from a high-growth model to a disciplined, cash-generating business, with 2025 expected to be a pivotal year for the company [1] - The company has reaffirmed its free cash flow target of $750 million, indicating improvements in core business fundamentals such as margin expansion and promotional efficiency [1][5] - Despite short-term volatility from sports outcomes, DraftKings is leveraging strong operational capabilities to pursue long-term cash generation [1] Financial Performance - In Q1 2025, DraftKings reported $103 million in adjusted EBITDA, a significant increase from $22.4 million in the same period last year, despite a $170 million revenue hit from unfavorable sports outcomes [2] - Management anticipates a substantial increase in EBITDA for Q2, projecting it to exceed $200 million, driven by sportsbook handle [2] - The structural sportsbook hold is expected to rise from 10.4% in Q1, contributing to improved net revenue margins in the range of 7-7.5% [3] Margin and Revenue Expectations - DraftKings expects to generate an additional $50 million in revenues and $37 million in EBITDA in 2025 through optimized promotional spending and improved margins [3] - The company forecasts an adjusted gross margin of 46% in 2025, reflecting an increase of over 300 basis points year-over-year [3] Regulatory Environment - The operating environment remains challenging due to regulatory issues, including Maryland's tax hike on sports betting and Jackpocket's exit from digital lottery operations, which together are expected to impact revenues by $30 million and EBITDA by $26 million [4] Capital Discipline - DraftKings is maintaining strong capital discipline, with an expected $100 million gap between adjusted EBITDA and free cash flow, supported by low capital expenditures and controlled working capital [5] - The company has $1.1 billion in cash on its balance sheet, positioning it well to meet its 2025 free cash flow target [5] Stock Performance and Valuation - DraftKings shares have increased by 24% over the past three months, compared to the industry's growth of 40.5% [6] - The stock is currently trading at a forward 12-month price-to-sales multiple of 5.31X, significantly higher than the industry average of 3.66X [7] Earnings Estimates - The Zacks Consensus Estimate for DraftKings' 2025 earnings per share has been revised upward from $1.40 to $1.46, indicating strong analyst confidence in the stock's near-term prospects [8] - Projections suggest a 239.1% rise in earnings for DraftKings in 2025, while competitors like Accel Entertainment and Boyd Gaming are expected to see declines [10]

Group 1 - Building Benjamins is a free stock picking and market commentary investment newsletter published by Tradition Investment Management, LLC [1] - Benjamin Halliburton, the founder, has a notable background in investment, having founded Tradition Capital Management in 2000 and received multiple accolades for his performance [1] - Halliburton has extensive experience in the investment field, starting his career at Merrill Lynch in 1986 and earning an MBA with a focus on finance from Duke's Fuqua School of Business in 1990 [1] Group 2 - Halliburton was recognized as the top-performing portfolio manager at Brundage, Story and Rose, where his "Disciplined Growth Strategy" outperformed the S&P 500 during the 1990s bull market [1] - He was the youngest partner at his firm and received high praise from senior managing partners for his investment acumen [1]

Core Insights - DraftKings has launched a new Responsible Gaming tool called My Budget Builder, aimed at helping players manage their entertainment budgets across various platforms [1][2] - The tool allows players to set customized limits and reminders for their gaming activities, reflecting DraftKings' commitment to promoting responsible gaming [2][3] Group 1: My Budget Builder Features - My Budget Builder is designed to be intuitive, proactive, and personalized, enabling players to create a gaming budget based on deposit amounts, total wagers, maximum wager size, loss limits, time spent, contest entries, and contest fees [2] - Players can set limits or reminders for a specified duration (e.g., day, week, or month), and while limits can be decreased at any time, they cannot be increased until the selected time period expires [2] Group 2: Commitment to Responsible Gaming - The introduction of My Budget Builder enhances DraftKings' existing Responsible Gaming initiatives, which focus on accessibility, education, and innovation [3] - This new tool complements the previously launched My Stat Sheet, which has recorded over 20 million visits and provides players with insights into their gaming activity [3] Group 3: Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company that operates in various sectors, including daily fantasy sports and regulated gaming [5] - The company is headquartered in Boston and is the only U.S.-based vertically integrated sports betting operator, with operations in 28 states and Ontario, Canada [5]

