Jefferies hosted DraftKings (DKNG)’ CFO for investor meetings to discuss New Jersey’s proposed tax hike, in-play betting trends, Jackpocket and its role within the tech stack, iGaming opportunities and DraftKings’ cash conversion trends and usage of free cash flow, telling investors that the firm came away “confident in our stance” after the event. While New Jersey Governor Phil Murphy’s proposed 25% tax rate on online sports betting and iGaming is “a near term setback,” the firm’s impression is that DraftKings expects a negotiation before the ultimate rate is changed, the analyst tells investors. The firm, which argues that expansion opportunities in the U.S. outweigh tax threats, keeps a Buy rating and $63 price target on DraftKings shares.
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