Company Performance - DraftKings (DKNG) closed at $42.24, reflecting a -1.17% change from the previous day, underperforming the S&P 500 which gained 0.8% [1] - The stock has increased by 22.05% over the past month, outperforming the Consumer Discretionary sector's gain of 4.49% and the S&P 500's gain of 5.12% [1] Earnings Forecast - DraftKings is expected to report an EPS of $0.4, representing a 233.33% increase from the same quarter last year [2] - The projected revenue for the upcoming earnings report is $1.38 billion, up 25.37% from the previous year [2] Annual Estimates - For the entire year, the forecasted earnings are $1.36 per share and revenue is expected to be $6.27 billion, indicating increases of +229.52% and +31.46% respectively compared to the previous year [3] Analyst Sentiment - Recent changes to analyst estimates for DraftKings are important as they reflect short-term business trends, with positive revisions indicating analyst optimism [3] - The Zacks Consensus EPS estimate has decreased by 6.67% over the past month, and DraftKings currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - DraftKings has a Forward P/E ratio of 31.54, which is higher than the industry average of 19.85, suggesting it is trading at a premium [6] - The company has a PEG ratio of 0.6, compared to the Gaming industry's average PEG ratio of 1.6, indicating a favorable growth expectation relative to its valuation [7] Industry Context - The Gaming industry is part of the Consumer Discretionary sector and currently holds a Zacks Industry Rank of 96, placing it in the top 40% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Regulatory Changes & Impact - Illinois legislature imposed a $050 per wager tax increase, described as "illconceived" [1][2] - The tax increase is set to take effect on September 1st [1] - The company was not warned about the tax increase, which was decided unexpectedly [2][3] Business Strategy & Consumer Behavior - The company intends to pass the $050 tax on to consumers [2] - The company anticipates the tax will drive consumers to illegal markets or encourage them to bet more [2] - The company hopes for public reaction that will lead to reconsideration of the tax [3] Financial Implications - The $050 per wager tax makes it unprofitable for the company to accept small bets (e g, $1, $050, $5, or $10) [2] - The company is implementing the tax pass-through to continue offering its product in Illinois [3]

Illinois Tax Increase Impact - Illinois legislature raised taxes on sports wagers, introducing a $0.50 transaction fee per bet, effective September 1st [1][2] - DraftKings believes the tax is ill-conceived, as it taxes gross receipts rather than profit, making it difficult to offer bets profitably, especially on smaller amounts [3][9] - The company expects the tax will drive consumers to the illegal market or to bet larger amounts to offset the tax burden [3][7] - DraftKings had no prior warning about the tax increase, despite recent meetings with legislative leaders [4] - The company is passing the tax on to consumers to continue offering the product in Illinois, hoping for reconsideration from lawmakers [3][5] Industry & Market Dynamics - The industry believes education is needed for policymakers to understand that the tax impacts revenue and investment in product development [8][9] - DraftKings acknowledges that states are facing budget crises and are looking at sports betting and iGaming legalization for revenue [10] - The company operates in approximately 27-28 states and anticipates both opportunities and challenges across different regions [13] - DraftKings reports healthy customer behavior and strong growth rates, with customer-level metrics (bet frequency, average bet size, sports engagement) meeting or exceeding expectations [14][15] - Overall business is strong, with no signs of a slowdown, and customer retention and satisfaction are high [14][15][16]

Summary of Key Points from Conference Call Records Company: Adobe (ADBE) Financial Performance - **Net-new Digital Media ARR**: $460 million, roughly in line with expectations [3] - **Revenue**: $5.87 billion, up 11% year-over-year, exceeding market expectations of $5.80 billion (9% year-over-year) [3] - **Non-GAAP EPS**: $5.06, up 13% year-over-year, compared to Street's expectation of $4.98 (11% year-over-year) [3] - **Digital Media Revenue**: $4.35 billion, 12% year-over-year growth, surpassing Street's expectation of $4.29 billion [3] - **Digital Experience Revenue**: $1.46 billion, 10% year-over-year growth, slightly above Street's expectation of $1.44 billion [3] - **Non-GAAP Operating Margin**: 45.5%, compared to Street's expectation of 45.1% [3] Guidance - **F3Q Revenue Guidance**: $5.875 billion to $5.925 billion (mid-point 9.5% year-over-year) vs. Street's expectation of $5.88 billion [4] - **Full-Year Revenue Guidance**: Raised to $23.50 billion to $23.60 billion, slightly above consensus [4] Market Sentiment - **Bullish Perspective**: Advocates argue that Adobe's AI initiatives are beginning to generate real revenue, with Firefly and Express enterprise traction indicating potential for pricing leverage. The stock trades at a ~40% discount to large-cap software peers, with management confident in double-digit revenue growth and mid-40s margins [5] - **Bearish Perspective**: Critics point out that core growth is slowing, with net-new ARR down 6% year-over-year. Concerns include AI monetization challenges, rising operational expenses, and competition from Canva and Meta. The FY-25 guidance is seen as merely FX-aided rather than indicative of demand improvement [6] Company: Apple (AAPL) Market Performance - **iPhone and iPad Demand**: Morgan Stanley anticipates a surge in June revenue by up to $4 billion due to strong sales in China, driven by promotions and subsidies [8][9] - **Production in China**: iPhone builds are expected to rise by 19% year-over-year, while iPad builds are projected to increase by 38% year-over-year [8][9] - **Global Sales Growth**: iPhone sales in China reached the top spot in May, with global sales growing 15% year-over-year during April and May [10][11] Strategic Developments - **Siri AI Upgrade**: Apple plans to release a delayed upgrade for Siri in Spring 2026, which will enhance its capabilities by utilizing consumer data [12][13] Company: Tesla (TSLA) Market Outlook - **Guggenheim's Position**: The firm reiterated a Sell rating, citing deteriorating fundamentals despite short-term enthusiasm around robotaxi narratives. Q2 delivery trends are soft, with a forecast of only 360,000 deliveries, significantly below the consensus of 415,000 [20] - **Model S and X Updates**: Tesla has upgraded its Model S and X vehicles in the U.S., raising prices by $5,000 [21] Company: Zscaler (ZS) Analyst Upgrade - **Wells Fargo Upgrade**: The firm upgraded ZS to Overweight, raising the price target to $385, citing accelerating growth and margin expansion potential. Zscaler is on track to reach $5 billion in ARR by FY27 [16] Company: Oracle (ORCL) Analyst Upgrade - **BMO Upgrade**: BMO Capital upgraded Oracle to Outperform, raising the price target to $235, driven by strong results and confidence in FY26 growth [17] Company: DocuSign (DOCU) Analyst Upgrade - **Wells Fargo Upgrade**: The firm upgraded DOCU to Equal Weight, raising the price target to $80, citing a more reasonable valuation following underwhelming Q1 results [18] Industry Insights - **Chinese Robotics Leadership**: Morgan Stanley highlights China's rapid advancement in robotics, driven by structural advantages and long-term strategies, including dominance in rare earths and government support [36][37] Other Notable Developments - **Walmart and Amazon**: Both companies are exploring the issuance of their own stablecoins, potentially disrupting traditional financial systems [27][28][29]

Core Viewpoint - DraftKings Inc. will implement a 50-cent transaction fee on all mobile and online bets placed in Illinois starting September 1, 2025, in response to recent tax increases on sports wagering by the Illinois state legislature [1][2]. Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company founded in 2012, headquartered in Boston, and operates as the only U.S.-based vertically integrated sports betting operator [3]. - The company offers a range of products including daily fantasy sports, regulated gaming, and digital media, and is operational in 28 states, Washington, D.C., and Ontario, Canada [3]. - DraftKings is committed to responsible gaming and has partnerships with major sports leagues such as the NFL, NHL, PGA TOUR, WNBA, UFC, NBA, and MLB [3]. Industry Context - The Illinois state legislature has more than tripled the tax rate on sports wagering over the past two years, raising concerns about the impact on the legal, regulated industry and potentially fueling the illegal gaming market [2]. - DraftKings emphasizes the importance of collaborative policymaking to ensure the long-term sustainability of the sports betting industry in Illinois [2].